Developed by Ignasi Girones Cadiz
In the business world finding an opportunity at the right time might be the key to success. In the project management, an opportunity is an unexpected situation that will improve the quality of the project or the revenue, therefore, it is a key activity in the management level to be proactive and look constantly for opportunities. Opportunities might come from different ways and it is a manager's task to allocate and distribute resources into new targets . As described in the "Managing Successful Programes" book: "Every Opportunity to advance the program towards its goals should be welcomed and converted into constructive progress."
For this case, an opportunity is considered a positive outcome of a project, program or portfolio development considering its uniqueness and attractiveness to customers. The purpose of the opportunity is to bring more value to the project by improving it. In the business world, an opportunity means something that helps you to "stand out from the crowd". In the project management sector, the idea is the same but usually there is no crowd. It is how to improve a project so it gives either better results or more profit.
This article is about the methodology of finding opportunities within the engineering/energy market. Project opportunities management is a set of techniques and tools to help a risk manager to identify and understand possible improvements to the project objectives . In following sections it will be explained more precisely what an opportunity is and what types of opportunities can be found in the project management sector. Then, the reasons why opportunities are often dismissed and finally, how to proceed when an opportunity appears with some examples.
Opportunities as Risks
Both opportunities and risks are included in the term uncertainties. The term uncertainty is defined as: "an unintelligible expression without a straightforward description" . In the project management sector, this means that a situation might affect either in a positive or negative way. Generally, uncertainty has negative connotation due to the fact that contractors, project managers and authorities intend always to have everything clear and to control all the factors that might affect a project. Several authors claim that opportunities should be dealt same way as risks with the same processes, thus, it is suggested than an opportunity is a positive risk.
Following the action and reaction principle, an opportunity produces a threat and a threat produces an opportunity. The aim of the risk managers is to find the opportunity in a risk. In recent studies, it is shown that most risk managers focus much more their efforts in identifying and mitigating risks rather than in finding opportunities. That is the reason why opportunities are left often un-exploited, not because they were dismissed, but because they remained unseen during the period of potential discovery. This issue gets bigger in large projects, when, even identifying the opportunity, the difficulty that generates to convince the stakeholders, change the project and therefore change contracts makes it unworthy. Definition of opportunities as positive risks
Types of Opportunities
According to different authors , opportunities can be classified according to for whom they are and in which level they are. That is the reason why what can be an opportunity for some group of people, it might be a threat for another.
These are the lowest in a project scale and usually affect only the project, they affect the operation and daily activities of a project. These are the easiest to find and take advantage because they barely produce any risk or the risk is easily visible and avoidable. An example of these opportunities may be a variation of working plan. By re-arranging working schedules productivity can be improved. It is a task of project team and lower managers to identify them and apply them.
Strategic opportunities might affect not only a project but also a whole program. They usually have to be more with business and finance rather than project management due to the fact that most times they are related to industry forces. A good analysis of the market, business models, key trends and direction of the market is crucial in order to identify them. An example of these opportunities for project management might be the apparition of new machinery or IT software that can change the actual standards. On the other hand, it can be considered a threat if by not implementing those changes because the program might become obsolete etc. It is task of the project managers to identify them and implement changes downwards. Since these opportunities imply more than one change, these are often dismissed as the number of changes might be higher enough to consider the opportunity not worth it.
These are the highest opportunities and the ones that might affect a whole portfolio. They affect organizations as a whole and entire groups of stakeholders might be in favor or against taking it. An example would be the merge of two different portfolios to save production costs. They are controlled by the top managers of an organization and they are not easy to perform as they include several risks related. There might be the case where whole programs are affected by an opportunity, this is the case of entrepreneurial programes 
Opportunities according to the benefit
This section is the most important as it the quantification of an opportunity. It is divided into different kinds of benefits. The context and the situation of the project will dictamine which is the most important at each case.
