What is Risk Management ?

By Steven Macdessi

Do you run your own business whether small or large? If yes then I am sure that you will be well aware of different risks associated with business. Running a business or even a project is not an easy job as you have to fight against thousands of risks related with your internal or external environment. Almost every single organizations works hard for ensuring its long term existence but at the end only those organizations actually survive who adopts risk management techniques. Do you know what risk management is and how you can apply it on your organization in order to get maximum benefits? If no then I am here to help you in this regard.

What is Risk Management?

Risk management is any technique, strategy or action plan followed to avoid or overcome the risk. On the other hand, risk itself is any unwanted situation that can result in huge loss. It can be anything such as a mishap or accident at your workplace, fires, tornadoes, earthquakes or any other natural disaster. Apart from this, there are various legal risks, the most common examples of which include fraudulent acts, theft, or sexual harassment lawsuits. Financial risks are also of great concern for the business owners. The risk management depends on specific type of risk present in your company.

Risk management is done by the risk managers who have a basic or master degree in this subject. They know about all types of risks and their possible solutions. These managers not only make the list of all possible risks associated with your particular organization but also make an action plan for avoiding and removing these risks. They adopt the latest strategies for risk mitigation. Almost every single organization hires a personal for risk management.

How to Apply Risk Management Effectively?

It is generally said that an efficient risk avoidance and mitigation plan can reduce the chances of loss that may occur up to 80% or even more. A large number of institutes including Project Management Institute, the International Organization for Standardization (ISO), the National Institute of Science and Technology, and actuarial societies have developed various strategies and risk management standards that may help you to avoid risk fully or partially. Generally five different steps are followed in order to apply the risk management effectively. Following is an overview of all these five steps.

Risk Identification

It is the first and the most important step. In this step, the risk managers identify the specific risks associated with your business.

Risk Analysis and Prioritization

After identifying the risks, they are then analyzed carefully in order to know the extent of damage that may occur due to them. In this step, the risk managers also prioritize the risk. For instance, your organization is exposed to 5 different risks then they will be given numbering according to the extent of danger associated with all of them.

Risk Control and Loss Prevention

In this step, various strategies are developed for risk control and loss prevention. Different strategies are made to target different types of risks as a single strategy cannot be applied for controlling all the risks.

Risk financing, and Risk Implementation/Administration

In the last step, all the risk control strategies are practically implemented and results are then noted afterwards.

Some organizations follow all the above mentioned steps while other follows any 2 or 3 of them for ensuring applying the risk management effectively. The success of your risk management techniques basically depends on your skills and experience as well as your planning, organizing and controlling abilities.

Apr 2012

Maintenance and Evaluation | Your Role After the Deadline | Steven Macdessi

In project management, it is important to set performance standards and to compare the actual output with the standards that are set. If there are discrepancies, corrective measures are taken. Once the project is finished, however, it is crucial to note that there is still some work to be done. The next step involves maintenance and evaluation.

  • Maintenance - the task would be to ensure that the objective of the project is actually met. There are also instances when maintenance is required because the project is still prone to bugs and errors. This is especially true in projects related to software development and technology.
  • Evaluation - how did the project benefit the organisation? This is a question that has to be asked. For example, if the task is to set-up a new database, then a team member from the project should make the effort to determine if the system is being used to its potential. On the other hand, if the project involves construction work, then the construction project manager should analyse whether the project was effective.

At the end of the day, it remains clear: a project is not finished after the deadline. There are many other aspects related to the project that has to be fixed, maintained, or improved. It is the task of the project manager to ensure that the organisation will be able to utilise the potential of the work.

Sep 2011
POSTED IN Steven Macdessi

Scope Management


by Steven Macdessi



All the relevant information necessary to produce a satisfactory outcome (building/structure)

“SCOPE” is also often referred to as “THE EXTENT OF WORKS.”
If the works can’t be identified how can they be managed and therefore completed?


The Scope or extent of works can be either “expressed” or “implied”.

