Assessment 2: Manage Project Risk - Risk Management Report & Analysis

This report, titled "Assessment 2: Manage Project Risk," delves into the core principles and practices of project risk management. It begins by defining different types of risks, including opportunity-based, uncertainty-based, and hazard-based risks, and their implications within an organizational context. The report then outlines the key components of a comprehensive risk management plan, such as risk identification, assumption documentation, risk breakdown structures, probability and impact matrices, cost and schedule considerations, and the use of risk registers. Further, the report examines industry-specific risks like accidents, customer complaints, injuries, and environmental damage, highlighting the importance of compliance with relevant laws and regulations. It differentiates between qualitative and quantitative risk management techniques, emphasizing their roles in risk identification and overall risk assessment. The report includes a project analysis section, where specific risks related to migrating to a new Learning Management System (LMS) at AIS are identified, analyzed, and prioritized. Risks like system breakdown and incorrect system implementation are assessed, with their potential impacts and mitigation strategies. The report also details the establishment of risk treatments, controls, and regular monitoring processes to ensure effective risk management throughout the project lifecycle, concluding with an evaluation of the effectiveness of the risk management plan and recommendations for future projects.

Running head: ASSESSMENT 2: MANAGE PROJECT RISK
ASSESSMENT 2: MANAGE PROJECT RISK

ASSESSMENT 2: MANAGE PROJECT RISK
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Table of contents
1. Explanation of risk base...............................................................................................................3
2. Explaining the key components in a risk management plan........................................................3
4. Explaining the difference between quantitative and qualitative risk management techniques...4
5. Project..........................................................................................................................................5
References......................................................................................................................................10

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1. Explanation of risk base
a. Opportunity based: Opportunity based risk are risks which are very probable to happen
but they bring opportunities with them if the firm is able to get through and mitigate the
risk in an efficient manner. The risks if not mitigated can also cause huge damage to the
operational activities of the firm. Hence it is important for a company to mitigate such
risks within the operations of the firm1.
b. Uncertainty based: The risk which is uncertainty based is measured on the basis of the
certainty on which it will happen. Hence it can be said that the risk can be either certain
or uncertain. Uncertainty based risk are majorly uncertain to occur within the operational
activities of the firm.
c. Hazard based: Hazard based risk is measured on the impact which it will have on the
organization's overall structure. It can be stated that if a risk will have huge effect or
impact on a organization it is considered to be an hazardous risk and vice versa. In such
case the impact is major parameter based on which the risk is defined2.
2. Explaining the key components in a risk management plan
The key components of risk management plan are as follows:
1 Acharyya, Madhu and Chris Brady, "Designing An Enterprise Risk Management Curriculum
For Business Studies: Insights From A Pilot Program" (2014) 17(1) Risk Management and
Insurance Review
2 Audit Of The Department Of Finance's Economic Action Plan (Finance Canada, 2010)
Cox, Louis Anthony Tony, "Improving Causal Inferences In Risk Analysis" [2013] Risk
Analysis

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1. Definition of the risk which is to be identified
2. Assumptions over the risk which may be there
3. A risk breakdown structure which is demonstrate the rocks which are available at all
levels
4. Probability and impact matrix to show on what will be the probability and impact of the
risk which is due to occur in the future.
5. Cost and schedule: The cost and schedule within which rims will be litigated is to be
defined
6. Risk register to monitor risks which is mitigated by the firm to correct errors and further
risk identification
3. Explaining industry sector risk which are available
Accidents and injury: In accordance to the Australian Work and Health Safety Law it is the
responsibility of the employer to make the employee work safe in a safe working environment.
The employer can be prosecuted under the WHS act in Australia for neglecting his
responsibilities and duties3.
Customer complaints: Consumer complaints against the company are protected by Federal
Trade Commission, Attorney General and Australian Consumer Law. It can be said that the
cubisme right is to e protect against risk like frauds, and undue obligations4.
3 Dionne, Georges, "Risk Management: History, Definition, And Critique" (2013) 16(2) Risk
Management and Insurance Review
4

