Project Risk Management Practices in Engineering Consultancies in Gauteng, South Africa

Abstract

The focus of this study is on the application of project risk management (PRM) in engineering consultancies, a specific type of Small and Medium-sized Enterprise (SME), in turnkey construction projects. Literature is abundant on project risk management, but little has been published on its application in engineering consultancies.

A case study methodology is used to provide insights into how PRM is practised during the management of projects by engineering consultancies in Gauteng, South Africa.

Data on risk management (RM) in projects was obtained through interviews with project managers, directors and other senior personnel. Thematic analysis driven by grounded theory is used to analyse the transcripts from the interviews in this study. The grounded theory approach is used to critically review the responses gathered during the interviews.

It was found that the risks experienced in projects by engineering consultancies are very similar to those experienced by companies in the construction industry. A framework was developed for the identification of risks & opportunities specific to engineering consultancies. Inhibiting and supporting factors for the implementation of risk management practices specific to engineering consultancies were also investigated and a framework is proposed to be used by engineering consultancies. The study indicated that applying risk management practices in engineering consultancies has a huge impact on the organisation’s reputation and that RM aids in mitigating risks early on.

Keywords: Project Risk Management, Engineering Consultancies, Project Management, Risks, Opportunities.

1.          Introduction

Implementing proper risk management from the initial stages and during the complete lifecycle of a project can increase the likelihood of success. Project teams that plan for unexpected events are better equipped to deal with problems if they emerge. This research study will investigate the risks experienced by engineering consultancies in turnkey construction projects; the risk management practices (RMPs) that they use to manage project risks as well as the factors that inhibit/support the application of RMPs.

Engineers often ignore managing risks in their projects, but it can contribute to various aspects of overall project success (Tzvi & Michael E, 2001). Unfortunately, crisis management is usually more observable because of the imminent danger haltering the success of the project, but it is risk management that helps reduce risks, to begin with (Schwalbe, 2007; Smit & Watkins, 2012).

When an uncertain event occurs, it may lead to a disaster or it may lead to a surprise. Because of uncertainty, all engineering projects have some form of risk. According to the Project Management Institute, risk management (RM) is an organised method used to identify and evaluate risks to select and develop options to mitigate the effect of threats or to enhance the effect of opportunities (PMBOK (PMI), 2003). In dealing with projects, risks can be classified as threats (unfortunate/negative events) or opportunities (positive events) that affect project constraints such as scope, schedule, cost, or quality. Traditionally though, risk managers tend to focus more on the potential negative effects of uncertainty.

Various standards and guides have been developed to support project managers in achieving the objectives of risk management. These standards are widely recognised in the industry, but most of these standards were primarily designed with large projects in mind. But the procedures documented in these standards are not necessarily always applicable to project management of smaller projects managed by SMEs (Marcelino-Sádaba et al., 2014; Pérez-Ezcurdia & Marcelino-Sádaba, 2012; Turner, Ledwith & Kelly, 2009; Rostami et al., 2015; Gao, Sung & Zhang, 2013). Several studies indicated that implementing existing formal RM frameworks is not feasible since SMEs’ have restricted resources (Sullivan-Taylor & Branicki, 2011; Gunasekaran, Rai & Griffin, 2011; Marcelino-Sádaba et al., 2014).

1.1.     Risk Management in engineering consultancies

In general, and in particular for SMEs, companies’ growth is accomplished through projects (Marcelino-Sádaba et al., 2014). Projects are also usually internally driven and not always managed by experienced staff. Small organisations generally do not use the standards used by larger organisations for project management. In some cases due to their relative complexity (which is required for larger firms, but not necessary for smaller projects), and in others simply due to ignorance (Marcelino-Sádaba et al., 2014; Turner, Ledwith & Kelly, 2009).

An engineering consultancy is a specific type of SME which is scantily addressed in the literature. Therefore, research that involves the application of project risk management in SMEs, in general, is used as a reference in this study.