Opportunities in terms of cost
The changes if implemented may give result in form of economic savings. As discussed in further sections, lower economical value gives attractiveness to the project if the quality is maintained. The opportunity cost is difficult to apply correctly as project managers do not really understand what is a relevant cost . In project management, cost is not everything, however, at first, it is difficult to estimate the value of an opportunity. Costs might be either explicit or implicit, which means that they can be tangible at first or not. In economics, opportunity cost is defined as revenue of the most lucrative option minus return of chosen option. . In project management, this is a way of quantifying the revenue of an opportunity. Moreover to this, the opportunity needs to be compared in other terms and then observe whether is worthy or not.
Opportunities in terms of time
"Time is gold" In this case, finishing a project before the deadline is always an incentive to pursue an opportunity, specially if there are some delays and the deadline cannot be postponed, e.g. Olympic Games. A project manager has always in mind how to run on time or faster than the scheduled and when finding an opportunity, will always look at the milestones, specially if the project has a deadline. This affects mostly the construction part of a project, where all expenses are located. This goes hand in hand with the risk of delay. Same as among all projects there are risks of delay in the delivery, some opportunities may be considered in order to gain time.
Opportunities in terms of quality
This term is very broad and includes many topics not discussed in this article. Some authors classify quality as conformance to requirements (Crosby,1992) or fitness for use (Juran,1989). Following the norm ISO 9000;2000, quality is '‘the totality of characteristics of an entity that bear on its ability to satisfy stated and implied need’'. This kind of opportunities are found out by project quality managers, who look after that a project satisfies the needs for what was designed according to design quality (satisfy needs) and process quality (availability to the customer). The level of affection is not that important as the intention is that improves the overall quality. Some examples according to  are: safety and risks, stakeholder management, teamwork or project deliverables. Those examples have to be measurable according to physical appearance, responsiveness, availability, pleasantness and timeliness. Definitions of project quality.
In theory, opportunities are to be always taken, however, in practice, projects and project managers fail to identify them and take use of them. Project analysis show that the number of found threats is between eight to ten times higher than the number of found opportunities . The reason of this, is because brainstorm usually focus more on how mitigate the risks and threats rather than in finding opportunities. This is due because every opportunity might come with more risks to mitigate and the present situation is assumed "favorable". There are several factors that lead to the rejection of a visualized opportunity. Following sections explain the most common ones:
Missing opportunities due to stakeholders
Not taking profit of a localized opportunity might be due stakeholder's conflict. Specially, in larger projects, when there are more stakeholders, finding common solutions that do not prejudice others might be a big challenge. In order to find common solutions for everyone, the terms of value and benefit described by  should be explained. Value is referred to economical profit whereas benefit includes non-economical rewards. This takes into account the socio-economic analysis and private economic. A project can be beneficial but not valuable. In order to consider an opportunity, it is to be set in advance the possible value and benefit of the opportunity. What makes it even more difficult is that for what some might be a beneficial alternative, for others might be a threat or a non beneficial. When changing a project, program or portfolio, all parts need to agree. There are three groups of stakeholders to be taken into account during a project: Contractor, client and users. Each of them have different interests that might differ and contradict from the others. The image below shows the relation influence/interest. Both the client and contractor are in the highest position whereas the users are usually in high interest low influence.
Stakeholder interest and influence.
The contractor is usually a private organization which primary interest is being profitable in economical terms. Due to this, the contractor will look for a beneficial opportunity. In order to find potential opportunities, the contractor will try to find its own risks. The most common ones in construction projects are: seasonal slowness, equipment damage, injuries, faulty work and missed deadlines  Since opportunities are the risk's other side of the coin. A contractor will try to avoid those risks with opportunities. To name some examples, the following table sums the most typical risks and an opportunity to mitigate them
|Typical Risk||Possible opportunity|
|Season slowness||Try to find either a way of constructing not depending on climate adversities.|
|Equipment damage||Buy more reliable equipment when updating or insurances that cover costs|
|Injuries||Update health and safety plans|
|Faulty work||More quality controls|
|Missed deadlines||Update project when an unexpected situation comes that allows to cut time|
The one who finds the main need or opportunity that leads to the creation of the project. Its aims are most times both beneficial and valuable, therefore sometimes it is difficult to agree even within the client organization whether an opportunity is profitable or not.. In larger organizational clients, where there are more groups of stakeholders involved, the problem goes even more severe as there might not be guidelines for some opportunities. An entrepreneur view is also important in order to find opportunities and to visualize them. in order to not miss any opportunity, the client has to keep a clear imagine of their needs and if the opportunity improves the expected results in any way.
