{"id":4921,"date":"2010-09-03T07:00:09","date_gmt":"2010-09-03T14:00:09","guid":{"rendered":"https:\/\/svapm.org\/?p=4921"},"modified":"2010-08-29T08:59:11","modified_gmt":"2010-08-29T15:59:11","slug":"green-project-management-and-the-bp-deepwater-horizon-spill-pt-3","status":"publish","type":"post","link":"https:\/\/svapm.org\/?p=4921","title":{"rendered":"Green Project Management and the BP Deepwater Horizon Spill(3\/3)"},"content":{"rendered":"

\"\"<\/a>A joint post from EarthPM and TenStep:<\/em><\/span>
\nLast time we introduced this series and outlined the focus for the topic of green project management using the Deepwater Horizon disaster as motivation. In this post, we’ll cover how we’d work ‘green’ project considerations into the Project Charter, Project Scope Management, Project Integration Management, Project Management Plan, Requirements Management. In this last of three parts, we’ll cover Cost Management, Communication Management, Risk Management and Procurement Management and give a brief summary.<\/p>\n

Cost Management<\/h2>\n

When estimating project costs, did BP consider costs for implementing any risk response strategies?<\/p>\n

As mentioned in the Charter section, one could look at the Kevin Costner-funded Ocean<\/a> Therapy centrifuge boats as an example. For a relatively small investment, BP would be buying not only an easy way to clean up after a possible spill, but would gain valuable positive PR by aligning with the high-profile actor and his efforts to protect the Gulf. Perhaps it is too optimistic to think that the oil companies would have identified oil cleanup technology as a part of risk-response, but it certainly is within the realm of reason that cleanup technology and costs would be included in risk contingency plans (the plans that are put into effect if the original risk plan fails).<\/p>\n

In fact, a recent news story shows that \u2013 although late \u2013 the oil industry has pooled their resources and is collaborating on oil spill response. See this Reuters news story<\/a>.<\/p>\n

Identifying the costs related to the project\\\u2019s environmental aspects allows the project manager to discuss the costs with the Sponsor and determine whether the cost is more than offset by the project results. The financial costs of the realized threat are so high in this case \u2013 in the tens of billions of dollars and in fact the continued life of the company itself \u2013 that a different type of thinking has to be applied. As is obvious now, BP could have invested more upfront to further mitigate or avoid the risk of spilling oil into the ocean. Even with Green Project Management, if BP\\\u2019s decision was not to invest more in a risk response strategy, then perhaps they should have estimated the contingent costs required for a clean-up activity as they are currently undertaking. See the risk management section.<\/em><\/p>\n

Communication Management \u2013 Identify Stakeholders<\/h2>\n

How thorough was the stakeholder plan and ultimately the Communication Plan prepared by BP for this project? This project appears to have many key stakeholder groups, both internal and external. Was every major stakeholder group \u2013 internal BP, NGOs, government, industries\/associations (e.g., fishing along the Gulf Coast), etc \u2013 identified and considered? Were they all included in the communications as BP developed and implemented the oil rig?<\/p>\n

What type of communications plan would allow BP Chairman Carl-Henric Svanberg to say \u201cwe care about the small people.\\\u201d? We assert that with properly indentified stakeholders and a thoughtful stakeholder management plan, this likely would not have happened.<\/p>\n

Risk Management \u2013 Probability and Impact Assessment<\/h2>\n

Really, this entire incident comes down to the way BP and others managed project risk. The context is greater than risk management, as you can tell by the number of other headers in this document. But it really comes down to project risk management. With \u201cgreenthink\u201d, risks may be evaluated differently.<\/p>\n

If we consider environmental factors that had never been applied, then BP may have identified the risk of the blowout as an extremely low probability of occurrence (based on prior experience, faith in the blowout preventer, competitors\\\u2019 experience, etc) but a very high impact when considering the environmental impact. In fact, a very similar accident occurred in 1979 the Ixtoc<\/a>. In that case, the blowout preventer also failed. So there was a precedent for this type of failure. It could not be considered a \u201cfailsafe\u201d solution. The assessment could have also included the environmental impact of a blowout that occurred in Santa Barbara, California, in 1969. Was their assessment of the impact high enough?<\/p>\n

With such a low probability, you would have to have a huge impact for the product of probability and impact to give a risk score worth pursuing. We assert that the probability was considered to be zero and that the impact was tremendously undervalued. Without considering the environment aspect in project management process of risk management, the product was low enough that the risk mitigation and response was inadequate. As we noted above, Green Project Management may not result in a different decision. However, we are discussing this event because it truly depicts the importance of considering the environment and making sure that all project-related risks are properly identified, quantified, and addressed with the Sponsor and key stakeholders.<\/p>\n

Procurement Management<\/h2>\n

When planning and executing procurement activities for this project, did BP:<\/p>\n