1.2.     The rationale of the research

A general perception often encountered is that consulting engineers carry very little risk since the nature of their work is usually only that of an advisory role (providing professional advice to clients). However, clients often show a readiness to sue consultants for losses suffered as a result of negligent advice or flawed designs (Flanagan & Norman, 1993). Several consulting firms had to close their doors in the past because of damages awarded to them by parties that have suffered losses due to such poor designs. In 2006, ECSA’s legal advisor confirmed that about ninety-five per cent of complaints received by ECSA involved structural engineering practice and most of the complaints relate to technical advice rather than business practices (Watermeyer & Smith, 2014). A few structural failures have led to the disqualification of professional engineers on account of gross misconduct. This indicates that consulting engineers face significant risks when accepting responsibility for their designs.

Risk management is recognised as a crucial activity in project management to ensure the successful delivery of projects. Risks often jeopardise project performance in SMEs. Several Risk Management Practices (RMPs) have been developed, to address the occurrence of project risks. However, there is little consensus in the literature on how risk management should be applied in SMEs (Renault, Agumba & Ansary, 2018).

1.3.     Research Problem & Objectives

This study focuses on risks and opportunities experienced by engineering consultancies (a specific type of SME) in Gauteng and how RMPs are used in practice in these engineering consultancies. Literature is abundant on project risk management, but the research that has been done on this specific type of SME is scarce in the literature. Gauteng is the most populous province in South Africa and is considered an economic hub of South Africa.

The research questions that the researcher will aim to answer in this study are:

1. Are the risk management challenges faced by engineering consultancies in Gauteng, South Africa similar to those experienced by construction firms in general?
2. What kind of threats and opportunities do engineering consultancies experience during projects?
3. What kind of risk management procedures/practices (RMPs) do you follow to manage risks/opportunities during projects?
4. What are the barriers that prevent/inhibit people follow risk management practices in engineering consultancies?
5. What are the success factors that motivate people to do risk management in projects? (To overcome the barriers that prevent people from doing it.)

The study will aim to provide recommendations on how engineering consultancies can improve their risk management practice.

2.          Literature Review

2.1.     Risks experienced by engineering consultancies

Engineering construction businesses in South Africa face many risks (Okonkwo & Wium, 2018) and they tend to have a high awareness of project risk management (Visser & Joubert, 2008). The focus of this study will be on engineering consultancies that specialise in the management of projects.

Projects can have internally and externally driven risks. Internal risks are usually associated with information known to the owner, whereas external risks are harder to manage (Munier, 2014). Since internal risks are usually known to the owner, it is usually controllable to an extent while external risks are considered uncontrollable risks (Rezakhani, 2012; Nicholas & Steyn, 2017). Internal risks can further be categorised as non-technical or technical risks as shown in Figure 2.1. Rezakhani (2012) also categorised the external risks further into unpredictable and predictable risks. The author, however, disagrees since defining risk as ‘predictable’ inherently disqualifies it as a risk. If it is predictable and can be accounted for, then it is not a risk. It may however be considered less predictable or more predictable.

Figure 2.1: Project risks breakdown

Source: Adapted from Rezakhani (2012)

2.2.     Project Risk Management Practices in engineering consultancies

Risk Management Practices (RMPs) enable organisations in the engineering and construction industry to perform more accurate project budget estimates through a well-informed assessment of project contingencies (Chihuri & Pretorius, 2010; Karimiazari et al., 2011).

While a project progresses circumstances may change. Some of the risks expected in the initial stages of the project may not occur. New threats may then come into play and therefore, risk management should be seen as a continuous exercise that should be performed through all the various stages of a project (Okonkwo, 2014).

