RAMP Risk Analysis and Management for Projects – Third Edition

Contents
Introduction
Who is this guide aimed at? 10
What is RAMP? 10
Benefits of RAMP 10
This new edition 11
Users of RAMP 12
Common, good and future recommended practice 12
Why actuaries and civil engineers? 12
Using RAMP to make success more likely 13
Chapter 1: Overview
Summarises the basic ideas behind the RAMP method
1.1 First principles 15
1.2 The nature of projects 17
1.3 Recommended good practice 19
1.4 What makes a project successful? 22
1.5 Differing approaches to risk by various
stakeholders 24
1.6 RAMP: studying risks throughout the
project’s expected life 25
1.7 RAMP’s stages 26
1.8 The investment model 29
1.9 Balancing risk and reward 31
1.10 Special features of RAMP 32
1.11 RAMP as part of enterprise risk management 33
Chapter 2: Getting started
Outlines how to build the foundations for applying
RAMP to a project
2.1 Defining the risk strategy 35
2.2 Establishing the baseline 37
2.3 The first risk review 39
Chapter 3: The management of uncertainty
Discusses the nature of uncertainty and how to
manage it
3.1 The nature of uncertainty 42
3.2 Reducing uncertainty 44
3.3 Ways of acquiring more knowledge 46
3.4 Making assumptions 48
3.5 Other techniques for dealing with uncertainty 48
3.6 Making decisions when uncertainty remains 50
3.7 Managing the residual uncertainty 50
3.8 Uncertainty posed by hostile interests 52
3.9 Uncertainty surrounding catastrophe risks 52
3.10 A systems approach to uncertainty 53
3.11 Moving forward once uncertainty has
been reduced 54
Chapter 4: Responding to risks
Describes how to devise and analyse possible ways of
responding to risks
4.1 Identifying and analysing risks 55
4.2 Responding to risks 55
4.3 Developing risk responses 56
4.4 Determining whether risk responses
are cost effective 56
4.5 Cost effectiveness of risk responses when
resources are scarce 58
4.6 Ways of mitigating threats 58
4.7 Reducing or eliminating threats 59
4.8 Transferring risks 59
4.9 Avoiding risks 62
4.10 Absorbing and pooling risks 63
4.11 Optimising opportunities 63
4.12 Responding to uncertainty 64
4.13 Planning for risks of the operating phase 64
4.14 Developing a risk response plan 66
4.15 Scenario analysis 67
4.16 Dealing with residual risks 71
Chapter 5: Social and environmental risks in
infrastructure projects
Discusses the management of the complex social and
environmental risks found in infrastructure projects
5.1 The overall objectives 72
5.2 Examples of social and environmental risks 72
5.3 Basis for guidance 75
5.4 Sustainability 75
5.5 Working with stakeholders 79
5.6 Responding to social and environmental risks 83
5.7 Influencing decisions 84
5.8 Quantitative appraisal methods 86
5.9 Recommended multi-criteria approach 89
5.10 Good practices: a summary 90
Chapter 6: The investment decision and
afterwards
Deals with investment decisions and subsequent risk
management
6.1 The investment submission 92
6.2 Need for confidence in the investment
submission 93
6.3 Wider considerations 94
6.4 Rejected projects 95
6.5 Decisions about the risk response package 96
6.6 Real options 96
6.7 Shareholder value 96
6.8 Implementation risks 96
6.9 Importance of communication 99
6.10 Procurement risks 100
Appendix 1: A practical step-by-step guide
to applying the RAMP process
Part 1. Benefiting from RAMP 102
Part 2. Preparing for the RAMP process 105
Part 3. Studying uncertainties 107
Part 4. Making sure data are accurate 109
Part 5. Studying key scenarios 110
Part 6. Looking at the cost effectiveness of risk
mitigation 112
Part 7. Making a decision based on different
possible outcomes 116
Part 8. Programme/project appraisal template 118
Part 9. Ensuring adequate follow-through to
implementation 122
Appendix 2: Case study
A simple RAMP appraisal process 123
Appendix 3: Case study
Applying RAMP to a large project 128
Appendix 4: Constructing and
analysis the risk register 133
Appendix 5: Examples of handling
social and environmental risks 138
Appendix 6: Description of the
RAMP process 141
Appendix 7: Glossary 151
Appendix 8: References and select
bibliography 158
Appendix 9: Self-assessment check 160
Index 161