Technical Risk and its Mitigation at Tata Projects

Risk management is the practice of managing/minimizing risks within a project, an organization, or a

team of resources. A complete risk management program should provide processes, methods, tools, and
an infrastructure of resources and organizational responsibilities to identify and assess the risks .
A risk is defined as the possibility of suffering a loss both money and time. Therefore, a risk has an
associated probability that an event will happen and an associated negative impact or consequence if
the risk is realised. Once a risk is realised, it is no longer a risk: it is a problem which could/should be
cleared to complete the project.
The technical risk refers to the innovation failure risk by the enterprises having met with technology,
commercial or market factors unexpected changes in technological innovation process. This
unexpected changes cause the technology has radically improvement. They have a new alternative
technology or product. It also includes the insufficient investigation of the project site, lack of
informative briefing of designs, inappropriateness of the desired specifications, the unavailability of
materials, lack of decision-making by the client and lack of training facilities for a new approach to a
certain process.
Technical Risk mitigation planning is the process of developing options and actions to enhance
opportunities and reduce threats to project objectives .Technical Risk mitigation implementation is the
process of executing risk mitigation actions. Technical Risk mitigation progress monitoring includes
tracking identified risks, identifying new risks, and evaluating risk process effectiveness throughout the
projects.
Technical Risk mitigation planning, implementation, and progress monitoring are depicted in the below
figure. As part of an iterative process, the risk tracking tool is used to record the results of risk
prioritization analysis (step 3) that provides input to both risk mitigation (step 4) and risk impact
assessment (step 2).

During the very initial days of telecom development in the fields of Cellular Communication. TATA
was not having a good technical skills in building a cell tower and installing RF equipment. So during
that time this is a technical risk to the company as there are no good resources to handle and install the
equipment. So the company had recruited the resources of the required field from the companies which
are manufacturing them. Initially the RF equipment's were manufactured and procured from Sony
Ericsson , so this company was having good RF Engineers who were taken by TATA at a very attractive
salaries. Then these highly skilled resources had trained others , so that the team size had increased and
the technical risk had also minimized.
This risk is very dominant and should be always handled or else can collapse a project or company.
This had happened to Nokia, where there were only working on their Symbian OS and were not
technically developing / redesigning other OS. Then can Android which had overtook the mobile OS
and Nokia had no other option to design their mobiles with Android OS at that point of time. So had to
handover the company to Microsoft due to lack of technical ability at that point of time.
We can also consider the Kashmir railway project that we had discussed initially which shows clearly
the technical risk being ignored initially. We don't have the competency or knowledge to construct at
that altitude. Bringing goods to the site is also difficult. This had resulted in extra cost to the project.
Risk associated to project design: For every project (either power sector or other infra projects) the
design will play a major role covering the complete scope of project and specially design during tender
stage is at most important as all the products (supply portion) and process (services portion) are
designed considering the same and complete project budgeting is done based on the same. Any
deviation / changes required post order stage will affect the project time and budget. For transmission
or substation projects in NER region or J & K (India), it is known fact that site weather conditions and
soil strength, logistic challenges are completely different compared to rest of India. Hence, it is
important to conduct a detailed site survey keeping in view of tough terrain conditions and ensure to
prepare the project SLD covering all the parameters. This can avoid surprises and ensure smooth
project execution.
Risks of equipment performance for existing technology (outsourced / indigenous make): This risk as
specified is related to equipments manufactured using conventional technologies and issues related to
improper design, quality defects and defects due to mishandling in transit or during installation.For
projects with special site conditions, it is important to specify the same and ensure the offered design is
in line with the requirement. In case of product being sourced, it is important to check the
manufacturers experience in supply of identical requirements and source from the same. Also, it is
important to continuously monitor during installation and use of right skill manpower and tools to
handle the equipment properly.
Risk of equipment performance based on new technologies (outsourced / indigenous make):This is
most common risk faced in today world due to fast pace of technological advancements. This risk is
related to compatibility of a product with new technology with existing coordination equipment and
resulting changes required for rest of the components in the system. The most suited example is in
projects related to smart grids : In present trend of tough market conditions for the business to survive
and lead the market, it is important to identify alternative solutions which are innovative, cost effective
and gives competitive edge w.r.t competitors. Many products undergo various technological changes
thus resulting in minor or major modification in related coordination equipment. Hence it is important
to choose the right product that fits into system with minimum cost impact and maximum technical

