Risk Management Report: A&D Hitech Online Store Project

This report provides a comprehensive analysis of risk management within the context of A&D Hitech, a computer product supplier aiming to expand its business through an online store. The report details the benefits of risk management, including financial considerations and resource protection, and outlines the project's goals and objectives. It identifies potential risks, such as technical challenges, and discusses risk management strategies including qualitative and quantitative analysis, risk matrix development, and mitigation plans. The report emphasizes the importance of stakeholder roles, budgeting, and communication in the risk management plan. It also analyzes the expected monetary value (EMV) to demonstrate the potential financial impact of unmanaged risks, concluding with recommendations for corrective strategies and actions to ensure project success. The report covers aspects of risk identification, assessment, and resolution in the context of a new online marketing initiative and its associated risks, and the strategies to mitigate them.

Running head: RISK MANAGEMENT
Project Risk Management
Name of the Student:
Name of the University:
Author’s Note:

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Executive Summary
This current report gives a brief account of the risk management plan in the context of A&D
Hitech. However, it a computer product suppliers and provides accessories. Due to huge
competition, this organization has developed an online store project to mitigate this process.
However, risk management is crucial for any project to develop a safety technique. On the other
hand, technical risk is the main issue of such organization as it is going to develop an online
marketing process. It is essential for an organization to use corrective strategy and action to
review the risk. Bothe quantitative and qualitative risk analysis processes have been conducted in
this study.

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Table of Contents
Introduction......................................................................................................................................5
Section 1..........................................................................................................................................6
1.1 Benefits of the process involves in risk management............................................................6
1.2 Goals and Objectives of the Project.......................................................................................6
1.3 Background of the company..................................................................................................7
1.4 Identification of the Risk.......................................................................................................8
Section 2..........................................................................................................................................8
2.1 Scope of the risk management approach...............................................................................8
2.2 Components of risk management plan..................................................................................9
2.3 Discussion of the expected monitory value.........................................................................10
Section 3........................................................................................................................................11
3.1 Determination of the risks...................................................................................................11
3.2 Evaluation and the assessment of the risk...........................................................................12
3.3 Qualitative and quantitative risk analysis............................................................................13
Section 4........................................................................................................................................14
4.1 Identification of major and minor risk associated with the project.....................................14
4.2 Probability of the risk..........................................................................................................15
4.3 Risk Matrix template...........................................................................................................16

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Risk Matrix:...............................................................................................................................16
Project Name: Online store project............................................................................................16
4.4 Strategy of risk Data quality analysis..................................................................................18
4.5 Review of the risk................................................................................................................18
Section 5........................................................................................................................................20
5.1 Tolerance of risk..................................................................................................................20
5.2 Mitigation of risk.................................................................................................................20
5.3 Corrective strategy of risk management..............................................................................21
5.4 Corrective action process.....................................................................................................22
Section 6........................................................................................................................................23
6.1 Results..................................................................................................................................23
6.2 Follow up.............................................................................................................................23
Conclusion.....................................................................................................................................23
References......................................................................................................................................25

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Introduction
Risk management approach sheds light on the importance of risk management during
conduction of a project. However, during the implementation of a project risks encounter thus it
is crucial to forecast the risks and to manage them properly (Sadgrove, 2016). Identification of
the risk is a vital part of the risk management planning. Risk can take place at any stage of the
project life cycle. The risk management plan should be updated in periodical manner and needs
to expand throughout the project life cycle. During the enhancement of the complexity of the
project, risk identification becomes rapid. Identification of risk, assessment of risk and resolution
of the risk are the main phases of the risk management in a project (MacLeod, 2016). It has been
received that when a new project is started risks are associated with it that hamper the success of
the project.
The risk is considered as the main contributor of the uncertainty in an organization. For
this reason, the organization focuses on the risk identification and development of the action plan
to mitigate the risks (Hopkin, 2017). The ability of the organization to manage risk enables to
take their business decision confidently. This current study deals with the risk management of
the project in the context of A&D, which is going to explore their business via online marketing.
However, risks are also associated with this project that needs to reduce by this organization.
Hence, an action plan will be developed to deals with the encountered risks during the
implementation of this project. For this organization establishment of the online marketing will
be effective to reduce the competition that had faced by this organization in 2002.