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Injury: Under the Australian law the employer is responsible for compensating the worker in
case of his injury while working in the firm not doing so will increase charges against the
employer. Hence it is dealt with severe attention within the firm.
Damaging the environment: Damaging environment under the Australian Environmental law is
treated as an unfair activity and the firm can be prosecuted for disturbing the environment’s
ecosystem. Hence proper control measures should be taken by the firm to mitigate such
activities.
4. Explaining the difference between quantitative and qualitative risk
management techniques
The qualitative and quantitative analysis method are different from each other because
qualitative method and technique of risk management deals with identification of the rings which
are present within the firm. Whereas the quantitative risk determines the overall risk which will
be there through the identified risk5.
5. Project
a. Identify project risks
i. Determine at least one risk objective and standard, with input from stakeholders
(staff/students) for migrating to new Learning Management System at AIS
5 Filbeck, Greg et al, Derivatives And Risk Managment (Kaplan Publishing, 2005)
Goshim Azeref, Alebachew, Credit Risk Management (LAP LAMBERT Academic Publishing,
2012)

ASSESSMENT 2: MANAGE PROJECT RISK
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The two risks which is there in context of the stakeholders in migrating to new learning
management system is the is of system breakdown and wrong system implementation6.
ii. Establish project risk context to inform risk management processes. Also discuss “Risk
Appetite” of the project, in this section
The risk appetite of the firm ranges from mediocre to low hence in order to mitigate the above
mentioned risks the management process of decreasing such risks will be opted so that the risk is
minimized.
iii. Identify project risks (at least two) using valid and reliable risk identification methods
Through the use of direct identification it can be observed that abo9ve mentioned risk which is
system breakdown and wrong system implementation is identified as this seem to have direct
impact on the stakeholders.
iv. Classify project risks within agreed risk categories
The risk category in which the above mentioned risks come intop is change management risk as
there is some changes which are to be brought in the firm through implementation of new
system.
b. Analyze project risks
i. Determine risk analysis classification criteria and apply to agreed risk ranking system
In accordance to the risk ranking system the risk seems to be certain and can be catastrophic if it
occurs in the firm causing huge impact on the overall system of the firm7.
6 Hofmann, Annette and Nicos A. Scordis, "Challenges In Applying Risk Management Concepts
In Practice: A Perspective" (2018) 21(2) Risk Management and Insurance Review
7 Kousky, Carolyn and Howard Kunreuther, "Risk Management Roles Of The Public And
Private Sector" (2018) 21(1) Risk Management and Insurance Review

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ii. Use risk analysis processes, within delegated authority, to analyse and qualify risks,
threats and opportunities
The risk is related to the change of system with the company which has threats of system
breakdown if not implemented properly which can stop operations of the firm mitigating the risk
will have the opportunity for the firm to turn a new efficient system.
iii. Determine risk priorities in agreement with project client and other stakeholders and
explain in migrating to the new Learning Management System at AIS what the risks
priorities are
Risk Potential
exposure
Control
effectiveness
Priority for
treatment
System breakdown Low Low 2
High 5
Wrong implementation of
system
High Low 3
High 6
iv. Document risk analysis outcomes for inclusion in risk register and risk management
plan.
1. Identifying risks
Through the risk analysis made it has been clearly identified that system breakdown and work
implementation of system is the major iks which are there. It can be said that the occurrence of
wrong implementation of system is more in respect to the other risk.

