Project Risk Management
Projects/contracts are crucial for the Group's business activity being the main sources of income and cash flows and, consequently, also the main sources of business risk. Accordingly, Leonardo-Finmeccanica focused, in particular, on strengthening controls over these risks in the various operating units to increase consistency and, hence, effective management.
An in-depth evaluation of the system used to manage the risks connected to specific projects in the various companies was conducted in 2015, based on an analysis of several procedures and listening to the experience of those involved. This activity led to the update of the Directive, evaluation methodology and metrics (dating back to 2006), and the operational instructions governing project/contract risks, creating a single company framework in line with the highest reference standards.
Specifically, risk management controls were strengthened starting from the offer stage, which is the most critical moment in the correct assessment of the risk impact.
Project/contract risk management stages
In order to increase the consistency of management, monitoring and control of contract risks, an IT tool (TERRA - Tool for Evaluating Risks & Response Actions), common to all Divisions, was implemented. This tool enhances controls over processes, the identification of additional risks and the launching of adequate mitigation actions as quickly as possible and in the most efficient manner.