Risk management is essential within the field of project management as
the goal of a project manager is to complete a project on time and
within budget. This can be affected however by the risks throughout the
course of the project. As risks are “uncertain events or conditions
that if occur have a positive or negative effect on the project’s
objectives.” (PMI, 2004, p. 373)
Therefore, proper planning through a risk management plan and continuous
focus will assist in the decision making process. This should include
members taking a proactive stance to determine problems that could arise
throughout the project. Additionally, members should continually look
at the project and its aspects to determine what risks could arise to
delay the project or decrease its success. These members should verify
or determine which risks will affect the outcome of the project and
should be immediately acted upon. As some risks may be small in nature
which do not require immediate action. Yet, strategies and proper
measurement tools should be also implemented to assist members to handle
the risks throughout the project stages.
In essence, the objectives of risk management are to identify, monitor,
control and eliminate risks throughout the project. This includes
proper management and proactive risk assessment by the project manager
and project team. This information gathered by these individuals of
possible risks that could arise throughout the project will assist in
mitigating the problems and costs throughout the project. In essence
“proper risk management can:
Identify potential problems and deal with them when it is easier and
cheaper to do so—before they are problems and before a crisis exists.
Focus on the project’s objective and consciously look for things that
may affect quality throughout the production process.
Allow the early identification of potential problems (the proactive
approach) and provide input into management decisions regarding resource
allocation.
Involve personnel at all levels of the project; focus their attention on
a shared product vision, and provide a mechanism for achieving it.”
(Rosenberg, Hammer, & Gallo, 1999)
Additionally, there are primary functions of risk management which
include the following:
Identify – “Identification is to consider risks before they become
problems and to incorporate this information into the project management
process.”
Analyze – “Analysis is a process of examining the risks in detail to
determine the extent of the risks, how they relate to each other, and
which ones are the most important. Analyzing risks has three basic
activities: evaluating the attributes of the risks (impact, probability,
and timeframe), classifying the risks, and prioritizing or ranking the
risks.” (Rosenberg, Hammer, & Gallo, 1999)
Prioritize Risks – “Establish which of those Risks should be
eliminated completely, because of potential extreme impact, which should
have regular management attention, and which are sufficiently minor to
avoid detailed management attention.” (Tusler, 1998)
Plan – “This is the “function of deciding what, if anything should
be done about a risk or set of related risks. In this function decisions
and mitigation strategies are developed based on current knowledge of
project risks.” (Rosenberg, Hammer, & Gallo, 1999)
Track – This can be described as “the process by which risk status
data are acquired, compiled, and reported.” (Rosenberg, Hammer, &
Gallo, 1999)
Plan for Emergencies – “For all those Risks which are deemed to be
significant, have an emergency plan in place before it happens.”
(Tusler, 1998)
Control – “The purpose of the Control function is to make informed,
timely, and effective decisions regarding risks and their mitigation
plans. It is the process that takes in tracking status information and
decides exactly what to do based on the reported data. Controlling risks
involves analyzing the status reports, deciding how to proceed, and then
implementing those decisions.” (Rosenberg, Hammer, & Gallo, 1999)
Communication and Documentation – “The purpose of Communicate and
Document is for all personnel to understand the project’s risks and
mitigation alternatives as well as risk data and to make effective
choices within the constraints of the project. Communication and
Documentation are essential to the success of all other functions within
the paradigm and is critical for managing risks.” (Rosenberg, Hammer,
& Gallo, 1999)
In summary, identification of risks, evaluation of this data, and
utilization of available tools through items such as The Project
Management Body of Knowledge will decrease costs and increase the
success of this and future projects with the DoD. After all, project
risk management is a continuous process which is comprised of both risk
assessment and risk control and involves all members of the project
team. Thus, taking a proactive stance and adapting to risks as they
arise will provide the platform for success.
References:
PMI (2004) A Guide to the Project Management Body of Knowledge (PMBOK
Guide) 3rd ed. Project Management Institute, Inc. Newtown Square, PA.
Rosenberg, L. H., Hammer, T., & Gallo, A. (1999, February). Continuous
Risk Management at NASA. Retrieved January 5, 06, from Govt. Web Site:
http:// HYPERLINK
"http://satc.gsfc.nasa.gov/support/ASM_FEB99/crm_at_nasa.html"
http://satc.gsfc.nasa.gov/support/ASM_FEB99/crm_at_nasa.html
Tusler, R. (1998, September 8). Project Risk Management Principles.
