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Project Risk
Phyllis Brown CPMGT/300: Project Management9/1/2021
Sarah Pedersen
Risk Response Plan
The essential purpose of developing the risk response plan in the project is to discover the potential options and actions available to the project team; this helps increase opportunities and reducing threats related to the project objectives (Firmenich, 2017). The risk response plan will ensure clear roles and responsibilities to all the project team members concerning the project risk to achieve the required outcomes. Crispim, Silva, & Rego (2018) advocate that the risk response plan ensures the delivery of a similar or uniform response towards the potential risks to achieve the targeted amount of success.
Risk Owner and his role
The risk owner is the individual involved with the project responsible for regularly monitoring the risks existing in the project. He or she owner also ensures that appropriate actions are taken in a timely fashion against the potential risks; for this reason, the risk owner uses a suitable risk response strategy. Khameneh, Taheri, & Ershadi (2016), appreciating the role of risk owner, describes that he or she looks after the project progression, ensuring the project's direction so that targeted objectives could be achieved successfully. According to Firmenich (2017), the risk owner is also responsible for exploiting the potential opportunities emerging during the project and mitigating the risks to maximize the project's success. He or she is required to allocate the resources in an excellent way to manage the project risks that could potentially create financial implications for the project and the organization.
Appointment of owning the Project Risk
The risk owner is the central individual identifying and managing the potential risks existing in the project. Crispim, Silva, & Rego (2018) recommend appointing an individual as a risk owner for the job done. For instance, if the risk exists in the financial area, it is wise to assign the role to an individual from the finance department who will take ownership of the risk without any hesitation due to familiarity with the departmental operations. It means that all the functional heads will act as risk owners in the Skills-Based Software Implementation Project (Khameneh, Taheri, & Ershadi, 2016). However, the project manager plays the role of the critical audience. In such a case, gaining progress reviews, updates, and feedback from all the risk owners helps them ensure that the risks are being managed positively and the chances of success are high.
Assessing and Dealing with the Risks
The project manager in the Skills-Based Software Implementation Project will use evaluation criteria to assess and manage the risks. According to Liu, Meng, & Fellows (2015), the project manager must use the likelihood and impact of the risk to evaluate the same in the project context. The project manager should use different responses or strategies for managing the project risks based on the results. Khameneh, Taheri, & Ershadi (2016), agreeing to the statement, informs that five key options are available to the project manager in this regard, including Reduce, Avoid, Mitigate, Transfer, and Accept. The project manager can use any of these responses as per the risk nature to exploit the potential opportunities and minimize the potential threat existing in the project, increasing the chances of success.
Most Common Areas of Project Risk
There are multiple areas within the project where risks occur frequently. Some of the critical areas in this regard include;
Schedule Risks: All the risks affecting the time progression of the project.
Cost Risks: All the risks causing the increased cost or financial implications for the project to succeed.
Quality Risks: All the risks affecting the quality of the final deliverable of the project
Human resources risks: all the risks affecting the project team members' collaboration, coordination, or motivation.
External Risks: All the risks existing in the project that are not in the project team's control.
Type of Risks Existing in Each Area
Multiple risks are existing in each area defined above as follow:
Schedule Risks:
The project is expected to be completed after the scheduled time.
The project progress does not comply positively with the critical path.
Cost Risks:
The spending on a particular project activity is relatively high compared to the budgeted amount (Liu, Meng, & Fellows, 2015).
The overall project delivery cost is exceeding the budgeted amount.
Quality Risks:
The quality specifications of the final deliverable do not meet the customers' requirements.
Quality constraints exist in the project deliverables.
Human resources Risks:
The turnover of the employees from the project is relatively high.
There is a lack of coordination or collaboration between the project team members (Willumsen et al., 2019).
External Risks:
Natural disasters carry the potential to affect the project's progress (Crispim, Silva, & Rego, 2018).
Imposition of lockdown condition by the government due to pandemic affecting the project progression
Risks existing in Skills Based Software Implementation Project
Multiple risks were present in the Week 2 Project. The below list provides information about their handling and more effective management.
Cost Risk: The overall project cost exceeds the allocated amount of $2000. The project risk was managed by keeping an eye on the project spending. However, it would have been managed effectively by using the Bottom-up budgeting technique through which the project manager would have allocated and managed a precise amount for each project activity to achieve the targeted objectives (Willumsen et al., 2019).
HR Risk: Due to the involvement of multiple individuals in the project like the Learning & Development team, Technicians, Area Service Managers, and ineffective coordination, issues were undoubtedly present. It was handled by allocating clear roles and responsibilities to all the team members at the beginning, focusing on their targeted objectives (Crispim, Silva, & Rego, 2018). It would have been better to use a Communication Management Plan in this regard to ensure regular communication among the team members to achieve success.
Scope Risk: The project mainly focused on data migration; however, the scope creep risk existed in the project. It was handled by using a project charter. However, the risk management would have been improved with the use of the Change Management Strategy.
Conclusion
The essential purpose of developing the risk response plan in the project is to discover the potential options and actions available to the project team; this increases opportunities and reduces threats related to the project objectives. The risk owner is the individual within the project responsible for regularly monitoring the risks present in the project. He or she must be selected from the relevant section as per the risk area. Multiple risks in the area of cost, time, quality, human resources, etc., are present in the project, and it is necessary to manage them positively to avoid their adverse impact on the project.
References
Crispim, J., Silva, L. H., & Rego, N. (2018). Project risk management practices: the organizational maturity influence. International Journal of Managing Projects in Business. https://doi.org/10.1108/ijmpb-10-2017-0122
Firmenich, J. (2017). Customisable framework for project risk management. Construction Innovation, 17(1), 68–89. https://doi.org/10.1108/ci-04-2015-0022
Khameneh, A.-H., Taheri, A., & Ershadi, M. (2016). Offering a Framework for Evaluating the Performance of Project Risk Management System. Procedia - Social and Behavioral Sciences, 226, 82–90. https://doi.org/10.1016/j.sbspro.2016.06.165
Liu, J., Meng, F., & Fellows, R. (2015). An exploratory study of understanding project risk management from the perspective of national culture. International Journal of Project Management, 33(3), 564–575. https://doi.org/10.1016/j.ijproman.2014.08.004
Willumsen, P., Oehmen, J., Stingl, V., & Geraldi, J. (2019). Value creation through project risk management. International Journal of Project Management, 37(5). https://doi.org/10.1016/j.ijproman.2019.01.007
