Project Management and Risk Management - Essay Example

Risk Template Risk Management plays one of the most important roles in the overall project management. It is often argued that the project managers forget to include the risk element into the overall project management and often face situations for which they are unprepared to deal with. In order to effectively control the project, it is of great importance that the project managers must clearly identify the risks before starting the project and outline their responses against the various risks identified so that an effective and efficient strategy can be developed to meet the uncertainties related with the project. It is further argued that the project managers ignore the issues like risk management associated with the projects because they want them to kick start the process as soon as possible ignoring the issues of great importance which can have the powers to seriously hamper the progress of any project. A good project manager would continue to assess what could go wrong with the project and exactly define which of the risks are important and which are not and based on that assessment, clearly identify the strategies to be implemented for guarding against those risks and then continuously monitor those strategies so that an effective control can be maintained over the project. Thus the overall success and failure of the project largely depend upon how effectively the project managers have assessed the risk management process. Our intended project however has taken care of this thing and has developed a comprehensive risk template to objectively analyze the risks associated with the project. Summary of the Risk Template Our proposed risk template identified fifteen (15) risks associated with the project and based on their relative importance have assigned a definite probability or likelihood of occurrence of such risk. These risks are however, identified after taking into account certain assumptions which were based on our historical experience as well as theoretical knowledge. Further to that we have also outlined our response to each of the risk identified. The overall structure of the risk template is simple however it attempted to identify clearly what are the risks that we may face and what will be their impact on the overall project and how project managers can devise their response to the overall risks associated with the project. Following section will discuss the risks identified, their likelihood and a detail summarization of the scores. Risk of vendor being taken over by other firm This risk is important in the sense that a takeover may halt the progress of the project and the project may not be completed timely due to lack of synergy between the two firms. I have assigned a score of 2(May occur) to it because there is a remote possibility of the same. I have to this result because vendor firm, in order to be more competitive can go for the same. In order to safeguard against this risk, firm must improve upon its contract writing and should develop mutually agreed contract which covers the same. Vendor does not have the requisite manpower to perform the tasks This risk is important in the sense that at the procurement stage, project managers may overlook this aspect. Vendors apparently tend to camouflage facts about them and may prove useless for the project once the project actually goes into action. In order to safeguard against this risk, we need to develop our in-house capabilities also. An overall score of 3 (moderate chances of occurrence) has been allotted to this risk. Vendor goes bankrupt It is unlikely that a vendor goes bankrupt however considering this risk, we have assigned a risk rating of 1 ( least likely to occur) to this risk and attempt to meet the risk through our in-house personnel as project managers would be working hand in hand with vendor Unlikely hood of the software being imported in the country It may be possible that the software required for the completion of the project may not be available in the country and due to legal complications; same may not be imported in the country. However there is only a very rare chance of occurrence of the same. I have assigned the score of 1 because considering the technology available in the country; we believe that this risk will very rarely occur. If project engage multiple vendors, it may slip This is less likely to occur since at the time of our procurement process, we would ensure that no such thing happens. It is because of this reason that I have assigned a score of 1 only. Software may be too difficult to use and the end users may not be able to use it I have assigned a score of 1 to this risk because occurrence of this risk would mean that our procurement process was faulty. However, in order to cover this risk, we are going to ensure in-house training. Risk of Obsolescence of the software This risk can have strong chances of occurrence however till it fulfills our requirements, we believe obsolescence may not matter much that is why we have assigned a score of 1 to it. Other risks associated with the project are generalized in nature and have been of varying degree of significance. They are not explicitly defined here however a summary of such risk would reveal that such risks can be avoided through the use of internal resources such as training of project members as well as end users of the software. I feel that risk responses are the potential strategies which project managers can apply to achieve the desired results and to guard themselves against the potential risks. It is also important that the risk template provide an opportunity to be proactive in overall risk management process because being proactive provides you necessary leverage to formulate your responses against the perceived threats. To have results also mean that the risk template has been accurately prepared by keeping into view all the responses there against the perceived risks. Weighted Score Matrix Weighted score matrix is developed in order to assign scores and weights to different criteria or requirements according to the level of significance of each factor. This is basically done in order to analyze and prioritize different requirements according to their respective importance. The basic purpose is to clearly define what is most important and what is least. Our intended weighted score matrix outlined 15 important requirement which were considered necessary for the completion of this project. The requirements pertain to different areas of the project and allocate different scores and weights to arrive at a weighted score so that it can be decided as to what is most important to complete first and where most of the resources can be utilized and where few or low level of resources are required. Based on our weighted score matrix, we have outlined following requirements and achieved following results: The software for scheduling has been in the commercial use since last 1 year This is an important requirement because it clearly indicates the commercial success of the software to be implemented. It also further indicates that the software is time tested and all the issues related with the operational functionality of the software has either been identified or been removed. We have therefore assigned a weight of 4 i.e. very important to this requirement. The reason for assigning such score is because for us as project managers, it is very critical that we must have the requisite software which is tested by independent persons so that when it is actually being implemented in our organization, it do not turn up as a software full of bugs. Software has the ability to create the matrix which has the capability to determine the different risk aspects such as detectability, severity etc This requirement is not so important for the overall health of the project however it is one of the requirements because software ideally should have the capability to identify the risks associated with the project. It is because of its low priority that we have assigned a weight of 1 i.e. Low importance to this requirement. The vendors of the software have the capability to identify the errors in software and correct them before launching the software This requirement is of high importance that is why we have assigned a weight of 4 to this requirement. Though this requirement matches with our first requirement however considering the customized nature of our software it is therefore imperative that the vendor must have the ability to identify and detect the errors and subsequently can correct them so that the operation in the project can go smoothly and without any major interruptions. It is because of this reason that we have assigned a score of 4 to it. Vendor has good financial strength and would not go for bankruptcy This is probably the most important requirement of our project because our intended vendors must have the capability as well as financial strength to fulfill his obligations. Failure to do so would ultimately lead greater interruptions in the implementation of our project because the whole cycle of procurement may have been started again to find the vendor who can fulfill the requirements of our project. Vendor is so professional that it has properly documented everything to determine the future needs of the software in terms of its upgradation as well as enhancement For any software it is necessary that it has the capability to be upgraded to the newest and latest versions so that not only old bugs are removed but also a new and more sophisticated software platform to be developed in order to take advantage of the new and advanced technologies. Due to its importance, we have assigned a weight of 4 to this requirement because we believe on building long term relationship with our vendors and expect that the vendors would continue to provide us necessary support to carry on with us. Software vendor has the requisite human resource that can develop, test and make changes to the software as and when required. This is again a very critical requirement which demands that the vendor must have the human resource which can first develop the software required for our project based on our requirements and then must have the ability to make necessary changes in it so that all the errors and omissions can effectively be removed from the software to ensure smooth functioning of the same. It is because of this reason that I have assigned a weight of 2 to it because lack of it can fulfilled through our in-house staff who can ensure that the software continue to work smoothly. Other criteria are important too and we have allocated the necessary weights to them based on their relative importance. The basic philosophy behind assigning different weights to achieve the scores is the fact that I have attempted to rationalize the requirements according to their importance i.e. their intended impact on the project as well as fulfilling the strategic objectives of the firm I feel that scores are rationally given and depict the true and accurate position as for as the whole project is concerned. Read More