Expressed:    Specifically written (or drawn) details.

For example:
Invitations to tender (tender documents),
Tender /quotation submission,
Acceptance / agreement / contract,
Requests for information (RFI)
Provisional Sum/Prime Cost Advice Notes
Manufacturer’s Instructions/Manuals etc.
Client formal instructions

Acts of Parliament (State & Federal),
Law (Adjoining owners, Public Liability)
B.C.A. (Fire Safety, Health and Amenity).
Council Requirements;
Development Approval.
Building Consent (Construction Certificate)
Australian Standards
OH&R Regulations

It is difficult at times to identify accurately all of the work necessary. Therefore managing scope can be often complicated. “Scope Management” involves the effective managing of the initial project information as well as any changes to the design &/or contract which occur during the progress of the works. It necessitates an understanding of planning how scope is to be identified then managed.

Scope management incorporates highlighting the extent of the works and relating that detail effectively to all those likely to effect the desired outcome. It requires the establishment of systems, processes and procedures that can identify changes to the scope and then be able to effectively relay those changes onto all of the parties who need to know and/or are affected by such changes. It involves ensuring everyone involved is acutely aware of the initial scope and any subsequent changes. Scope Management is essential to the attainment “quality”.

This is concerned with defining the project, its purpose and objectives, and identifying all the relevant work to be accomplished so that the project can be successful.

The major processes of scope management are:-
1.    Collect Requirements
2.    Define Scope
3.    Create WBS
4.    Scope Verification,
5.    Scope Change Control.

Collect requirements is the process of defining and documenting stakeholders’ (eg clients) needs to meet the project objectives.

The project’s success is directly influenced by the care taken in capturing and managing project and product requirements.

Depending on the stage of the project, project objectives can be included in concept drawings, DA drawings, benchmarks, etc.

This is the process of developing a written scope statement as the basis of future project decisions including, in particular, the criteria used to determine if the project or phase (stage) has been completed satisfactorily.
The importance of defining the scope is to:-
a)    Define the boundary of the works and confirm common understanding among stakeholders,
b)    Form the basis of agreement between the client and the contractor by identifying both the project objectives and the major deliverables,
c)    Be a guide and constraint for the configuration management process influencing change control.

A written “Scope Statement” is used to briefly identify the wprks to be carried out. It is a concise, yet complete, description of the works.

The “Scope Statement” should include reference to:
type of construction (form of structure),
size (area, levels, length, rooms)
location (if applicable),
particular materials,
specialized building systems,
standard of finishes,
unique characteristics.

An experienced construction professional should be almost able to draw the project in his head from the statement provided. A commonly used scope statement between the Client and the Builder is the “Principal’s Project Requirements” (PPR) which forms part of the building contract.

Create WBS is the process of outlining how the project will be built, by subdividing the major project deliverables and project work into smaller, more manageable components.

WBS will identify each trade that is required for the project and the works they are required to carry out.

The process of formalizing acceptance of the project scope by the client and stakeholders.

The scope of work should be formally verified at the end of each phase of a project.
From a builder’s point of view it should definitely be verified at the time of tendering, at the time of endorsing the contract, when works commence and of course during the construction stage where variations may have occurred.

Scope can be verified by way of inspections such as measuring, examining and certification to determine whether the work meets the requirements defined in the scope.

All projects are subjected to changes during their life cycle. “Scope Change Control” is the process of identifying and managing change to the building works during the project’s duration.

Scope Change Control involves:-
a)    Influencing the factors, which create scope changes, to ensure that changes are ultimately beneficial to the project,
b)    Determining that a scope change has occurred,
c)    Managing the actual changes when and if they occur

Variations (changes to the scope)
Changes or “Variations” are a generally accepted occurrence in the construction industry and most standard forms of building agreement cater for changes to the scope. Such changes however need to be managed in accordance with that contract.

