Cost and Risk Management Flashcards
(25 cards)
What does cost management involve?
Cost management involves planning, estimating, budgeting, financing, funding and controlling costs to complete the project within the approved budget.
Why are early accurate cost predictions challenging but important?
Early accurate cost predictions are challenging due to limited information but important for determining the economic viability of the project.
How do cost planning techniques progress as the design develops?
Cost planning starts with cost per unit benchmarks, then progresses to detailed elemental cost plans and bills of quantities as the design develops.
What other key considerations are there in cost management?
Other key considerations include life-cycle costing, value engineering, and value management.
How can cost be used to measure project progress?
Cost can be used to measure project progress through tools like S-curves and costed bar charts.
What should detailed cost appraisals include?
Detailed cost appraisals should include land costs, fees, site investigations, building and infrastructure costs, marketing, planning, insurance, funding costs, operational costs, etc.
What is risk in the context of project management?
Risk is the uncertainty of outcomes, which can be positive or negative. Risk management includes identifying, assessing and responding to risks.
Why do construction projects face many risks?
Construction projects face many risks due to their unique, complex, outdoor nature.
What are some common risks in construction projects?
Common risks relate to ground conditions, permissions, interdependencies, safety, quality, resources and weather.
What are the steps in the risk management procedure?
The risk management procedure involves: 1. Identify and classify risks, 2. Analyse likelihood and impact, 3. Respond using the 4 Ts (Tolerate, Treat, Transfer, Terminate), 4. Monitor risks and appoint a risk owner.
How can non-financial risks be assessed?
Non-financial risks can be assessed using a probability-impact matrix.
What is a risk register used for?
A risk register is used to track and update risks throughout the project lifecycle.
Who are project stakeholders?
Project stakeholders are actors who incur a direct benefit or loss from the project.
What is the difference between internal and external stakeholders?
Internal stakeholders have a legal contract with the client, while external stakeholders have a direct interest without a contract.
What are some examples of internal stakeholders?
Examples of internal stakeholders include the project owner, project professionals, suppliers, and customers.
What are some examples of external stakeholders?
Examples of external stakeholders include public parties like authorities and the public, and private parties like interest groups, media, trade and industry.
How do client types vary and what are their characteristics?
Client types vary, e.g. public vs private, experienced vs inexperienced, with different characteristics that affect the project.
How should stakeholders be mapped and prioritised?
Stakeholders should be mapped and prioritised based on their power, legitimacy, urgency, and potential to cooperate or threaten the project.
How can stakeholder relationships be managed?
Stakeholder relationships can be managed through effective formal and informal communication.
What should you be aware of in terms of potential conflicts and emotional responses?
Be aware of potential conflicts and emotional responses to change, and have strategies to resolve issues.
What are the key risks and benefits of stakeholder management?
Key risks of poor stakeholder management include uncertainty, reactive planning, behavioural issues. Benefits include trust, pace, risk management, awareness, innovation.
How does project governance relate to organisational governance?
Project governance aligns with organisational governance and covers the full project lifecycle.
What does project governance set out?
Project governance sets out responsibilities, enables stakeholders to manage interests, supports the project team, enables decisions, provides expertise and information.
What are the key elements of project governance?
Key elements of project governance include project ownership, sponsorship, guidance, change management, risk management, quality management, contracting approach.
