The concept of risk revolves around possibility of either injury or loss. Project risk thus points to the conditions or events that are uncertain and if were to occur, would have an effect on a project objective, at the very least. To minimize the impact that risk would have on a project requires that risks to the project be identified and assessed well beforehand a process commonly referred to as risk management that concerns itself with risk identification, assessment and management and not necessarily the elimination of risk(Power, 2012). It is generally assumed that projects cannot be free of risk since the number of events that could occur and have a potentially negative impact on a project is infinite(Rabechini-Junior & de-Carvalho, 2013). Since there is sufficient evidence from research that indicate a proportional connection between the success of a project and good risk management it is of great import to integrate risk management in projects and most importantly involve all project team members in the process. This paper seeks to discuss issues that revolve around risk management by reflecting on the role and value of a risk plan, examining the risk management process, and drawing lessons from proper execution of risk management.
Suggest the issues that could have developed had the team not had a risk plan. Determine the major impacts of risk that the team needs to understand in order for the project to be successful.
The project team onsatellite development prepared a risk plan for their high-risk project that featured a criterion for the evaluation of occurrence probability and risk impact, and enabled the prioritization of risks. Had the team not prepared a risk plan they would be looking at failure on performing as a team, failure on meeting project deadlines, failure on project delivery as per stipulated deliverables. Team performance would have been compromised greatly because lack of proper risk planning at the beginning of the project would have meant that the team lacked a unified definition of risks facing the project or a unified process for dealing with the risks. This would mean thateach member of the team would have his or her own divergent ideas on what project risks he or she would be anticipating and their own divergent idea of how to deal with those project risks throughout the project. This would result in a chaotic working environment, setting of unrealistic goals for the project and eventual project failure. Without a unified understanding of what is expected not only individually but also as a team, there would be instances of missed deadlines, various project areas lagging behind and slowing down overall project performance, and unpredictable budget overruns spilling beyond set financial limits. By making a risk plan at the beginning of the project the satellite development team ensured that each member of the team participates in the risk management process where together with other team members they would identify, assess and manage risk from a united front with the entire project performance in mind. The regular risk review meetings by the satellite development team show the essence and need of a unified approach to risk management since ensuring that the team meets and compares notes and makes adjustments to plans the risk plan together significantly reduces the risk of poor communication, uncertain positions, and misconstrued shared facts(Power, 2012).
In light of all the risks presented by the satellite development project such as many unknowns and numerous variables associated with tests, subcontracting, systems integration, and the manufacture of components it is imperative that the team understands their mandate, timelines, and all other known factors thoroughly.It would require that all team members participate in the identification of risks posed in the day-to-day basis and most importantly participate in the process of risk assessment where they would be required to evaluate and make an estimation of the levels of risk presented in each situation. Risk assessment would require that for each of the risks identified the acceptable level of risk would be determined by comparing it with a set of standards and matching it available risk responses tailor-made to the project capabilities and project resources(Rabechini-Junior & de-Carvalho, 2013).
Justify the value of risk plan considering the time, effort, cost, and resources it took to develop such a plan. If you were the project manager, recommend the approach that you would take to ensure the project met the critical path identified.
In managing risk, one of the best strategies involves operating from the known variables towards figuring out the unknown variables and consequently, from the known risks towards identifying and resolving the unknown risks. For instance in the satellite development project, the production timeline was known, the budget was known, and the job descriptions of every team member was known, which allowed them ample time to prepare beforehand and made it possible to handle project risks systematically if and when they occurred. Deriving their known risks from the stipulated project deliverables and project deadlines it was possible to close the gap towards the unknown risks ensuring that with every project risk review, new risks would be defined and their responses determined.
There is great value in developing a risk plan and although the process of creating one means incurring costs associated with the time and financial resources associated with the process, all these costs can be justified. The costs can be sufficiently recovered in the savings that would be made in avoiding budget overruns and in the efficient management of team members’ time in executing clear project mandates. A risk plan that results in efficient risk management eliminates the elements of wasted resources, excessive costs, and extended effort. According to Power (2012), good risk management plans do not focus on eliminating risk, which might be an impossible feat. But instead focuses on providing the right people in a project with the information needed, at the right time empowering them to make the right decisions and executing actions at the most opportune of times.
If I were the project manager keen on ensuring the project met the critical path identified, I would approach the issue of risk management from the point of considering the priority factors of scope constraints, time resources and cost implications and using these as the broad limits of what the project can and cannot do in the mitigation of risks. By safeguarding these broad aspects of risk management, I would be able to make assurances on quality project outcomes, delivered on time and within the allocated budget(Kloppenborg & Nkomo, 2012).
