Our summer read has been ‘Project Risk Quantification‘ by J. K. Hollmann. The author is an extremely well known contributor to the AACEI and is consulting globally around estimating and estimating accuracy.

The book is altogether excellent and a must read in terms of project risk. It is clearly a reference handbook as it puts together a number of very interesting empirical information on project cost and schedule overruns that can be used straight away as an order of magnitude.

Some points we have particularly liked:

• The useful conceptual distinction between systemic risk (due to the organization and project setup, such as scope development, project management systems and competency etc.), project-specific risks and risk related to industry cost escalation and foreign currency exchange.
• The concept of tipping point into chaos for complex projects and the qualitative parameters to monitor in that respect.
• The historical perspective and review of existing research on large projects’ overruns

One aspect that has kept us a bit disappointed is that the book is clearly written mainly from the perspective of the Owner and during the preparatory phases of the project. While some aspects of Contractor and execution risk management are mentioned, it does not fully address the Contractor execution perspective which is complicated by interfaces with the Owner and Subcontractor.

Altogether a recommended read which hopefully will generate substantial progress in the understanding of Project Risk!