Project Risk Management

PRIMA Method
Sorin Fitero
 PRIMA Method

• The PRIMA method focuses on the bid

process.

• The method allows the building of technical

solutions. To choose between several
technical solutions, the method supports cost
estimation and risk evaluation.
 Definitions
• Risk: Opportunity vs. Hazard, Internal vs.
external risk
• Risk description process: Cause, known by
its probability; Risk, known by risk exposure;
Impact, known by its gravity ;
• Opportunity: The cumulative effect of the
chances of uncertain occurrences, which will
affect project objectives positively. Opportunities
are considered in PRIMA as positive risks.
 Definitions (2)
• Hazard: A condition associated with the design,
operation or environment of a system that has the
potential for harmful consequences. Hazards are
considered in PRIMA as negative risks.
• Internal Risk: Internal risk is the risk that is supposed
to be under the company control, about its products,
processes and resources.
• External Risk: External risk is the risk that the
company does not control, such as market shifts or
government action, or the product interactions with the
environment or the customer after product release.
Risk Evaluation Methods

• Identification
• Assessment
• Ranking-prioritisation
• Mitigation actions
• Iteration
The Risk Management Process
 The PRIMA Tool

• The PRIMA tool objective is to support the

PRIMA method.
• It is a co-operative support system.
 Technical Memory
• The repository of the overall company
expertise/knowledge contains all technical
and organisational information that is
required for bidding.
• The aim is to improve the ability of
companies to prepare reengineering of
their entities and processes as soon as
or even before a bid is successful.
 Technical Memory (2)
• This goal is achieved by : a database of recurring
entities and processes or of entities that can be
reused, if necessary with adjustments, by bid
managers.
• The repository can be used by all actors involved
in the bid processes.
• The impact of a co-operative repository is to
facilitate and improve the capitalisation and
exchange of knowledge.
 Costs Memory
• Costs are
allocated to
the resources
used by the
processes
(analytical
cost
estimation)
 Decision Support System
external internal
Information Information
data base

External Models Internal

Risk Risk
dashboard,
value analysis
Price Cost
Decision
 Conclusion
Expected improvements of the PRIMA Tool:
•Supports a risks management plan early at the
beginning of the contract
•Conducts a documentation on the risks
associated with the projects
•Organizes the risks experience/knowledge
return from the bid phase start
•Supports decisions : Bid / No bid & Make or
Buy
•Support to bid construction (rapid evaluation
from experience return)
 Conclusion
• Technical solution choice support : evaluation and
comparison through risk assessment in parallel of
external elements
• Better experience feedback from previous bids
• Good decision probability improvement
• Co-operative work during bid process
• High level of visibility and integration for top
management (Company position)