Project Risk Management Techniques Used To Assess And Control Project Risk Assignment Instructions
You are assuming the role of the project manager for a company called SuperPacks to provide a new backpack product with a built-in refrigeration pouch and radio module. Your customer for this project is the U.S. Army, Ground Forces and Special Operations. As the project manager for your team, you will be submitting to your manager a project management report.
Risk Matrix Instructions
As a project manager for this company, you are to analyze the risks associated with the project. Risks should be identified and defined as cost, probability, impact, and mitigation plans for each risk. Below, you are to provide a risk assessment for the project based on the criteria and template provided.
- Identify and name at least three risks and name them (risk name).
- Determine the expected costs for each named risk.
- Determine the risk probability for each named risk.
- Include factored risk value
- Determine the risk impact to project
- Provide the Risk Mitigation Plan.
- Provide the expected risk retire date (when the risk is no longer a risk).
Super-Packs Risk Matrix
In carrying out its mandate, the aforementioned company is undertaking its greatest project yet. The venture seeks to create a state-of-the-art backpack line for the US Army, Ground Forces and Special Operations stationed across the globe. This unique product has spectacular new-age features such as a built-in refrigeration pouch and radio module for convenience. Its budget will reach the tune of $150,000 and with a scope of providing members of these military units with a durable back pack as per their specifications. With the first 100 units expected by early October 2019, it is paramount that the company undertake precarious measure that aim to make a thorough assessment of major risks that may be encounter along the way. Pursuant to the aforementioned position, this report seeks to provide a risk matrix for this particular product by identifying and naming the risks, expected costs and risk probability, in addition to an appropriate risk plan.
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Expected Risks, Costs and Probability
Major Delays owing to the High Utilization of Resources
The common axiom that the high utilization of
resources improves overall performance of a company is one that is bound to
haunt Super-Packs. Capacity utilization at the company will remain above 98%
throughout 2019 as a measure to make certain that the product is ultimately
produced in time. All development resources will be utilized owing to the
popular managerial belief that this would result in faster production of the
products. An unintended consequence of these noble intentions is will be
characterized in major delays in the development of the actual product.
Similarly, the product team will soon become overstretched and, as a result,
becomes unable to cope when unpredictable events occur. This particular risk
may cost the company an additional 30% of its budget, money which will be sent
paying additional staff to aid in the successful completion of the actual
project. It is for this reason that risk probability for this occurring stands
at 90% and one that upper management needs to brace itself for.
Missing Opportunities by Fixating on a Single Product Development Plan
An initial assessment of the contents of this project reveals that the company’s plan focuses on members of the armed forces as the sole ideal consumer of the products (without any change to tact in the foreseeable future). It is true that this project is intrinsically different from any other undertaken by Super-Packs, but the fact of the matter still remains that the company is adopting a rigid approach by focusing only on the military as opposed to the general public. A paradigm shift may actually be beneficial for the company since it will now be accorded with a unique opportunity to spread its risk thus reducing its chances of failure (Frenkel, Hommel, & Rudolf, 2014).
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Additionally, this development plan keeps the company in its comfort zone since the company’s history of seeking to create products for the military is well documented. This tunnel vision approach may inadvertently end up being the company’s Achilles heel especially due to its inordinate faith in previously established plans. An additional cost of 25% of the original budget is likely to be incurred by the company in the event that the company remains in its current trajectory and fails to seek other opportunities that may benefit it greatly. Nevertheless, the probability of this occurring is 10% since the competitive edge created by built-in refrigeration pouch and a radio module may ultimately end up increasing sales.
Product Failure due to the Presence of Too Many Features
Even though a bag with a built-in refrigeration pouch and radio module may seem ideal to the consumer, there is also a high likelihood that these features may be too many for the average Joe. It may start off as a lucrative venture, but fail if its market popularity plunges due to this particular failing. These features may seem unnecessary to some who may view them as cumbersome additions that do nothing but add repair costs in the event of a malfunctions. Moreover, this particular outlook may result in the product quickly becoming unpopular in the market. It is vital to always produce simple products that are easy to use.
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However, there are moments when companies take a giant leap of faith with the sole intention of raking in profits that may accrue from this new product. Such is the case with this flagship product and therefore vital that the customer’s perspective also be assessed. Product failure will cost the company 40% of its original budget and subsequently force it to source for a new string of clientele. Even with that being said, the probability of it actually taking place is 10% though stakeholders need to be prepared for such an eventuality.
Risk Mitigation Plan
Employing the Right People
It is of the utmost importance that Super-packs amalgamates the right team to embark on this milestone project. The presence of personnel seeking to work on a particular project often presents all kinds of risks. There is always a chance that individuals with inadequate skills may be hired and end up slowing the project altogether. Others may fail to avail themselves at their work station which impacts the overall timescale. The company thus has to make certain that only the right people are hired and retain the best resources.
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Spreading the Risk
Risks are an unavoidable part of business that executive have to grapple with. Even so, they can be managed by spreading and transferring them to other assets. This can be done by first quantifying the risk and putting a financial measure on the transference that is to follow. It is also vital to think about their likelihood of occurrence to adopt fitting strategies. Super-packs also has an exclusive opportunity to include civilians as part of their target market in case the product fails in the US Army, Ground Forces and Special Operations
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Having a Contingency Plan
Unplanned and unforeseen circumstances are always likely to emerge in the midst of an important project. This is why a Plan B is quite necessary in case projected risks materialize. In essence, it acts as a cushion that provides a soft landing for the company in the event that the company is taken by surprise. This strategy therefore involves having a float as part of the overall plan, contingency funds and additional resources. In the event that debacles are faced, the company sails comfortably and is able to weather any financial storm that may come its way.
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