Procurement of something that is not yet fully completed, is of course more complex and associated with greater uncertainty than procurement of off-the-shelf goods and services.
Risk management helps to create a good balance between the risks and benefits associated with a public procurement of innovation. Risk management in this context must therefore be understood as managing risks in relation to benefits. Risk should not merely be assessed in relation to the likelihood of it occurring and the consequences of its occurrence, but also in relation to the benefits of the procurement for the various parties involved.
Risk management means that you are ahead of the challenges and can take pro-active steps to address them.
The guide “Risk management in public procurement of innovation" is a practical tool to handle and manage risk, giving you tips om whem to implement and follow up risk assessment, examples of types of risks and measures om how to meet risks. The approach to procurement of innovation is broad, and the guide is based on both innovation in procurement practices as well as in the solutions sought.
When it comes to the risk management method, the guide is based on standard risk management methodology, and it is combined with the procurement process.
The risk method consists of 5 elements: starting with the identification of objectives and critical success factors, then you identify risks, assess and prioritize the risks, establish measures and the follow up of the risks and measures.
Typical risks are that needs are not linked to the organization’s long term strategy and/or the users’ needs are not sufficiently well defined.
Measures to meet he risks are e.g. to establish routines to always check the need against long term plans, or arrange workshops for users to uncover real needs.
This is one of the tools in the guide – the risk matrix – used to assess the identified risks according to likelihood of occurrence and consequence(s) if I occurs. The guide gives you example model for assessing and ranking risk and criteria for consequences.
The guide also shows a tool for measures – the measure matrix. By using the method for risk management in the various phases of the procurement, one has a tool for managing the risks in the different steps of the procurement process.