Assess how to determine the level of risk management appropriate for a project
The process of determining the level of risk management calls for a long-term view with considerations being made about the project’s lifecycle and potential changes that may occur over time as the project is implemented. With this understanding, it becomes clear that in the evaluation of risk, it is necessary to develop criteria against which one can assess the probability of occurrence, the likely impact as relates to actions planned, consequent indicators, and tracking system(Power, 2012). Once the known risks have been identified, the risk prioritization step would be critical in the derivation of a ranking order for the most critical and the least critical of the identified risks based on their probability of occurrence and potential impact on the project. Effective allocation of project resources to ensure successful risk management is the driving force behind the process of risk prioritization(Kloppenborg & Nkomo, 2012).
By making use of available quantitative and qualitative techniques designed for assessing and prioritizing risk it is possible carry out this process with much ease and crystal clarity. For instance usingquantitative techniques a team can be involved in developing probability distributions; modelling and simulation; carrying out the expected monetary value analysis; sensitivity analysis; and weighting the cardinal risk assessment of timeframe, probability, and consequence. Using qualitativetechniques, a team can come up with an impact and probability matrix, a risk urgency assessment, a risk frequency ranking, and risk categorization. Different aspects of the project cycle and project nature has differing risks which calls for the application of different of tool and techniques used in the assessment of the identified risks. For instance, projects in enterprise management will often assess the impact of their risks against goals associated with schedule, cost, and technical performance; while the assessment aimed at assessing risk associated with investment options would be best suited to use an approach that focuses on risk area. In the assessment of risk probability and risk impact, the documentation of the rationale or the justification becomes crucial since in the event that those circumstances or conditions change, the significance of the risk changes and the notes and descriptions made can then be used to communicate the shift once the risk assessment is under review(Rabechini-Junior & de-Carvalho, 2013).As project develop and mature, they become significantly interdependent and even more complex than when they began, which points to the necessity of developing a risk management system that can accommodate and tap into the breadth of knowledge required in making judgments with regards to risk assessment.
Periodic risk reviews is a good way to track the changes in the project cycle and to capture precisely how the risks involved morph through the stages either increasing in level or decreasing based on their potential impacts on the project.This kind of feedback loop where team members report on the how risk has evolved in their area of operation and which new risks have emerged in the passage of time helps to sufficiently update the risk management database being used for the project and as such the risk reports become useful in the entire project. From the updated risk reports all the areas of operations in the project implementation and all the teams working in the project can join forces in resolving risks classified as high priority and by examining their risk response strategies for the determined levels of risk, they can become proactive about their continued risk management. Acknowledging the dynamic nature of risk becomes a powerful resource with which the project team can use to reorganize and reposition themselves around the continually morphing risk terrain(Rabechini-Junior & de-Carvalho, 2013). Relevant decision-makers can thus use the feedback from all the team members on risks that either need to be escalated or deescalated in the charts that map out the level of risk management, while taking into account the previously unknown risks as they become know or revealed.
Imagine the team working on the satellite development project was a virtual team in which team members were unable to meet in person. Explain the expected impact on the project and suggest 2 ways the team could maintain its current goal in both planning and execution
The satellite development team met regularly and spent many hours together developing a risk plan and ensuring that they regularly review their risk management strategies using feedback from their risk management tool through which the all members could make changes regarding the morphing risks in their specific areas of operations within the project. This ability to meet regularly played an important role in achieving the level of cohesiveness evident in the team and fostered the effective communication, which is necessary within the risk management process(Ahuja, 2010). Face to face, meetings are rich as they add great value to the communication processes;be that as it may, face to face meeting in person can be very costly in terms of bringing everyone together at the same time especially for meetings that happen at least once a month. If for instance the satellite development team were a team operating virtually, they would have encountered many challenges in trying to organize their initial risk planning meeting and their consequent monthly risk review meetings.
The advancement of technology and the prolific nature that the internet has spread becoming a primary and reliable medium of communication there are numerous programs that have been developed to ensure that communication can be fast, face-to-face, interactive, and quite as effective while remaining cost effective. Through the internet and using newer communication technologies, people can have meetings online using video conferencing platforms such as Skype where everyone can log on form their respective locations as long as they are connected to the internet and have a login password that would allow them to gain access to that specific meeting. Secondly, since these meetings are organized both to share information and to collect new information as old information is being edited and altered on the go, there are platforms such as GoogleDocs developed where individuals can share documents, images, graphics, videos and other illustrations. These platforms can also allow for the modification of documents and databases with changes becoming visible to all the members participating in the process instantaneously and allowing for collaborative effort to take place as the members work together to produce risk management effort that is all inclusive.
These two ways of internet-enabled communication would ensure that the satellite development team achieves the same excellent risk management results even though they were working virtually as opposed to meeting in person every time they need to make a review of their risk plan. The fact that all communication barriers would be eliminated by fast, efficient, and affordable communication means that team members would be able to remain on task making it possible plan and execute the project as outlined in the envisioned goal. Order Unique Answer Now