One essential feature of a Scope Management System is the early recognition that the scope of the works will invariably change during the duration of any contract and it is the function of the Scope Management System to identify, record, initiate and monitor the variations to the initial scope.


PMI (2008), A Guide to the Project Management Body of Knowledge (PMBOK Guide), 4th Ed, Project Management Institute, Newtown Square, PA.

Jun 2011

Implications of IT Project Management by Steven Macdessi

Cost has always been a leading driver in any project undertaking. Information technology (IT) can aid in reducing costs in the long run but imply that investments have to be made in the short run. In effect, information technology aids a business particularly in the following fields:

  • Aligning technology with business
  • Financial management
  • Portfolio management
  • Performance management

For some, the benefits may not be too clear. Return on investment as far as capital spent on I.T. cannot be easily translated into actualised profits. It can, however, be used to smoothen the flow of operations especially in the above mentioned fields. IT is usually bent on creating a “paperless” office. The more accurate way of looking at the benefits of IT is by determining the increase in productivity and profitability of the enhanced operations.

This is closely related to the first step of project management which is cost estimation. Identifying an object as a need or as a benefit are two different things. The immediate need might as well be the important factor for consideration in this process.

Challenges for management today in incorporating IT into business usually involve adaptation. The idea of putting up new technology is usually referred to as a big managerial decision with less emphasis on how the people across different levels may see it. Having little knowledge on optimising technology may break the companies trying to make use of it and have it as an expense rather than an asset.

Once the needed assets are well identified, the second process – budget determination – authorises purchasers to act on a cost baseline. What is needed is already well segregated from optional items in this process, but may still include a cost contingency for possible changes in market prices or failure in certain operations.

Another challenge for companies nowadays is the ever growing need for responsiveness. Technology and product competencies are slowly becoming less influential as more way is paved for response management. Using IT as a means to cope with the dynamic markets and business structure redesigning may be in order.

Lastly, cost control acts as a means of updating based on the cost baseline to manage any changes that have been or should be made in the future. Performance management plays a key role in is the key when it comes to aligning the expected output to the budget at hand. A good project manager can help maximise your resources.

By Steven Macdessi

About the Author:

Steven Macdessi has successfully completed the Practitioner’s Certificate in Mediation as conducted by the Institute of Arbitrators and Mediators Australia.

The Practitioner’s Certificate in Mediation is presented by nationally accredited instructors and is conducted Australia-wide. The course offers a practice-oriented qualification in mediation and participants who successfully complete the assessment module may apply for accreditation under the National Mediator Accreditation Scheme through IAMA.

Aug 2010
POSTED IN Steven Macdessi

The Variety of Project Management Methodologies

By Steven Macdessi

The entire process of project management includes different steps, principles and strategies by which must be taken into consideration even the smallest detail that is integrated. Projects may vary from scope, objectives, goals and procedures to another project. The use of project management methodologies then may also be different from one project to another.

You can make use of the different project management methodologies which best suits your project. For your project management methodologies to be effective, you should know first what they are exactly. The following are the different project management methodologies that you can use with some of their details.

1. Traditional Project Management Methodologies.

This type of project management approach includes sequence of steps that need to be completed. These steps are the initiation stage, planning or design stage, execution or production stage, monitoring or controlling system and project completion stage. These procedures may differ or the steps may not be the way as it follows because of certain reasons. Some may repeat one step for several times depending on how the project will be able to make use of this project management methodology.

2. Critical Chain Project Management.

The resources are what this project management methodology put emphasis to. This method plans and manages the project with the goal to increase the rate of throughput of projects. This project management methodology uses the Theory of Constraints wherein the system constraints are the resources. Before the critical chain will start the resources must be ready so as to achieve the best possible outcome.

3. Extreme Project Management Methodology.

If your project seems to be very complex and uncertain then this project management methodology is the best that you can use. The human side of the project is the main focus of extreme project management methodology or others may call the XPM (Extreme Project Management). Utilising this will allow you to find ways on how to deal with the complexities of human collaboration so as to bring success to your project.