Although having from little to none to say in the opportunity management, has a high concern on both benefit and valuable. Its main purpose when an opportunity is visualized, is to convince either the contractor or the client and make them participle of that. This way the opportunity is more doable.
The table below shows some typical examples that show the struggle when an opportunity appears. What might be good for a group of stakeholders, is a risk for others. The influence vs importance of stakeholders usually tells whether a opportunity is selected or not.
|Opportunity||Risk related||Stakeholders in favor||Stakeholders against||Potential benefits||Decision|
|New software that optimizes performance and working schedule during construction||It is expensive and might be a challenge to re-arrange working schedule||Client because contratist might deliver project earlier||worker organizations as some workers might be fired||If implemented on time, savings in terms of time and money||Purchase the software and use for future projects as the payback time is expected to be short|
|Inclusion of trees in the sides of a road||Deliver time might be increased||Users||Client as the costs will be sufragad by it and trees require maintainence.||Nicer road and noise reduction to the neighboors||Implementation|
|Reducing the number of seats in a stadium in construction.||Less income for the owner as the number of spectators is reduced||Project owner and client||Users as new tickets might be more expensive||Stadium finished earlier at a cheaper prize||Rejection as the main reason to construct a new stadium was the gauging.|
Steps to follow
In order to take advantage of an opportunity, there are four steps to be followed: Identify, analyze, plan and manage. This steps are carried out by different people according to in which level the opportunity is.
A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty. – Winston Churchill.
The most difficult step to achieve, as explained earlier, project managers are not able to manage risks and opportunities because whatever that can be manageable is not a risk . In order to identify opportunities, managers should have perfectly known current situation of both the project and external factors that produce risks or opportunities. The methodology is the same as for a risk, one must look with entrepreneur mentality the trends, political situation or legislation. Brainstorm is often performed to obtain proper results. Usually, this process is only done when there is a crisis and a way of success needs to be found, however, it is agreed that a more entrepreneur view should be put into practice on the daily life activities.
If you know yourself, but not the enemy, for every victory gained, you'll also suffer a defeat. -Sun Tzu.
Once identified the opportunity, it is time to analyze it and quantify the gains. What profit would it give? What are the associated risks? How much is going to cost? In this step it is established whether an opportunity is feasible or not. It is carried out by the adecuad team at the adecuad step as not all opportunities are the same (see types of opportunities). The correspondent team has to do a whole analysis of the opportunity, inform the stakeholders and carry out measures to approve or reject the idea. It is important to perform a good analysis because a non properly justified changes due to an opportunity, might end up being a threat.
A goal without a plan is just a wish,-Antoine de Saint-Exupéry
Once analyzed and estimated the outcome of an opportunity, it has to be planned how to achieve the goals selected. A set of activities with all possibilities included to achieve the goal and minimizing the risks. This activity is carried out by project managers who will implement the desired opportunity within the project. In this stage, the opportunity needs to be integrated and the project managers need to adapt the opportunity to the existing project.
Business is all about risk taking and managing uncertainties and turbulence.-Gautam Adani
Support staff in order that they are willing to achieve success. During this stage, they take actions to reduce risks or threats and to add simplicity to the task. During this activity, several "ad-hoc" tasks might appear as an opportunity is something uncertain. In this stage, the opportunity has already been implemented in the project and needs to be implemented equally as all previously existing activities.
