Risk analysis is the process of identifying all the potential issues that can go wrong with an activity and then estimating the probability of each happening. It should form part of any significant contract management process and is a fundamental part of determining your contract strategy. The process can range from a simple listing of risks on an informal, intuitive basis to a formal process involving set procedures and working with other professional disciplines in brainstorming and technically and financially evaluating potential risks.
A more formal process may involve the establishment of a risk register for each tenderer and, following contract award, the transfer of the register of the successful tenderer to the contract management team for use in risk assessment.
In addressing the fundamentally important issue of risk in contract management, ENC Consulting adopts a continuous “what if” mentality throughout the assessment and review process. Risk management requires a professional who possesses knowledge of techniques, an analytical mind set, objectivity and a knowledge and thorough understanding of their organisation’s business and the market. It is advisable to seek to mitigate and remove risk whenever possible before contract award.