4. Event Chain Methodology.

Dealing with uncertainties of the project can greatly affect the outcome so when you doubt your abilities to overcome such then this project management methodology can be the best. Event chain methodology focuses on identifying and managing events which can affect the project schedules.

5. Process-based Management.

The process-bases project management methodology is oriented towards attaining a vision to guide the organisation rather than any activity or task. The vision may deal with the strategy and the structure, budgets, incentives or costs of the project. As the name implies the process will be the basis of the decisions to be made as the project is existing.

These are some of the project management methodologies that you can used to achieve better outcome of your project. Your choice may depend on what the situation or project may call. The type of project management methodologies may vary from one project to person and to business. Make sure that you choose the best project management methodology for you to be able to gain success.

Aug 2010

How to Choose a Good Project Manager?

By Steven Macdessi

Searching for a good manager is a very crucial task because the success of any project will depend greatly on his managerial abilities. There are several points that you should consider in choosing a good project manager. As complex as it may seems finding a good project manager can be easy if you know what to look for.

Knowing the qualities of a good project manager in detail is better because it can guarantee you to make the right choice. Being discussed in the following are some of the most important characteristics that makes a good project manager.

1. Communicating with ease.

A good project manager must be capable of communicating with the employees in a comfortable manner. Either written or oral, a good project manager must be able to give information with regards to the project. An organisation that can communicate effectively is more likely to have a smooth working process thus attaining the goal in less stressful manner.

2. Confidence in solving problems.

Project management is not easy as it deals with great problems that a project manager must be able to solve. A good project manager can show confidence no matter how difficult the problem maybe. Difficult situations are good and a good project manager is always ready to face them. Considering the overall picture of any problem is an added point for a good project manager.

3. Develops trust with his workers.

Teamwork is the heart of a successful project and a good project manager must know how to trust his workers. The project manager must not be afraid of delegating tasks to his workers but instead be confident with them. Proper delegation shows the ability of a good project manager in discerning the abilities of his workers.

4. Gives emphasis on organisational tasks.

For a project manager to be efficient, he must also posses the necessary organisational skills. Generating and keeping track of multiple documents must be well done for the project manager to be considered as a good one. Keeping a record of the project’s activities will help the project manager to determine the progress, errors and success of the project. A good project manager then is someone with good organisational skills.

5. Practices critical thinking and decision making.

One of the important qualities of a good project manager is the ability to make decisions in natural manner. A good project manager must be able to figure out the effects of his decisions to both project and the employee. Project management entails terrible decision making thus requires knowledge and experience.

There are still other characteristics that make a project manager good and sometimes these depend greatly on the project requirements. The above points can be useful for you in knowing how to choose a good project manager. You can also set your own criteria as you wish in finding the best project manager. Keep in mind that project manager play a vital role in the outcome of the project so if you want to yield towards success then it is necessary for you to find a good project manager.

Aug 2010
POSTED IN Steven Macdessi

How to Become a Construction Project Manager

In case you already have extensive experience in the construction industry and are planning to streamline your career, then you can opt to become a professional construction manager. However, you may have to attend school and earn a bachelor’s degree in accordance with the Australian Skills Classified Occupation. While there is a high demand for construction project managers, employers do prefer the ones with appropriate training and education, particularly in the fields of civil engineering, construction and management. Though experience is a huge advantage, new managers in the construction industry will find that it is tough to use experience as an alternative for a degree.

Huge firms are in need of project managers to coordinate and take charge of all aspects of large construction projects. As a construction project manager, it is your job to interpret architectural drawings, specifications and bills of quantities; manage employees, procurement and delivery of materials; consult with architects, engineers and other professional and technical workers; negotiate with property developers and subcontractors; make sure the project is progressing within the allotted budget; and ensure strict adherence to building codes and standards of building performance.