Opportunities are considered as risks by many authors and project managers, together they are included within the term uncertainties. Following the action and reaction principle, every opportunity generates a risk as for every opportunity, there needs to be created a modification of the already existing project, program or portfolio which leads to unknown situations. Opportunity is considered a positive risk that might bring extra profit to the expected outcome. This extra profit might be quantified in terms of value (economical profit) or benefit (non economical). The difficulty at the moment of exploiting opportunities come when there are stakeholders' crossed interests. What might be an opportunity for one group, might be a risk for other. In order to take profit of more opportunities, there needs to be more collaboration and agreements between stakeholders so the overall result is beneficial for all. The principles to take profit of an opportunity are: first identify it, which might be the hardest if project or risk managers do not have an entrepreneur mentality. Second, analyze it, find out risks related and quantify the profit. Third, plan it, establish precisely guidelines to integrate the opportunity in the existing project, program or portfolio. Forth and last, manage the changes and the uncertainty. Risk managers play a special role, as they have to find the related risks at every stage and find potential solutions.
- ↑ Unkown, entrepreneur.com, (How to research a business oportunity), https://www.entrepreneur.com/article/42940.
- ↑ 2.0 2.1 Stacy A. Goff, IPMA USA, Revisiting Risks: Threats and Opportunities in Complex Projects.
- ↑ Eric McConnell, My management guide,Defining Threats And Taking Opportunities By Risk Management Strategy.
- ↑ 4.0 4.1 4.2 4.3 Agnar Johansen, Petter Eik-Andresen, Andreas Dypvik Landmark, Anandasivakumar Ekambaram and Asbjørn Rolstadås, Administrative Sciences,Value of Uncertainty: The Lost Opportunities in Large Projects.
- ↑ Ricardo Antunes and Vicente Gonzalez, buildings, (A Production Model for Construction: A Theoretical Framework), http://www.mdpi.com/2075-5309/5/1/209
- ↑ PMBoK, A. Guide to the Project Management Body of Knowledge; Project Management Institute: Philadelphia,PA, USA, 2000.
- ↑ Mounir Ajam, How to Manage Risks on Projects?, Project Management Realizing Innovation, http://blog.sukad.com/how-to-manage-risks-on-projects/
- ↑ 8.0 8.1 Program Management: "Managing Successful Programes“.
- ↑ Robert H. Frank, The opportunity cost of economics education, The New York Times, http://www.nytimes.com/2005/09/01/business/the-opportunity-cost-of-economics-education.html
- ↑ Annonymous, Opportunity cost, Investopedia, https://www.investopedia.com/terms/o/opportunitycost.asp
- ↑ 11.0 11.1 Ron Basu, The Definition and Dimensions of Project Quality, gpm first,http://www.gpmfirst.com/books/managing-quality-projects/definition-and-dimensions-project-quality
- ↑ Rolstadås, A.; Hetland, P.W.; Jergeas, G.F.; Westney, R.E. A new approach to project risk navigation. In Risk Navigation Strategies for Major Capital Projects—Beyond the Myth of Predictability; Springer-Verlag London Limited: Location, UK, 2011; pp. 39–50.
- ↑ Carlos Serra, projectizing.co.uk,Stakeholders Analysis: Power/Influence-Interest Matrix.
- ↑ insureon, construction.insureon.com,Top 5 Risks for Contractors, Builders & Other Construction Professionals, https://construction.insureon.com/resources/sturdy/top-risks.
- ↑ Rosabeth Moss Kanter, Harvard business review, How Great Companies Think Differently, https://hbr.org/2011/11/how-great-companies-think-differently
1) Agnar Johansen, Petter Eik-Andresen, Andreas Dypvik Landmark, Anandasivakumar Ekambaram and Asbjørn Rolstadås, Administrative Sciences,Value of Uncertainty: The Lost Opportunities in Large Projects. Very good article that gives a good overview of opportunities in large projects. Explains why most opportunities are discarded focusing on big engineering projects. It gives extra importance to the stakeholders analysis.
2) Stacy A. Goff, IPMA USA, Revisiting Risks: Threats and Opportunities in Complex Projects. Gives an overview of opportunities as risks. It tells that opportunities should be treated equally as risks and gives good comparisons and analysis of risk.
3) Eric McConnell, My management guide,Defining Threats And Taking Opportunities By Risk Management Strategy. This article also takes the idea of opportunities as risks and how to manage uncertainty.
4) Carlos Serra, projectizing.co.uk,Stakeholders Analysis: Power/Influence-Interest Matrix. This article explains well why stakeholders are so important in the opportunity management and why there are crossed interests.