Seven primary risk management practices were identified from the models reviewed: (1) context establishment, (2) risk identification, (3) the risk analysis activity, (4) the risk evaluation/ranking activity, (5) the communication approach and evaluation, (6) risk response and action planning, and (7) monitoring, review and continuous improvement (Boehm, 1991; Fairley, 1994; Dorofee et al., 1996; Kliem & I.S., 1997; Chapman, 1997; Ward, 1999; IRM, AIRMIC & ALARM, 2002; Smith & Merritt, 2002; PMBOK (PMI), 2003; AZ/NZS-4360, 2004; Hillson, 2007; Alhawari et al., 2007; ISO 31000 (BSI), 2018; Renault, Agumba & Ansary, 2018).

2.3.     Barriers against & success factors for the successful application of Risk Management

Certain things need to be “in place” to facilitate the management of risks in projects (success factors). When they are “out of place” it creates barriers that hamper the effective management of risks. When they are “in place” however, they become success factors that drive the effective management of risks. The most important factor is the support of upper management. They must “walk the talk” and recognise the value of project risk management. The cultural environment must also be accommodating to the process and employees must be educated continuously on how to manage risks.

It is evident from previous research on risk management that, due to the complexity of standard risk management procedures, smaller and medium organisations find it hard to implement risk management correctly (Turner, Ledwith & Kelly, 2009).

Several barriers inhibit the effective management of risks while managing large construction projects (Fischer, 2015; Dandage et al., 2018; Akintoye & MacLeod, 1997; Chileshe & Kikwasi, 2013; Chihuri & Pretorius, 2010; Lyons & Skitmore, 2004; Chileshe, Hosseini & Jepson, 2016):

1. Lack of knowledge/expertise (through training)
2. The complexity of analytical tools
3. Lack of budget (cost)
4. Lack of manpower (resources)
5. A low profit margin
6. Lack of time
7. Cultural difference
8. Lack of Government Legislation
9. Lack of potential benefits
10. The attitude of decision-makers (lack of top management support)
11. The industry is not mature enough
12. Failure to plan
13. Different recognition of risk control strategies
14. Human / Organisation resistance
15. Lack of Coordination/Cooperation
16. Lack of experience
17. Lack of joint risk management
18. Lack of agreement among stakeholders on risk management practices.
19. Avoidance of talking about risks
20. Cross-functional conflicts
21. Failure to clearly define the risk

According to Hillson (2012), all barriers/excuses for not applying risk management practices can be overcome by focusing on critical success factors (CSFs). A long list of success factors can be developed. Hillson (2012) however divided the success factors into four main categories:

1.    A supportive organisation

2.    Competent people

3.    Appropriate methods, tools and techniques

4.    A simple scalable process

A fifth important success factor that is not defined by (Hillson, 2012) may also be added (PMI, 2009; Hosseini et al., 2016):

5.    Open, honest and effective communication

3.          Proposed Model

To determine the role of project RMPs in engineering consultancies, one needs to understand the risks (threats and opportunities) involved in the projects that they manage. There are several kinds of risks that engineering consultancies experience whilst managing projects. Project risks can be either internally or externally driven. This is our starting point as shown in Figure 3.1. Internal risks can further be categorised as technical/non-technical.

Various risk types were identified under each category from literature (Piyadasa & Hadikusumo, 2014;Rezakhani, 2012;Schinnerer, 2014;Okonkwo & Wium, 2018;Tang, Lu & Chan, 2003;Kometa, Olomolaiye & Harris, 1996;Maritz & Robertson, 2012;Jayasudha & Vidivelli, 2016;Rehacek, 2017;Sharma & Swain, 2011;Bowen et al., 2007;Ayat, 2013;Watermeyer & Smith, 2014;Bubshait, Al-Said & Abolnour, 1998;Lopez et al., 2010;Love, Edwards & Irani, 2008;Love, 2002;Burati, Farrington & Ledbetter, 1992).