Retrieved January 5, 06, from ISP Host Web Site: http:// HYPERLINK
"http://www.netcomuk.co.uk/~rtusler/project/principl.html"
http://www.netcomuk.co.uk/~rtusler/project/principl.html
Business Homework Solutions
#62742
Risk Management at Department of Defense
Scenario:
You work for a major defense contractor. Your company prepared and submitted a bid for a recent Department of Defense RFP, entitled Automated Mobile Defense System (AMDS). You have been assigned to lead Project X, which will design, develop, test, demonstrate and deploy 10 AMDS units to a location to be determined by the DoD assuming a successful demonstration. This project is expected to take at least 5 years to complete at a cost of $1.5 billion. If you are successful and deliver a quality product on time and within budget, the DoD will order 150 more AMDS units at a price of $10 million per unit. The goal of Project X is to develop a defense system to protect major and strategic cities within the US in the event of a missile attack from a hostile nation. It is to be a redundant system; the last in a series of defensive weapons to be used only in the event that all other defensive systems have failed; when enemy ABMs are approaching the US and only AMDS is left to take them down.
The conceptual design for the AMDS that your company submitted in response to the RFP consists of a mobile housing unit (MHU) containing 20 anti-ballistic missiles (ABMs) based on a radically new design; an anti-missile control computer (AMCC) used to automatically target and deploy the ABMs; and a retrofitted detection device (code name: SKYEYE) built on proven, patented radar technology which your company owns. All of these devices: the ABMs, the AMCC and SKYEYE will be completely housed in the MHU, which is planned to be an enhanced18-wheel tractor-trailer. A self-contained power source (for the ABMs) and solar charged batteries for the AMCC and SKYEYE make the entire AMDS portable and completely automatic (no personnel are required to operate any of the systems). However, military personnel on a regular basis will perform routine system monitoring and maintenance, preferably from a remote site. On-site maintenance should only be needed on rare occasions expected to arise from unforeseen events such as earthquake, tornados, ice storms, etc. Should it become necessary, military personnel will move the AMDS to a location known only to them. While it was not included in the design accepted by the DoD, your company would like to be able to provide additional capability with the system: they would like the AMDS to be able to operate while it is being moved.
You are the project manager and oversee the efforts of over a dozen nuclear scientists, engineers, and technology professionals. Many of them are acquainted with the rudiments of project management, but very few know much about project risk management. You'll need to do some education along with managing schedule, budget and scope.
Task
Deliverable Length: 6-8 slides with notes
Details: Your discussion with the team went very well, and you present your plan to your manager in preparation for the formal presentation to the project stakeholders. She balks at the time and budget you've built in for risk management analysis and planning. "Don't you understand, time is of the essence here. The DoD gave us five years, but they are really expecting us to have the prototype built and tested within the year. We all know the risks - we don't need to or have the time to bother with a long, drawn-out risk management process."
You talk through your reasoning with her, which convinces her only to allow you to present a business case for the development of a risk management plan.
Using the Internet, research risk management practices. Build a persuasive case for "selling" the use of risk management for Project X to the project stakeholders. Keep your presentation at a high level but link the value of risk management to business objectives.
Objective: Use effective communication techniques.
Discuss the integration of risk management as a component into the total project management approach.
Communicate risk effectively to all project stakeholders
I am looking for assistance with this task on selling the concept or value of risk management but linking it to the business objectives. I understand that it should be sold based on how it will affect the bottom line of the project. For instance, we don't know if the suppliers, sub-contractors, engineers and others are going to perform effectively and efficiently and what other internal and external risks may arise so Risk Management planning is assessing the risk. But the objectives are somewhat unclear/vague so any assistance would be greatly appreciated. I have attached a sample of the importance of risk mangement to the field of Project Management.
Risk Management at Department of Defense
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- Risk Mangement- Automated Mobile Defense System (AMDS). - Scenario: You work for a major defense contractor. Your company prepared and submitted a bid for a recent Department of Defense RFP, entitled Automated Mobile Defense System (AMDS). You have been ...
- Risk Management at Department of Defense - Scenario: You work for a major defense contractor. Your company prepared and submitted a bid for a recent Department of Defense RFP, entitled Automated Mobile Defense System (AMDS). You have been ...
- Project Risk Management - Scenario: You work for a major defense contractor. Your company prepared and submitted a bid for a recent Department of Defense RFP, entitled Automated Mobile Defense System (AMDS). You have been ...
