Risk Management Strategies for Project Success
Added on 2020-10-20
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Project Risk and Procurement ManagementAssignment: The management of risk is proving to be one of the most difficult tasks for the project management profession: How can risk be managed effectively and who shouldbe responsible for this task?Student ID:@00573549Word count: 2,995By submitting my work here, I declare that:This work is my ownIf this is a group project, each student has contributed to the work in accordance with the set criteriaThe work of others used in its completion has been duly acknowledgedExperimental or other investigative results have not been falsifiedI have read and understood the University Policy on the Conduct of Assessed WorkBy submitting this assessment, I am declaring that I am fit to do so. I understand that personal mitigating circumstances requests which relate to the standard I have achieved in this assessment may become null and void.
ContentsAbstract.............................................................................................................................................2Introduction.......................................................................................................................................3Defining risk.......................................................................................................................................3Risk Management..............................................................................................................................4Identifying Risks.................................................................................................................................5Risk Assessment................................................................................................................................5Risk Response Strategies...................................................................................................................6Risk Monitoring and Control..............................................................................................................7Case Study.........................................................................................................................................7Conclusion.......................................................................................................................................101
AbstractFor thousands of years, man has achieved a lot through undertaking challenging projects that hasrevolutionise the way we live, travel and communicate. But through all of this, risk has deterred alot of projects and caused quite a few to fail at very high cost. As every project is unique,understanding the associated risk in terms of its probability and consequence makes riskmanagement a very difficult task. Now we do not know for sure how and when a risk will occur, butusing the expertise and past records, we can predict by identifying the potential risk, categorisethem based on their level of impact, likelihood of it happening and how to respond to the threats asand when they arise. This critical step carried out at the procurement planning stage of the projectan important aspect for ensuring project performance, completion on schedule, within budget andto the required quality standard. There are also risk that brings potential benefit to the project, butthey are considered as insignificant. A project case study is included to show how strategy isdeveloped to assist in minimising risk in a project.2
IntroductionFrom the era of the construction of the pyramids by the Egyptians to the erection of the highesttower in Jeddah and the evolution in the world of communication and information technology, wehave seen the potential of mankind and their ambitions to achieve more greatness. How projectsare managed has changed drastically over the centuries and even more so over the past 50 years.With the introduction of computers, digital record keeping has been made possible from thetraditional use of books and files. Nowadays, specialised software is processing data and providingbetter feedback and projects are being done at a quicker pace. But even with all the modernisationin process and equipment facilitating project tasks, risk is one thing that keeps on hindering theobjectives. With millions in financial resources at stake, managing risk has become a subject on itsown. The Project Manager is assigned with the daunting task and held accountable to ensure thesuccessful completion of the project and to say the least, keep investors happy. In this essay, we will explore concept of risk, how it affects project management and how to identify,analyse and control them so to minimise its impact on the project objectives through the set outstrategies. Defining riskSo, what is risk exactly? Risk is everywhere and forms part of our daily lives. Whenever we hear theword risk, we immediately think of danger. In my view, this is because whilst growing up, we werethought of what will happen if, for example, we cross the road without looking on both sides wemight get hit by oncoming vehicle; or that playing with matches can cause fire and burn down thehouse. These are some of the bad things and our parents/ guardians ensure to remind us of all thetime that it got stuck into our head that the risk of doing or not doing something can lead to seriousconsequences. We do not know when exactly risk will happen, we can only forecast on the probability of ithappening but there is no guarantee it will actually happen or the time it does.There are a lot of definitions for risk; Sollish and Semanik (2012, p.125) defined risk as “the chance ofsomething happening that will have an adverse impact upon our objectives.” Now this definition hasfocussed only the negative side of risk, which I do not agree with. There are also the positive aspectsof risk. So why did they not refer to this as well? In my opinion, they too have a part in influencing aproject’s objective, but because of the greater influence of the negative impacts of risk, the positiveaspects are simply brushed aside and considered as insignificant. An example of a positive risk is completing a project well within the estimated budget and schedule,hence the organisation saves on money and can later invest the balance fund into another project oruse it as an incentive and give salary enhancement to its employees. But then again, this can also beconsidered as an overestimate and wrong work schedule calculation by the project manager. Alternatively, the British Standards Institute (BSI) define it simply as the “effect of uncertainty onobjectives” (Risk Management Guidelines, BS ISO 31000: 2018(E). I agree, these effects which we canonly assume may happen can be referred to as the benefits and threats on achieving future goals.One of the definition of risk that I am in agreement with which encompasses all of what risk about is“uncertain event or condition that, if it occurs, has a positive or negative effect on a projectobjective”. (Salford, Project Risk and Procurement Management, Unit 1 Video Lecture). 3
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