Many studies have been published that investigated the different kinds of threats experienced during projects. Few however have even attempted to compile a list of opportunities experienced during the management of projects. Whereas risks are things that can have a negative impact on a project, opportunities should be understood as factors that can have a positive impact on a project. This study will aim to provide insight into the management of threats as well as opportunities in projects by determining how engineering consultancies implement risk management practices at their organisations. Thereafter, the processes (RMPs) that are followed by engineering consultancies to manage these risks will be investigated. Finally, the factors that inhibit/prohibit the application of RMPs in engineering consultancies will be investigated. Since there are few sources available in the literature on the barriers/success factors that focus on the positive side of risk management (opportunities), this study will aim to address this shortage in the literature.

Even though there is an abundance of literature available on risk management, these principles are not necessarily applied by engineering consultancies in projects.

Figure 3.1: Research model for risks experienced by engineering consultancies

4.          Research Method or Approach

4.1.     The rationale for the Research Methodology

The type of research being conducted can lead the researcher in choosing a type of research design. Research designs can be causal-comparative, correlational, explanatory, descriptive, or exploratory. The case study approach is useful for explanatory, descriptive or exploratory research (Yin, 2013)

The case study methodology is generally used for answering “how” and “why” questions and is more suitable for situations where multiple variables are at play. The research design for this study will be explorative in the sense that it will investigate the “phenomenon” of RMPs in engineering consultancies in Gauteng, ZA. This kind of research investigation does not require a hypothesis and is regarded as extremely flexible (Meyer, 2001).

Case studies aim to use many forms of data to gain an in-depth holistic understanding of a particular contemporary situation within its real-life context by analysing various events or environments and their interactions (Zainal, 2007). Since the purpose of this study is to gain an in-depth understanding of how existing risk management practices are applied in engineering consultancies, the case study approach was chosen. This method may help us to generate new ideas that may be tested in further studies later on. Multiple cases will be used rather than a single case to broaden the coverage of the case study.

4.2.     Research Design

There are different important aspects that case studies should encompass. It should indicate how the findings were validated, how the case/s for the study were selected and how generalisations can be made from the study (Johansson, 2003).

There are virtually no fixed guidelines that specify how to conduct a case study (Meyer, 2001). Case studies can thus use almost any combination of different data types to conclude by using triangulation methods. Several design decisions thus had to be made for this study.

Patton (1990) claimed that “there are no rules” for the size of a sample in qualitative research. The constraints of time and funding may constrain the researcher to limit a case study to only a few cases. Fortunately, some guidelines are given by authorities on case study design. (Eisenhardt, 1989) recommends that multiple cases enable better generalization than single case studies. A good rule of thumb however is to keep the range within which the number of cases falls between four and ten cases. There is no ideal number of cases for case studies, but the general view is that between four and six cases provide a good basis for a good case study.

Since cases in case studies are not “sampling units”, statistical sampling methods are not appropriate (Yin, 2009). The following criteria were used to select cases for this study:

• It must be an engineering consultancy business (or group of businesses) that operates within the construction industry.
• The organisation must be independently owned and operated.
• The organisation must consist of between 1 and 200 employees, i.e. a Small or Medium-sized organisation according to the Business Act of South Africa.
• The organisation must be accessible to the research, i.e. located within the operating sphere of the researcher.
• The organisation must be willing to participate in the study.

The target population will consist of employees involved at a strategic level (directors, project managers, senior engineers, etc.) who have been employed by the company for at least two years.

The sample chosen by the researcher for this study is selected based on convenience and purpose. The researcher chose engineering consultancies based in Gauteng, ZA because they are located close to where he resides. The sample is also purposeful in the sense that specific personnel, that may be involved in RMPs in these companies, are specifically selected. Purposeful sampling is commonly used in case study research and is especially useful for exploratory studies.

4.3.     Research Strategy/Methodology

To conduct meaningful interviews, a relationship of trust needs to be built between the researcher and the interviewees (Meyer, 2001). After contacting the interviewees telephonically a letter was sent to them via email to explain the key features of the project and to describe the extent of the issues that will be discussed in the interview. Before contacting the interviewees, the support of top management was obtained by the researcher.

