Risk contingency management for pharmaceutical company

Challenge
One of the World’s leading pharmaceutical companies required risk management support for a major £50m new build project. The project was implemented using a new contract strategy to replace the more traditional client/contractor arrangements with an Alliance Partnership approach with appropriate risk/reward provisions.

ESR Technology was contracted to develop the risk contingency budget for the project which was to be managed equally by all the Alliance Partners – including the client. Any unused risk provision at the end of the project being available to all Partners as gainshare.

Solution
The approach involved close collaboration with the project team during an intensive tender review period. During this time, ESR Technology facilitated risk sessions with the project team and at each individual Partner Estimate Review Meeting to identify and quantify all project risks.

The risks were input into a three-point estimate model to derive the overall risk allowance for each Partner estimate. ESR Technology delivered an integrated Alliance Partner Risk Model and overall Project Risk Register for on going risk management on the project.

Benefits
  • An independent, fresh perspective on the project
  • Active involvement of the project team and all Alliance Partners in the development of the risk budget
  • Development of a simple transparent, risk model which could be easily understood by all participants
  • A risk model that could be easily used for other similar projects with confidence since it was validated using more sophisticated Monte-Carlo simulation

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