Evaluating project risks and developing mitigation strategies
It is vital that the business case demonstrates that the potential risks associated with the proposed EEM have been identified, evaluated and mitigated or can be managed.
One of the prime concerns will be whether requested funds will be sufficient to deliver the promised EEM results or whether more will be requested further down the line. There may also be concerns about the risk of the project falling short of the expected level of savings and other benefits.
Consider what energy prices might do relative to other costs. What if the price of carbon emission permits collapses? What about interest rates?
This will be of particular concern where new technologies or practices are involved. Any project that uses new technologies with the potential to impact core business operations or product quality can have significant cost implications.
Safety is a major consideration in all organizations. If the project involves potential safety issues, demonstration of how these fit into overall safety assessment procedures will be needed, as well as how the identified risks can be managed.
The following table illustrates some of potential risks, questions to ask and possible actions.
Some tips for managing risk:
- Follow existing risk-assessment protocols when developing a business case proposal
- Conduct stakeholder analysis on the project and discuss risk-related issues with the appropriate people
- Use trials or pilots to build understanding of potential risks and how they can be managed. This approach can provide the evidence needed to test deeply held assumptions about perceived risks
- List each of the key project risks that have been identified and the strategies that will be used to mitigate them