5.          Results

5.1.     Data gathering process

Engineering consultancies that are actively involved in project management in Gauteng, ZA, were identified. Of the 15 companies identified as suitable cases in the previous chapter, only 7 agreed to participate in the study. The other 8 companies claimed that they are too busy and do not have time to participate in interviews.

Before commencing the interviews, consent was obtained from each respondent to record the interview. Data were collected through semi-structured interviews (with a predetermined set of questions) that took between 40 minutes and 70 minutes. During the interviews, the general views of the correspondents on project risk management (PRM) were explored.

5.2.     Data information gathered

Ten professionals were interviewed in total. Six interviews were done remotely with the respondent while the remaining four were done in person either in a boardroom or an office.

The cumulative years of experience in project management for the study group is 157. The average years of experience among the respondents are 15.7 years. The respondents have experience in various industries: infrastructure engineering, chemical/process plants, power generation, & the nuclear industry. The respondents are involved in the management of different engineering disciplines: chemical, civil, electrical, mechanical, and structural. The role of the different respondents were project managers, senior engineers, program managers and engineering managers.

It should be noted that many engineering consultancies are structured as a group of smaller companies within the group. For this study, respondents from the same group of companies were regarded as part of the same case even if they are employed under a different company name within the group of companies. The details of each case are listed in Table 5.1. There are 10 respondents from 7 different groups of companies.

Table 5.1: Cases investigated (Engineering Consultancies)

None of the companies kept formal policies or risk management guidelines, but they have informal practices in place like a using risk register template. The only source of information that could thus be used in the study was the transcripts from the interviews.

5.3.     Data analysis procedure

Before starting with the analysis, all the relevant data were filed systematically and labelled with appropriate consistent code names.

Thematic analysis driven by grounded theory (or categorical analysis) was used to analyse the transcripts from the interviews in this study. The grounded theory approach is used to critically review the responses gathered during the interviews. Soratto, Pires & Friese, (2020) describes three phases of thematic content analysis: The first phase (pre-analysis) involves adding documents to be analysed and grouping them into document groups. The objective of the second phase (material exploration) is to reflect upon the data. Quotations relevant to the research objective are highlighted in the text and codes are assigned to these quotations. A code is simply a label (a word or a phrase) that represents the main idea or ideas (if more than one code is assigned) contained in a set of quotations with similar ideas. Codes with similar ideas are then grouped. For this study risks that are categorised as external risks can be grouped together for example. The third phase involves the exploration of the coded data using various analysis tools. The raw data is processed into meaningful and valid tables, figures, or diagrams.

The groundedness of codes is an indication of the number of instances that the code was assigned to the data (the codes are linked to relevant quotations in the text). It refers to the frequency/prevalence of the specific code. The density of the code refers to the number of other codes linked to a code (by the researcher). The density of each risk type thus indicates the number of risks identified within the risk type.

An evaluation was done to determine the most significant risks experienced by engineering consultancies and to evaluate the most significant barriers to the implementation of PRM against the success factors of using risk management practices in projects.

5.4.     Data analysis

5.4.1.    Types of risks experienced in engineering consultancies

All the risks identified during interviews were coded in Atlas.ti 9. The extent to which each risk identified is grounded is shown in Figure 5.1 in the form of a code cloud. Three risks stand out above the rest: incorrect/insufficient information, poor scope definition & poor design.

The risk of poor scope definition is related to incorrect/insufficient information since the scope is usually based on information received from clients. Ensuring that the engineering design is based on the correct information and scope is paramount to the success of any project. Comments included:

Resp. H-1: “A big, big issue … lack of information and … communication.”

Resp. L-1: “The biggest risk … is typically gathering information from the client.”

