Project Risk and Procurement Management: Impact on Businesses

This report delves into the crucial aspects of project risk and procurement management, emphasizing their interconnectedness and impact on business success. It defines project risk as any uncertain event with positive or negative consequences on project objectives, highlighting the need for risk management plans. The report explores various causes of project risk, including poor preparation, leadership deficiencies, inexperienced project managers, inaccurate cost estimates, and communication breakdowns. It then details the project risk management process, encompassing risk identification, quantification, response strategies, and ongoing monitoring. Furthermore, the report discusses procurement management, defining it as the acquisition of goods and services from external sources and outlining the procurement process. The report categorizes procurement into direct and indirect spending, emphasizing the importance of procurement management in ensuring smooth business operations. The benefits of sound risk management, such as avoiding major problems, enhancing revenue, increasing accountability, and enabling timely project completion are also discussed. The report concludes by underscoring the importance of integrating risk management into the project's planning stages and the need for a mature risk management approach to ensure project success.

PROJECT RISK AND PROCUREMENT MANAGEMENT
Name
Course
Date

2
Introduction
One of the key qualities that a sound management should have is the ability to assess the
risks involved in the organization. Procuring of the necessary inputs in the organization is
another vital part of the business operations. Organizations and individuals develop projects that
are aimed at enhancing the growth of the business. Every project needs inputs that are procured
from suppliers or other sources. Developed projects have potential risks associated with them.
Project risks should be assessed at the project formulation stage and methods of dealing with the
risks should be drafted. Mismanagement of procurement could also contribute to the failure of
the developed project. Project risk and procurement management have a linear relationship in the
logic that if procurement management is poor, the project’s risk of failure increases and when the
procurement management is good, the chance of project success is high. There different aspects
of project risk and procurement management and their impacts on organizations’ activities. The
article will evaluate the impact of project risk and procurement management on businesses and
business activities.
Project risk
A project risk can be defined as an uncertain event that if it occurs, has either a positive or
negative impact on one or more project objectives1
1
Chadwick, Deene. "commonsensial project Risk Defination." PMtimes Resources for project managers.
september 11, 2013. https://www.projecttimes.com/articles/commonsensical-project-risk-
defination.html (accessed october 10, 2017).