advantage.
Risk associated to inadequacy of skill manpower (technical competence, Process expertise): This is
also most common risk identified in developing countries wherein skill set of manpower under work is
not adequate resulting in mishandling of product or process.This risk can be mitigated by categorizing
the product or process based on criticality and check the skill set of manpower involved and ensure to
provide proper training prior to start of work. In case of products with new technologies, the training
has to be provided by OEM and ensure the OEM personnel involvement at all stages of work at site to
ensure correct product installation.
Methods to aggregate the overall technical risks
The highest technical risk assessment drives the overall technical risk for the project. This is
often the case for projects requiring extensive integration and in which the integration risk is the
highest risk.
Identify the technical risks that are core to the system and aggregate the risks across those
components (noting that the TRA is not an exhaustive list of all technical risks in that many
LOW risks may not be recorded).
Some projects are a loose collection of components. Instead of an overall technical risk, a better
approach is to identify the technical risks of the 2-3 major components.
Risk Mitigation:
A project manager can mitigate risks by classifying them based on the priority or level of the threat to
the projects success. Once classified as high, medium, or low, the concerned project manager will be
able to devote time based on the classification and eliminate the risks in a sequential or in a random
manner. Also technical risks should be identified or asked to be identified by the company by
foreseeing the technical enhancements in the Technological market. Constant training should be given
to the resources based upon the field they are working. Also requirements should be gathered by the
Project Manger / Organization well ahead of the project, or else this will be a hindrance if a new task is
given which might be out of our technical competency. We need to check the logistical challenges if
any to get all the required equipment's to the project site. Integration between different sections of the
projects should be handled carefully and should be planed so that there is minimal inter-dependency
between the two sections.
The key issue for senior decision makers is what to do about the technical risks, with particular focus
on the HIGH and MEDIUM technical risks. Risk mitigation strategies should be developed at least for
each of the HIGH and MEDIUM technical risks. There may be some risks that cannot be mitigated
because the development program is outside Australias control. For these risks, we need to outline how
we would manage the risk, for example, putting a technical liaison officer into the overseas
development areas. CDS is particularly interested in a statement of the confidence that DSTO has that
these risk mitigation strategies will transform one risk to another risk (which is then assessed as having
a lower risk).The risk mitigation and risk management strategies will need to be transferred to the
Project S&T Plan with appropriate costing and resourcing data to enable senior defence committees to
make decisions about which risk mitigation strategies should be funded. Types of risk mitigation DSTO
may get involved in include:
Providing early confirmation of (probable) failure of the approach, sufficient to allow an
alternative to be adopted.
Provide a technical alternative to the original solution with lower risk (risk transformation).
The monitoring of project documentation to provide (early) alert to the project if there is

evidence that a risk may be instantiating even if it is not declared by the suppliers.
Monitoring for previously undiscovered risks;
Determination that the likelihood of a risk should be lower than previously assessed.

Risk Response :Risk Response generally includes:

Avoidance -eliminating a specific threat, usually by eliminating the cause.
Mitigation -reducing the expected monetary value of a risk event by reducing the probability of
occurrence.
Acceptance -accepting the consequences of the risk. This is often accomplished by developing a
contingency plan to execute should the risk event occur.
Why do Risk Management?
The purpose of risk management is to:

Identify possible risks.

Reduce or allocate risks.
Provide a rational basis for better decision making in regards to all risks.
Plan.

Assessing and managing risks is the best weapon you have against project catastrophes. By evaluating
your plan for potential problems and developing strategies to address them, you'll improve your
chances of a successful, if not perfect, project.
Various sources of risk include:
Project Management
Top management not recognizing this activity as a project
Too many projects going on at one time
Impossible schedule commitments
Problems with team members.
Poor control of customer changes
Poor understanding of the project manager's job
Wrong person assigned as project manager
No integrated planning and control
Organization's resources are overcommitted
Unrealistic planning and scheduling
No project cost accounting ability
Conflicting project priorities
Poorly organized project office
External
Unpredictable
Unforeseen regulatory requirements
Natural disasters
Vandalism, sabotage or unpredicted side effects

 Predictable
Market or operational risk
Social
Environmental
Inflation
Currency rate fluctuations
Media
Technical
Technology changes
Risks stemming from design process
Legal
Violating trade marks and licenses
Sued for breach of contract
Labour or workplace problem
Litigation due to tort law
Legislation
Technical risk associated with TPL and its mitigation
Identification of Technical Risk
As we are associated with Transmission and Distribution Business Unit , I would emphasis on the
technical risk associated with this segment.
1) Tower Design: - As we are EPC company , we are involved into Engineering design of the
transmission towers. However sometimes , as per client requirement and cost constraint design needs to
be change accordingly.
Recently we have executed Releaince project in Kullu , as per earlier data this year heavy snow fall
happened , which was unpredicted and it caused to damage towers. As per this snow fall volume ,
tower design has to be changed .
Mitigation :- In this point of view and we learnt from such situation , we have proposed design of snow
zone area with grade C material .Hence earlier tolerance limit was less , we have increased the
tolerance and modified the testing under heavy snow circumstances.
2) Cost due to design :- In many overseas project , we have quoted very high price due to our not
optimized tower design .
It has been also technical issue, we faced.
3) Construction fault: - Sometimes during execution of project, site people interpret wrongly and
construct wrong, which led to cost in re-work.
4) Wrong Survey :- Many time surveyor has located the tower at wrong position , which is major
cause of technical risk.

Mitigation :- Proper planning and designing .