Comments about scope changes included:

Resp. A-1: “Client scope changes in fixed-cost projects are also quite a big risk”

Poor design was deemed an important risk by most of the respondents. If a design is faulty or not optimised, it may lead to significant costs to a project. Comments about poor design in projects included:

Resp. K-1: “…there is a risk of poor execution or poor design…”

All the risks discussed by the respondents were coded and grouped into different risk types. The different risk types, in turn, were divided into different risk categories.

It should be noted that external and internal risks are often interrelated as mentioned by some of the respondents: “When talking about internal and external risks, they basically have a lot in common. Or they are actually connected.” (Resp. M-1)

During the interviews, some respondents referred to certain risks several times. To ensure that a certain code (risk) does not appear to be more important than another code by reporting it erroneously often, the coding was ignored when the code was mentioned often by the respondent, and it was only captured once. This approach is based on the research method used by Müller & van Waveren, 2020. The risk codes were then linked to “smart codes” in Atlas.ti 9. “Smart codes” are essentially queries that automatically assign the “smart code” to any piece of data (quotation) to which one of the codes within the “smart code” group is assigned to. The same approach was followed in linking the risk types to the different external/internal risk categories. This approach ensured that the groundedness shown at each node gives a true representation of the significance of each risk or risk type.

Since each risk was only coded once per document and “smart codes” were used to categorise them into different categories, the groundedness of each category of risks indicates the perceived importance of each risk category for the cases investigated.

The framework that summarises the different risks experienced by engineering consultancies in Gauteng is shown in Table 5.2 (external risks), Table 5.3 (internal non-technical risks) & Table 5.4 (internal technical risks).

Many of the risk types picked up during the interviews correlated with the risk types identified in the literature. When we look at the different types of external risks gathered from the interviews there are many similarities. The following different types of external risks in engineering consultancies correspond to the risk types identified for the industry in the literature review:

• Client risks
• Commercial/financial risks
• Environmental & natural hazards
• Labour, social & communities
• Legal & contractual risks
• Political & governmental

The following external risk types were added to the list following the analysis results:

• Communication
• Company IP & reputation
• Health & safety
• Logistical risks
• Vendors, suppliers & sub-contractors

Figure 5.1: Relative groundedness of the risks identified in the study (External risks are indicated in red, internal technical risks in purple and internal non-technical risks in pink.)

Table 5.2: External risks experienced by engineering consultancies

Table 5.3: Internal non-technical risks experienced by engineering consultancies

Table 5.4: Internal technical risks experienced by engineering consultancies

Market-related risks were only mentioned once during the interviews and were categorised under the commercial/financial risk type. Economic risks were not mentioned at all during the interviews.

Piyadasa & Hadikusumo (2014) categorised sub-contractors and partners as joint venture type risks under project risks. The risks related to partners/suppliers/sub-contractors was initially categorised as an internal non-technical risk in the literature review. Since the risks related to these joint ventures/partnerships come from outside the company it was categorised under the external risks.

Logistical related risks are usually due to factors outside the control of the company, logistical risks were categorised as a separate type of risk under external risks.

The internal non-technical risks picked up during the interviews were divided into three categories:

• communication-related risks,
• schedule & scope related risks,
• resource-related risks.

Risks related to the schedule of a project were picked up during the literature review. The respondents interviewed did refer to these types of risks often but focused more on scope definition which can have a strong influence on the schedule if one gets it wrong.

The resource-related risks are a new type of risk that were added to the list of internal non-technical risks. Resource related risks in this context refer to the skillset/experience of internal resources, resource retention and succession management, availability and the ability to perform required tasks.

No form of unethical practice was mentioned in the interviews with respondents. It is thus assumed that unethical practices rarely occur in engineering consultancies in South Africa. This does not mean that it cannot occur.

Internal technical risks discussed by the respondents related to the following main categories (types):

• Quality & regulatory risks
• Engineering/design risks

A code-document table was generated in Atlas.ti showing the prevalence of the different risk types (the number of times it was mentioned/discussed during the interviews) for each case (company group).

