Applying the PDRI in project risk management



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Research conducted by the Construction Industry Institute (CII) shows that adequate pre-project planning benefits project in the areas of cost, schedule, and operational characteristics. Pre-project planning is the project phase encompassing all the tasks between project initiation to detailed design. The development of a project scope definition packages is one of the major tasks in the pre-project planning process. Project scope definition is the process by which projects are defined and prepared for execution. It is at this crucial stage where risks associated with the project are analyzed and the specific project execution approach is defined. Development of the Project Definition Rating Index (PDRI) in 1996 provided an effective and easy-to-use tool for project scope development for industrial projects. A complementary PDRI was developed for building projects in 1999. Since introduction, the PDRI (both versions) have been widely used by the construction industry and serve as an important tool for measuring project scope definition. The PDRI helps a project team to quickly analyze the scope definition package and predict factors that may impact project risk. However, since its introduction, little additional analyses have been conducted looking at the PDRI. Data from 140 capital projects representing approximately $5 billion in total construction cost were used for this research analysis. The relationship between good scope definition and enhanced project performance were demonstrated. Analysis of PDRI scores identified poor definition scope elements and quantified their potential impact to project outcomes. Risk control procedures were examined and recommended to mediate high risk areas, such as poorly defined scope elements. A systematic risk management approach was proposed and explained in detail. Research limitations, conclusions and recommendations are also discussed in this dissertation. This research effort extends the use of PDRI as a project management tool in the process of capital facility projects delivery.