Techniques for the analysis of risks in major projects

Risk management currently has an important bearing on the outcomes of major projects. It usually consists of three core areas: analysis, evaluation and control. One of the vital decisions to be made within the area of risk analysis is the choice of techniques to be used, which are broadly classified under qualitative and quantitative methods. Through a questionnaire, this paper identifies the most successful risk analysis techniques within both categories. Over one hundred large companies within the construction industry, and every oil and gas operator in the UK were approached. The areas surveyed on were: risk analysis techniques employed by the companies; the relative success of the techniques; the size and range of activities of the company and the company's policy on identifying and responding to specific risks encountered during any particular project. The main conclusions are that personal and corporate experience, and engineering judgement are the most successful qualitative techniques; scenario analysis, EMV, ENPV, and break-even analysis being the principal quantitative techniques.