A code-document table that shows how many times every risk type (code group) was coded for each case (document group) was. The table was then normalised since certain cases consist of only one respondent while others consist of two respondents. Normalisation means that each document is considered to have the same number of quotations. Unbalanced documents then become more comparable for code-relative frequencies. (Note that the column-relative frequencies remain the same for both tables.) The relative perceived importance of each type of risk is quantified by the code-document table shown in Table 5.5. Since not one of the risks identified was coded more than once in each document (transcript), this table gives a fairly accurate representation of how important each risk type is to the specific case investigated. Client risks are perceived to be important for at least 4 of the cases investigated. Engineering/design risks are also perceived to be especially important relative to other types of risks. Schedule and scope related risks, as well as risks related to suppliers/sub-contractors, were also discussed many times during the interviews. A clarification of the values shown inside each cell of the table is given below in Figure 5.2.

Figure 5.2: Clarification of the values in each cell of the code-document tables

 5.4.2.    Opportunities experienced in engineering consultancies

During the interviews with respondents, eleven different opportunities were identified. These opportunities do not occur often, but engineers and project managers should always be on the lookout for opportunities like these. The relative importance (groundedness) of each opportunity identified is shown in Figure 5.3.

Table 5.5: Code-Document Table showing the relative importance of each type of risk for each company group (case)

Figure 5.3: Code cloud - Relative groundedness of the most significant opportunities identified in the study

The opportunities are not necessarily external or internal to the organisation. Note that some of the opportunities are closely related to some of the risks identified in the previous section. One opportunity that stands out (grounded by three coded quotations) is that engineering must be done to optimise designs to save costs. This may involve value engineering “…where we can optimise the design to save quantities..” (Resp. A-2). It may also involve “designing equipment in such a way that you can pre-assemble it beforehand and install it as a complete unit… to save time, cost and then also to make it safer to install.” (Resp. M-1).

Although it rarely occurs, there are also sometimes opportunities for scope increases in projects. Scope increases may occur when the client simply decides to expand the scope as more funds become available, due to grey areas in contracts or when new unforeseen risks are identified. Comments by respondents regarding scope increases include:

Resp. H-1: “The only opportunities you quite often get during a project is if the client increases the scope.”

Resp. M-1: “…sometimes the client might not have scoped something quite clearly. That creates an opportunity for having site instructions on site…”

The main opportunities experienced in engineering consultancies were investigated and discussed in this section as required by the second research question for this study.

 5.4.3.    Risk Management Practices (RMPs) performed by engineering consultancies during projects

The respondents from five of the engineering consultancy groups indicated that they do follow a risk management process that is based on the principles of acknowledged risk management standards in their projects. The two respondents from one of the companies differed in their opinion in that the one said that they do follow a risk management process that is based on international standards whereas the other respondent from the same company said that they do not follow a risk management process at all. The remaining one of the cases also indicated that they do not follow an RM process in their projects.

All the basic risk management tools that the respondents mentioned to identify risks, analyse them, and respond to them were coded in the transcripts. The risk register is the main tool used by the cases investigated. The risk matrix usually includes a risk chart/priority table incorporated in a spreadsheet. Brainstorming is also used to identify

 risks. Some of the respondents discussed other risk management tools like SWOT analysis, SCAT analysis, What If analysis HAZOPs and checklist that they use to manage risks.

 5.4.4.    Barriers to and success factors for the application/implementation of PRM in engineering consultancies

Codes were assigned to quotations that referenced barriers to the implementation of risk management in projects as well as success factors that encourage people to manage risks in projects. The groundedness of each code is based on the number of quotations assigned to the relevant code.

The most important (most grounded) barrier to the implementation of RM in projects is that people are unaware or uneducated about the value and the benefits of PRM. Comments from respondents included:

Resp. A-1: “They don’t always appreciate the necessity to have project risk sessions to look at the implication of project risks.”

