Will South African Government Infrastructure Plan successfully manage potential overspending on the proposed infrastructure mega projects

from unforeseen events (RISK)

As South Africa moves towards spending billions of monies on Infrastructure Development Programmes approved by S.A Government through a multibillion infrastructure plan developed with assistance of the Presidential Infrastructure Coordinating Commission, programme management specialists including myself have to wonder and worry how much preparation is being made to ensure that adequate programme risk management processes, and resources would be ready and implemented to safeguard and protect the value of these programmes from unavoidable inherent financial losses risk, which could occur if inadequate risk management is implemented by the project owners (i.e. government project owners). It is globally accepted that risk management has become a more strategic factor in achieving organisational goals; it is especially significant when an organisation is using programmes or projects to achieve service excellence objectives, and it is also known information that most projects / programmes dont always achieve milestones within planned cost thresholds, the obvious examples were South Africas 2010 FIFA World Cup Construction Projects which overspend to finish within planned required timelines. In my experience, there is a close relationship between setting up appropriate risk based control frameworks (supported by the right business processes, the right skilled and experienced project risk resources and the appropriate programme / project governance controls that are able to cut across programme/projects functional capabilities (in other words the end to end processes)) and the success of these programmes / projects in meeting the constraints / objectives of Time (delivering within deadlines) Cost (delivering within estimated business case budget costs) Quality (delivering the product at the highest quality possible)

It is without doubt that these infrastructure programme plan is also expected to put more pressure on the already constraint PMO skilled resources on the relevant public sector enterprises, municipalities and government agencies. This alone indicates possible inherent risks that could be introduced into these multibillion projects spend. I believe that if South African government is to ensure service excellence through these programmes, it would have to also ensure that there is a clear, precise and detailed risk management measurement framework implemented to ensure the ability of these infrastructure projects to reduce risks to achievement of its objectives to acceptable levels, and to ultimately measure and report on these risks proactively. Globally there is a growing trend for organisations to be more accurate and responsive in measuring risk management at all levels including at the programme level. It is acceptable to believe that the cost of implementing risk management frameworks continues to be a concern for most business leaders, especially in these slow economic growth conditions, however I believe that if organisations implement shared integrated risk management framework these initiatives would become cost effective as there would be an optimisation of the risk management infrastructure as programmes / projects will share in the same organisational wide risk management infrastructure. This strategy would ensure less duplication of efforts. More like a risk management cost pooling Risk Management measurement cant be left to cyclical periodic internal audits investigation reports which normally happen at longer term intervals; it has to be more agile, responsive and flexible for the day-to-day decision making purposes. Because risk management has become a critical strategy formulation issue or financial model business case issue in the case of infrastructure programmes, its measurement has to be as accurate as possible as well. So, what is the most effective solution? As an experienced programme management risk professional I strongly believe that for the enterprise or programme management risk management frameworks to be adequate and effective they have to also be integrated across the following organisational capabilities irrespective of the risk management practice standards adopted by the organisation or programme:

Corporate Governance

The organisations or programmes have to implement risk management governance models that enable them to operate within King III leading practice guidelines and relevant legislation on governance. Project Steering Committees and Risk Committees are appointed for a reason Organisations would have to implement accurate methods to develop and measure the business process controls more frequently. Also, in order to ensure effective performance of these processes, centralisation of some of the key standard processes will be an imperative. All Risk Management Processes from identification to reporting to monitoring housed across organisational or programme functional capabilities has to be Lean Six Sigma aligned to be agile and efficient for strategic and operational needs of organisations or programmes. Organisations or major programmes will have to implement business continuity strategies to eliminate the risk of shut downs as much as possible. Organisations and Programmes would have amplify a culture of risk management, as well as ensure adequate risk management infrastructure and tools with the right software applications to make possible the ability to measure and report close to real time on risk indicators parallel to reporting on process KPIs. Most organisations would need to implement web based dashboarding reporting tools for measurement of risk management at all levels to achieve this responsiveness. The real question with measurement remains the availability of accurate and complete data which continues to be a challenge in many organisations today.

Business Process Management

Lean Risk Management Processes

Business Continuity

Enterprise Performance Management

This article was written by Joshua Makena (a Business Risk, IT Risk, BPM and PMO professional) Contact Joshua on makena.joshua@gmail.com for further discussion.