With all the aforementioned tasks, it is evident that you need to study building science, business and management techniques before you can actually venture into project management work. Having a formal training in conjunction with hands on experience in the job site will certainly come in handy to tackle all the responsibilities that go with the job. Having a professional training and earning a degree and/or certification is increasingly becoming more popular among construction project managers as it highlights the fact that  they are competent and they have all that is required to get the job done.

Public relations and people skills are of paramount importance as you will be the one on the front lines to represent your company and make sure the clients are satisfied with the deal that has been made with them on the project. This will ensure that clients will stick to your company and hire your services again. You must also be willing and able to travel as large construction companies normally have simultaneous projects all over the country.  It is your main responsibility to coordinate projects and there would be times when you will be required to make project visits or move for a certain period until the project reaches completion.

Get abreast with the latest advances in building technology. Construction companies are now usingconstruction management software to be able to efficiently organize and control the important aspects that go into the building process. This is made possible by the computerization of the key aspects such as plotting the schedule for the construction, document management, correspondence between workers, keeping financial records and so forth. You have to familiarize yourself with the software by taking a refresher course or taking an internship with a professional construction project manager.

Overall, being a project manager is not everyone’s cup of tea. It is a highly competitive job and if you fit into the mold, you may find yourself with the most rewarding job in the world. Imagine yourself driving by a structure that has become an icon and know that you played a big role in its construction. That’s certainly an amazing feeling and a source of peerless pride on your part.

Jul 2010
POSTED IN Steven Macdessi

Principles of a Good Project Manager

Just like other key positions within a large organization such as companies and corporations,project managers have their own principles that they strictly follow. Such principles vary depending on the individual approach and management style. The project manager typically employs his/her principles in carrying out the responsibilities that go with a certain undertaking. Those principles serve as guidelines in planning, staying with the methodology, controlling the project and managing a team effectively.

Before taking on a project with you at the helm, make sure that you will be given balanced responsibility and authority. You can’t take on many responsibilities without sufficient authority. In the same manner, you can’t have little responsibilities with too much mandate. Once assured that you’ll have balanced responsibility and authority, you can jumpstart the project and come up with a plan. This stage is the point when a project manager feels pressured to create a plan which meets the expectations of the proponents of the project such as the stakeholders. As the project manager, you should be able to devise a realistic schedule, one which you honestly believe is fair and can be achieved within a specified timeframe. Otherwise, you are merely subjecting yourself to additional pressure if you agree to push through with a project with a totally unrealistic schedule. It is also important that you are flexible enough to adapt to any possible changes. As the project manager, you must always update your plan in line with the latest changes and developments.

A great plan would be for naught if you don’t have an equally great team to back you up. If you are given a project to manage, you must have the prerogative to pick the best possible staff. You must be allowed to let go of less than average members of your team. Seasoned project managers are cognizant of the importance of having an excellent workforce in order to get the job done. Oftentimes having a good team can even compensate for lack of time or budget. As such, you should exert extra effort to foster a working environment where your team members have all the necessary tools and training at their disposal.

Another important principle to consider is the value of accurate and constant communication within the team. A project manager and team members should be fully knowledgeable about the expected outcome of a particular project and this is virtually impossible without having all communication lines open. Remember that good and transparent communication is indispensable in any group undertaking. Any signs of doubt or vagueness about the project objectives must be discarded through good communication. This greatly increases the chances of seeing the project reach its completion.

The project manager should also know how to inculcate a sense of urgency among the team members. Nowadays, managing a project is a venture against limited time and budget. Hence, you should know how to motivate and inspire team members to make concerted efforts to finish the project. You should have a personal plan or a system to constantly remind team members about deadlines, objectives and target results. Overall, a good project manager with sound management principles must be able to complete the project within the due date and meet the objectives and desired outcomes that have been envisioned from the get go.

Jul 2010
POSTED IN Steven Macdessi

Steven Macdessi on Stages of Project Management

By Steven Macdessi

Project management carries a heavy responsibility. The project manager is tasked to ensure that the plan is being implemented properly. Everything must meet the deadline otherwise gridlocks might occur in the project flow. This is because the next phase of the initiative may not be able to proceed without the completion of the previous step. Identifying the basic stages of project management is helpful in this regard. These include (1) Conception, (2) Definition, (3) Operation, and (4) Divestment/Termination.