Resp. M-2: “People not being risk-averse, people not understanding risk, people that don’t have respect for what risk can do to your project or your company.”

A closely related barrier to the implementation of RM in projects is that personnel do not show appreciation for the RM process, as explained by:

Resp. M-2: “My opinion is that risk management is not given the authority that it needs to have…”

Resp. N-1: “Then they say but we’ve been doing these kinds of projects for years… don’t you come and tell me what is my risks on this job.”

Another significant barrier to the implementation of RM in projects is that engineering takes priority, especially when funds were not allocated specifically for performing risk management. Comments from respondents included:

Resp. A-1: “Especially in a design environment, one works mainly with engineers who tend to design and they like to focus mainly on design because that is the nature of engineers, to solve problems.”

Resp. A-2: “They always just focus on the technical side and they are not always aware of the risks involved in executing and designing a project.”

During the interviews, the respondents were also asked about the success factors to the implementation of risk management in projects. In other words, factors that motivate people to do risk management.

The most significant success factor to the implementation of RM in projects discussed by the respondents is that the effort/scale involved in the PRM process must be commensurate with the size of the project:

Resp. K-1: “This is typically determined by the size and the complexity of the project. The type of project would determine the type of risk analysis you would embark on.”

Resp. L-1: “But again, it has to be clearly managed… not to overcompensate the risk… there needs to be a balance of it.”

Another important success factor in the implementation of risk management principles in projects is the active participation or involvement of all the different stakeholders early on and throughout the whole PRM process. It is important to get buy-in from all the stakeholders. Comments from respondents about stakeholders' involvement included:

Resp. A-1: “The other one is that you must get buy-in to the process from the stakeholders early on.”

Resp. N-1: “The key to me is to get all the stakeholders involved as soon as possible to do risk identification in a review session.”

A framework that summarises the barriers against and success factors for the implementation of risk management in engineering consultancies is presented in Table 5.6 as required by research questions 4 and 5 for this study.

 Table 5.6: Barriers vs. success factors to the implementation of PRM in engineering consultancies

6.          Conclusions and Recommendations

6.1.     Summary of findings and conclusions

The goal of this study was to determine if the risks experienced by engineering consultancies are similar to those experienced by construction companies in general. The study also focused on how engineering consultancies manage those risks in practice and whether they use similar practices to manage the risks.

The approach taken was using semi-structured interviews with engineers and project managers to gather data about the typical risks and opportunities experienced by engineering consultancies. The respondents were questioned about the risk management practices they used. They were also asked to elaborate on the typical barriers to and the success factors for the implementation of risk management in projects in their companies. These interviews were then analysed by applying grounded theory analysis principles using the program Atlas.ti 9.

It was found that the risks experienced by engineering consultancies are very similar to those experienced by companies in the construction industry. A framework was developed for the identification of risks specific to engineering consultancies.

A framework was also developed for the identification of possible opportunities in projects by engineering consultancies.

It is evident that, even though they do not necessarily follow risk management standards, engineering consultancies are all aware of risks related to projects. The risk register is the main tool used by the cases investigated. The risk matrix usually includes a risk chart/priority table incorporated in a spreadsheet. Brainstorming is also used to identify risks. Some of the respondents discussed other risk management tools that they use to manage risks

Inhibiting and supporting factors for the implementation of risk management practices specific to engineering consultancies were also investigated. The most significant barrier found was that people are not educated about the advantages of risk management. The most significant success factors found were that the effort that goes into PRM must be commensurate with the size of the project and that all stakeholders must be involved in the process.

The study indicated that applying risk management practices in engineering consultancies has a huge impact on the organisation’s reputation and that RM aids in mitigating risks early on.

6.2.     Limitations of the study and suggestions for future research

Since the study only included a few companies in the Gauteng area, the results are not universal - not for South Africa or internationally. However, the fact that the results correlate well with the literature indicates that the regional sample is quite representative. A larger or wider sample in South Africa would probably not have yielded any major further insights.

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