The Opportunity Nobody Costed
A construction project is installing a district heating network. During risk review, the team identifies an opportunity: the ground conditions on phase 2 are better than assumed, so the piling scope could be reduced by an estimated £600k. The opportunity requires a design change and a variation to the contractor's scope, which would take six weeks to agree. The project has a £400k risk contingency and a change-control process that treats all changes as threats - every variation is scrutinised for cost increase, and there is no route for a change that reduces cost. The project manager notes that pursuing the opportunity would consume design resource already committed to phase 3, and that if the variation is not agreed before the phase 2 start date, the piling will proceed as originally scoped. The register records the opportunity as 'identified, not pursued'.
1. Analyse why this opportunity is likely to be lost, referring to the project's processes and the treatment of opportunity in the register.
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The opportunity is being lost to process, not to economics. Five factors:
No route to pursue it. Change control is built to scrutinise cost increases. A cost-reducing variation has no fast path, so it must run the same six-week process designed to challenge it. The process is asymmetric.
A hard deadline with no owner. If the variation is not agreed before the phase 2 start, the piling proceeds as scoped and the £600k is gone. The register entry 'identified, not pursued' has no owner, no action, and no date - it is a record of an opportunity, not management of one.
Competing resource. The design resource needed is committed to phase 3. Pursuing the opportunity requires an explicit trade-off decision, and nobody has been asked to make it.
Contingency framing. The £400k contingency is framed entirely as threat cover. There is no corresponding 'opportunity allowance' or incentive, so nobody is rewarded for capturing the £600k.
Register semantics. Labelling it 'not pursued' closes the item without a decision. A live opportunity should carry an owner, an action, and a review date until it is either captured or consciously rejected.
2. Recommend how the project should manage this opportunity and what changes would make future opportunities more likely to be captured.
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For this opportunity
- Assign a named owner immediately and set the decision date at least six weeks before phase 2 start (the variation lead time).
- Escalate the design-resource conflict to the project board as a trade-off decision: phase 3 design delay versus a £600k saving. Put a value on the delay so the trade-off is explicit.
- Run a fast-track variation route for cost-reducing changes - a lighter approval with the same audit trail.
- Record the expected value (probability the ground conditions hold × £600k, less the design cost) so it competes on merit with threats for management attention.
Structural changes
- Add an opportunity section to the register with the same fields as threats: owner, action, date, expected value.
- Amend change control so reductions have a defined fast path.
- Include opportunity capture in project objectives and in performance reporting, so it is measured.
- Review opportunities at the same cadence as threats, and require a stated reason whenever an opportunity is closed as 'not pursued'.
The test is whether the register can show an opportunity that was captured, with the value realised - not just one that was identified.