All projects go through the four stages. But beyond identifying the phases, it is important to determine the specific aspects that go into the process. The elements in the stages of project management itself will differ depending on the complexity of the project and the industry it’s in. Below is an overview of what you should expect at each stage.


This involves the initial planning of the project. It can start with a thought, an idea, or a desire to change something. New opportunities are always presented when new opportunities are discovered. The concept of the project can be as simple as expanding on the existing systems or as complex as designing a whole new process altogether.

But the end goal of conception is always to improve things as it stands now. The conceptualisation phase should then move on to the formulation phase. It is important to determine how realistic it is to implement to said complex. The plan should clearer and more solid before it proceeds to the next stage.


The definition stage is all about refining the elements found in the conceptualisation stage. Every aspect that will be involved in the project must be identified and its functions defined. Among the steps that must be taken at this stage include preparing detailed plans, spotting high risk areas, creating the list of project requirements, and preparing documents (procedures, budgets) for the project.


If you’re working on engineering or other technology projects, for example, it is crucial to determine how the output of this project will fit in into the company’s overall system. Would it make everything more efficient or less so? Determine the impact of your initiative and find out if it is still worth pursuing. If it is, make sure that it is adequately supported to achieve best results.


Finishing a project is definitely a cause for celebration. But as a project manager, it doesn’t stop there. The output should be tested and retested to find out if it is ready to be fully-operational. In addition, all files relating to the project must be turned over to the company. These should be well-maintained and arranged so that it would be easy to look back when potential issues arise.

Jul 2010
POSTED IN Steven Macdessi

What is in a Quality Assurance Plan?

If you’ve been in business long enough, you’ve most likely already heard about setting up a quality assurance plan. A lot of businesses, big and small, already have theirs in place. If you don’t have one yet, you might want to get started creating one.

The term is already an obvious giveaway to its definition. It implies the company’s thrust towards planning to produce and deliver products that are so good and effective that customers will almost always be satisfied. The individuals therefore who are assured are the ones who pay for what you sell.

Assuring customer satisfaction is therefore a relevant concept here. This is why you should also want to know why it is important. When you have a good quality assurance system that promotes satisfaction, you ensure the continued existence of your business. The more satisfied customers are, the more they’ll keep coming back to you. That means more income for years to come.

To make sure that you will always be able to churn out good products, you need to make sure that your plans are organized. The first step that you would always have to tackle in system creation is the identification of objectives. These should always be in line with customer needs and wants. You can get ideas of these through actual feedback.

Once you know what you need to concretely accomplish in a quality assurance program, the next step is to define roles and responsibilities. This simply means putting on the table who is in charge of what. All members of your team should be encouraged to ask questions to promote a thorough understanding of what is expected of them and what needs to be done.

The next step in planning is to create a structure or outline for coordination. Companies typically have several teams in charge of various standards and general responsibilities. It is a must for the team in charge of assuring product value to make sure that its system components and actions are in harmony with those of others. Otherwise, some points might contradict and make the accomplishment of objectives difficult.

Quality assurance plan task and schedule definition is the final planning step. This involves outlining what specific tasks need to be done and accomplished within a set time frame. This wraps up the brainstorming component in a comprehensive program and is followed by the phases that cover implementation, checking and action.

A good solid system actually does more than make customers happy. Companies can use their programs to their greater advantage to achieve ISO certification. Getting certified is an optional move for companies but you might want to apply for this to enjoy more benefits. It is generally known that certified companies are regarded even more highly by customers, business partners and other companies because of their having met international standards.

There is no doubt that you only stand to benefit from planning for a quality assurance system. Consistently providing good products or services is the only way you can convince customers that you are worth sticking it out with…

Jul 2010