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2. Estimate impacts
The impact of both risk are catastrophic in nature.
3. Define responses or treatments or risk mitigation
The response will be to set a management which look at the implementation of the system and
backup system which will help the firm to operate in case of system breakdown.
c. Establish risk treatments and controls
i. Identify and document existing risk controls
1. To monitor system implementation system
2. To have a backup system in chance of system breakdown
ii. Consider and determine risk treatment options using agreed consultative methods
1. There will be management setup to monitor implementation of system
2. There will be old system for backup in case of any emergency
iii. Record and implement agreed risk treatments
Recording will be done through management as well as the implementation of this risk
management process will be implemented by the management to manage controls8.
iv. Update risk plans and allocate risk responsibilities to project team members
The team leader will be assigned for monitoring and managing risk in the implementation as well
as in the breakdown of the system.
d. Monitor and control project risks
i. Establish regular risk review processes to maintain currency of risk plans. This can be
done during or after AIS migrates to the new Learning Management System.
8 Scordis, Nicos A. et al, "Principles For Sustainable Insurance: Risk Management And Value"
(2014) 17(2) Risk Management and Insurance Review

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In order to monitor risk property risk reports will be created by the management steps which will
report the extent to which the risk has been mitigated and the probability of risk which is still her
in change process9.
ii. Regularly monitor risk environment to identify changed circumstances impacting
project risks.
It can be said that through risk control measure it has been measured that the company has been
able to mize the probability of risk which is there change in technological environment has
helped the firm in minimizing the risk.
iii. Determine risk responses to changed environment
The risk responded to the change in the technological in a positive way as there was
technological advancement the risk of system breakdown and wrong implementation system
decreased.
iv. Implement agreed risk responses and modify plans to maintain currency of risk
treatments and controls
It can be said that the old procedure of risk management will be maintained to maintain the risk
management performance which will help the firm in capitalizing the risks which is available in
the current situations.
e. Assess risk management outcomes
i. Review project outcomes to determine effectiveness of risk-management processes and
procedures
9 Smallman, Clive, "Knowledge Management As Risk Management: A Need For Open
Governance?" (1999) 1(4) Risk Management

ASSESSMENT 2: MANAGE PROJECT RISK
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It can be said that effectiveness of risk management plan was very accurate as it helped the firm
to mitigate risks which was there in the company while changing the system. This shows the
effect of risk management plan which was there in the company10.
ii. Identify and document risk management issues and recommended improvements for
application to future projects
There were no major issue in the risk management process ut the decision of having a backup
system was constantly. It is recommended that the company should think of system which is cost
efficient to increase the profitability of the risk management system. This will help the company
in saving some cost to invest in future operations of the firm11.
10 Wilson, Laird, Doug McCutcheon and Marilyn Buchanan, Industrial Safety And Risk
Management (University of Alberta Press, 2003)
11 Young, Peter C and Steven C Tippins, Managing Business Risk (AMACOM, 2001)

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References
Acharyya, Madhu and Chris Brady, "Designing An Enterprise Risk Management Curriculum For
Business Studies: Insights From A Pilot Program" (2014) 17(1) Risk Management and Insurance
Review
Audit Of The Department Of Finance's Economic Action Plan (Finance Canada, 2010)
Cox, Louis Anthony Tony, "Improving Causal Inferences In Risk Analysis" [2013] Risk
Analysis
Dionne, Georges, "Risk Management: History, Definition, And Critique" (2013) 16(2) Risk
Management and Insurance Review
Filbeck, Greg et al, Derivatives And Risk Managment (Kaplan Publishing, 2005)
Goshim Azeref, Alebachew, Credit Risk Management (LAP LAMBERT Academic Publishing,
2012)
Hofmann, Annette and Nicos A. Scordis, "Challenges In Applying Risk Management Concepts
In Practice: A Perspective" (2018) 21(2) Risk Management and Insurance Review
Kousky, Carolyn and Howard Kunreuther, "Risk Management Roles Of The Public And Private
Sector" (2018) 21(1) Risk Management and Insurance Review
Scordis, Nicos A. et al, "Principles For Sustainable Insurance: Risk Management And Value"
(2014) 17(2) Risk Management and Insurance Review
Smallman, Clive, "Knowledge Management As Risk Management: A Need For Open
Governance?" (1999) 1(4) Risk Management
Wilson, Laird, Doug McCutcheon and Marilyn Buchanan, Industrial Safety And Risk
Management (University of Alberta Press, 2003)
Young, Peter C and Steven C Tippins, Managing Business Risk (AMACOM, 2001)