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Section 1
1.1 Benefits of the process involves in risk management
Risk management program enables the organization to define the possible risks that are
associated with a project (Cicmil et al., 2017). In the context of A&D, they have implemented
online marketing in order to expand their business and to gain competitive advantages. Hence,
risk management plan will bring benefits for such organization to define the risk regarding such
specific project. On the other hand, financial consideration is another benefit of the risk
management process. During the development of a project, financial risk encounters (Hopkin,
2017). In the context of A&D implementation of a risk management approach is helpful for them
to estimate the cost of the financial risk in this online marketing project.
Development of the business culture is another advantage of the risk management
process. A&D can enhance their reputation by implementing risk management plan. As for
example, the preparation of the perfect project operation starts when this organization anticipates
risk, as a result, the unexpected incidents disappear. Resource protection is a crucial outcome of
risk management (Harris, 2017). In the context of A&D Hitech, the risk management approach
allows this organization to identify the key risks. They are able to plan to resist the loss of
resources such by protecting the employee hours and equipment.
1.2 Goals and Objectives of the Project
The main goal of this project is to identify the risk and the management process during
the implementation of online marketing in the context of A&D Hitech.

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Objectives
 To identify the possible risk associated with the implementation of online shops in
context of A&D Hitech.
 To evaluate the action plan to manage the risk associated with online marketing
 To discuss the implementation of the risk management strategies in context of A&D
Hitech
 To evaluate the benefits of the risk management process in context of A&D Hitech
The above goal and the objectives will be helpful for the selected organization to carry out its
risk management planning regarding their online marketing. Based on these objectives the action
plan is discussed below.
1.3 Background of the company
A&D Hitech is an organization that supplies computer products and accessories and
services to the customers and other businesses. This organization established in Lincoln,
Nebraska. Ted Walter was the founder of such organization. In the year 2000, their fiscal
property was $400 that ensures their rapid growth in business. Before the year of 1999, the
orders came via call center and were written in the paper, which took more time to pass the order
and highlights on the poor efficiency. In the year 2001, they have implemented successful ERP.
At previous such organization did not use the technology for its business operation and cost
reduction. Chris Jhonson is it project manager for last 12 years and his project planning
technique is considered as good practice in the computer product companies those are based in
St. Louis. Due to not selling the products via online, this organization had been facing massive
competition in the market. After realizing it, the project manager recognized that online store

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project would be helpful for the success of their business (Hbr.org, 2017). This new project
planning includes determination of the business requirement, process flow, and development of
prototype and management of resources. However, a risk management planning was undertaken
by this organization to manage their online store project.
1.4 Identification of the Risk
Identification of the risk is a vital process of the risk management approach as based on it
the action is taken in an organization (Qazi et al. 2016). Feedback collection form the
stakeholders are crucial to identifying a project risk. In the context of A&D Hitech, they
implemented the online store project, which is associated with the risks. Hence, this organization
conducted meeting regarding their project where the project managers Jhonson felt more
comfortable to discuss the risks and the possible solution regarding them. Preparation of the
checklist is a useful strategy to identify the potential risk in a project. In the context of A&D
Hitech implementation of this strategy would be beneficial for their new project to assess the
common risks of online store project. Analysis of the assumptions is significant to detect the
project risk (Wang et al., 2016). The mangers of A&D Hitech could ask their employees about
their assumptions regarding this project as assumptions are considered as the sources of risks.
Based on these assumptions the risks are documented.
Section 2
2.1 Scope of the risk management approach
Risk management approach is an essential technique for the project management to make
the project safe from the potential risks (Qazi et al., 2016). The major scope of the risk
management is to interpret the product benefit and its associated risk. In the context of A&D

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Hitech risk management would be beneficial for this organization to design and implement the
intervention process, which is associated with the project risk. On the other hand, risk
management project enables an organization to evaluate the intervention method by utilizing the
light of new knowledge (Fleming & Koppelman, 2016). The limitations of theses project scope
highlight on the poor communication. However, in order to utilize the scope of the project a
proper communication is required in the context of A&D Hitech. On the other hand, the
financial resource is another barrier of the project scope as to implement the intervention process
of the risk management strong financial resource is needed for this organization otherwise it is
difficult to manage the risk. Adoption of proper strategy is a big barrier for the project
management scope, as specific strategies are required to identify the scope of risk management
process.
2.2 Components of risk management plan
Roles and responsibilities of the stakeholders are major components of the risk
management plan. In the context of A&D Hitech Jhonson has the major responsibility to manage
the risk as the project manager carries on the major responsibility of risk management program.
The project manager does team coordination. Budgeting is another component of the risk
management plan (Fenner-Crisp & Dellarco, 2016). However, it is important for A&D Hitech to
make a proper budget to implement intervention plan based on their identified risks. Based on
the action plans of the risk management the budget is established. Therefore, the timing is a
crucial component of the risk management plan. Often the risk management plan is conducted
throughout the project lifecycle thus time is the big factor in such planning.
Communication is essential to conduct a risk assessment as it involves the stakeholders
by taking their feedbacks in the risk management process. The communication level was not

