N29071 Risk Management : Accomplishing Management of Project Risks

What is risk management
What are the methods
Which one is closer to reality
Case study what happened
What they should have do
Gap between theory and practical study
What should do to fix that gap

Planning and Strategy.

Planning and strategy activities provide set foundations that allow management of risk programs with an ultimate determination whether the project would be a success. In planning and strategy phase, an organization has to define how the project risks would be managed and addressed. Planning and strategy should be made while considering (Burtonshaw-Gunn, 2009);

• The enterprise-wide or corporate risk in management guidelines.
• The available resources.
• Preferred communication and reporting protocols.
• The strategic objectives of the organization.

Planning and strategizing involves the following;

• Roles and responsibility assigning that relate to the activities managing risks. Also, there is the identification and defining of stakeholder project requirements about the activities leading to risk management.
• Establishment of common categories of risks of the determined risks. These categories can be based on the organization’s risk category r the common risks in industries(Lock, 2016).
• Development of risk matrix and assignment of risk ratings that identify risks.

Risk identification involves the determination of risks that may be positive or negative to the project in place. The process of identifying risk has to include internal and external impact consideration. Contributors to the identification of risk are such as (Bodea, 2016);

• Team project members.
• Members of the risk management team.
• End user.
• Subject professional.
• Organization management.

A success in capturing the risks in projects increases with regular communication together with feedback from the members of the team and the stakeholders. The discussions in this method help in identification of inconsistencies, inaccuracies, and assumptions within the project. From this analysis, there will be a list of risks that have been identified.

The list that has been produced will have to be slotted as a log or risk register, this will ensure proper analysis, monitoring, and prioritization. The register has to include (Artto & Kahkonen, 2013);

• Type of risk.
• Impact of cost.
• Action owner.
• Level of risk.
• Possible responses.

The phase of analysis provides a determination of impact and likelihood of every determined project risk with priorities being made. A successful analysis of risks requires objective input and thinking from the individuals familiar and being affected in those areas. Two steps are involved in the analysis (Raydugin & Yuri, 2016);

The team project makes an assigned level of priority in each determined risk. The level of priority is made to align with the organization’s plan for managing the risk, tolerance level of the risk and another objective of the organization. The level of priority is used in racking the risks in the register and coming up with efficient plans that focus attention on highly prioritized risks (Samant, 2016).

The value of cot for every risk identified is determined. The value is hen considered during probability of occurrence of risk and the potential of the risk. The determination of impact and probability of the risks is possible by use of decision trees, interviews and model simulations.

In this method, the response actions are developed with alternative options that can reduce the risks in the project at hand. Before the occurrence of risks, the team in the project will have to develop ways of addressing probable risks, transfer them, accept or mitigate them in relation to the risks in the project. During planning, the team will have to use available potential repercussions and resources to the response plans. He risks are the aligned with the appropriate method of responding determined by the severity, cost, feasibility and tie considerations.

The project team can track probable risks making observations that are important in implementing the risk plans with evaluation of management risk effectiveness. Throughout the project, control and monitoring should be there ensuring management of risks (Zhao, et al., 2015).

Case Study

Construction of medical office building

There was a need to make utility system connections involving gas and electricity for the medical office building to be commissioned once it was complete. As the project went on, the project team missed getting a commitment from the company providing utility services for the date of completing the connection. He risks concerning such occurrence was not communicated beyond the team involved in the project completion. Laos, there lacked analysis the effect of delay or provision of the alternative plan that could solve the problem or address the risk probability.

Eventually, the risk happened. The result was the need to come up with generators that could power the building temporarily. This led to a general increased contractor’s condition with several months being added on to ensure that the project was completed.

Practical Solution

Having in mind that the risk was well known to the organization and project team, the occurrence of the risk might have been mitigated or avoided in case the process of risk management was put in place. A pre-existing risk management might have enabled the project team and the organization in charge track, plan, quantify and communicate the occurrence of risks during the implementation of the project with the involved personnel having the capacity to avoid any risk or mitigate them (Chapman, 2014).

Theoretical solution.

The project team members ought to be well trained in the field to make proper judgments to allow determination of the probable risk occurrence. The training effort of the team was poor and needed new hires to realize the project completion. Also, in case the organization failed to hire new project team, the awareness of the team was to be refreshed making them identify and manage risk procedure and policies. This might have been a crucial solution that may have established an efficient approach to managing the risk. Hence, the employees ought to have known the importance of managing risks together with its elements (Stapp & Longenecker, 2016).

Practical and Theoretical Gap

A comparison between practical and theoretical application brings about the necessity of adjustment or improvisation. This improvisation is a necessity by the organization setting up any project to avoid increased expense incurred for restarting the same project if minor adjustments can be done. One example is this case study that differs in practical and theoretical solution to the problem. The solution to bridging this gap is the application of field experience with stipulated risk management skills to produce an infused technique that is economical and efficient.

 Conclusion:

Processes in risk management that are well defined ensure their successful completion. However, there has been an overlook on risk management in that it is a fuzzy area in project management. Minimum levels entail major capital expenditures making the master of communication, proper personnel training and project monitoring important in project management (Obicci & Adoko, 2017).

References:

Artto, K. & Kahkonen, K., 2013. Managing Risks in Projects. 1 ed. Liverpool: Routledge.

Bodea, C.-N., 2016. Managing Project Risks for Competitive Advantage in Changing Business Environments. 1 ed. Bristol: IGI Global.

Burtonshaw-Gunn, A., 2009. Risk and Financial Management in Construction. illustrated ed. Bath: Gower Publishing, Ltd.

Chapman, J., 2014. The Rules of Project Risk Management: Implementation Guidelines for Major Projects. Illustrated ed. Ripon: Gower Publishing, Ltd.

Lock, D., 2016. Project Management in Construction. reprinted. Brighton & Hove: CRC Press.

Obicci & Adoko, P., 2017. Risk Management Strategies in Public-Private Partnerships. 1 ed. Inverness: IGI Global.

Pica, M., 2015. Project Life Cycle Economics: Cost Estimation, Management and Effectiveness in Construction Projects. illustrated ed. Aberdeen: Ashgate Publishing, Ltd.

The project, M. I., 2016. Construction Extension to the PMBOK® Guide. 1 ed. Aberdeen: Project Management Institute.

Raydugin & Yuri, 2016. Handbook of Research on Leveraging Risk and Uncertainties for Effective Project Management. 1 ed. Liverpool: IGI Global.

Samant, M., 2016. Computer Support for Successful Project Management: Using MS Project 2016 With Construction Projects. 1 ed. Glasgow(: Business Expert Press.

Stapp, D. & Longenecker, J., 2016. Avoiding Archaeological Disasters: Risk Management for Heritage Professionals. reprinted. Sheffield: Routledge.

Zhao, X., Hwang, B. & Pheng, S., 2015. Enterprise Risk Management in International Construction Operations. illustrated ed. Wells: Springer.