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good among the stakeholders of A&D Hitech. Hence, it would be helpful for such organization
to establish a good communication to carry out the risk assessment plan. Risk interpretation
should be done based on the quantitative and qualitative analysis method. This would be
beneficial for A&D Hitech to interpret the common risks regarding the online store project.
Apart from these auditing and tracking is an essential component of risk assessment planning
(Knechel & Salterio, 2016). This would allow A&D Hitech to document the ways to record the
risk activities and the future needs of the project. Therefore, the risk method would be audited
based on the risk assessment.
2.3 Discussion of the expected monitory value
Expected monetary value analysis is a statistical process that focuses on the possible
outcomes of the business operation. However, if an organization fails to manage the risk then
they may face a huge loss in their business (Wright & Eppink, 2016). In order to evaluate the
different actions in the risk assessment plan Expected monetary value analysis is crucial. In the
context of A&D Hitech they need to manage the project risk otherwise, they might face the
economic loss.
Project expected monetary value (EMV) = Cost of Project+ value of expected risk-
Expected value of opportunity
In the context of A&D Hitech, the cost of their new project was $500 and their value of
expected risk was $300. On the other hand, the expected value of the opportunity was $200.
Thus, the EMV was $500+ $300- $200=$600
Hence, this organization would lose approx $600 for not managing the risk in their project.
However, based on this expected monetary value it can be said that A&D Hitech needs to

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manage the potential risks of their new project. Otherwise, it would lead them to face a financial
loss in their organization, which might affect their business profitability.
Section 3
3.1 Determination of the risks
Project scope risk is a big type of risk that encounters during a project. A&D Hitech
may face this type of risk while establishing the online store project to reduce the high
competition. For this reason, hardware and software defect is a very common risk associated
with this project (Turner, 2016). Scheduling risk is another type risk encounter in the project
management. However, often the delays in taking the action plan within a project management
may occur in the context of A&D Hitech. Resource risk takes place due to the personnel-related
issue and the outsourcing issue. Every project includes workforce and a high investment. In the
context of A&D Hitech, attrition challenges and the personnel leaving may be the major resource
issues during the project management. One of the most important is the technological risk in the
context of online marketing as it is completely based on the technology (Chen, Lin & Chuang,
2016). A&D Hitech is going to introduce their new online store project to gain the competitive
advantages in the market. Thus, software and hardware related risks might occur in their project,
which can affect the business.
Many people are associated with the online marketing project, which may cause issues in
the decision-making process (Aven, 2017). Such decision-making process related risk may
take place in the context of A&D Hitech. Apart from this, communication risk is a big issue in
the project management process. According to the given scenario, the communication level

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between the stakeholders was not good in A&D Hitech. This highlights on the poor
communication during the planning of their project.
3.2 Evaluation and the assessment of the risk
Technical, organizational, external and project management are the major four
components of the risk breakdown structure. Hardware and software issues are categorized under
the technical risk. On the other hand, organizational risks include high cost and the resource
issues. External components include the political pressure (Linkov et al., 2017). In the context of
A&D Hitech, they may face issues during their new project management as without the green
signal of the government this organization may fail to give shape their new project. Hence, the
rules and regulation of the government may affect the establishment of the online store project.
On the other hand, supplier issue is another aspect of the external component. Poor planning and
control are the vital aspects of project management component.
Risk leaves a big impact on the project outcomes as different risks like technical,
resource, scheduling and so on hinder the success of the project (Abrahamsson et al., 2017).
A&D Hitech may face difficulties due to the potential risk factors that are associated with their
online store project. However, the technical risks create barrier in the accessing of the websites
that can affect the significant outcome of the online project. Therefore, the risk may affect the
brand image of the organization due to the failure of the new project. Stand-alone risk and the
contextual risk are the major risk analysis techniques that are associated with the risk
breakdown structure. Sand alone risk analysis technique is associated with sensitivity analysis
while contextual risk analysis focuses on the corporate risk analysis.