Project Risk Management Description

Introduction

Project risk is a variable most managers’ overlook due to pressure from sponsors to complete the project. This should not be the practice as it can jeopardize the success of the project. In a project there are certain risks that may or may not occur during implementation.

These threats should be addressed for effective execution and completion of the project. When assessing these threats the likelihood of occurrence should be the basis of analysis. If the risk has a probability that is higher than anticipated then it should be dealt with. Whichever warnings are obtained during project review they have to be handled carefully. Impact of the danger on the task can be used in addressing the management required. (Billows, 2004)

Risk analysis is done in four steps. These are risk recognition, risk measurement, risk reaction, and risk monitoring and control. In my profession as a project manager, I usually ensure that a thorough analysis of the risks is undertaken to ensure smooth flow in the project implementation. Mostly it addresses the risks that can affect the project along the critical path. This however, should not be the practice as some risks may be thought to be silent only to appear at a crucial stage of the project life. Risk management can be outsourced to avoid overlooking the impediments that may cause project failure. (Turbit, 2009)

Body

Risk investigation is the basis of managing the threats to the project execution. The scrutiny is done before the start of the project so as to manage them if they come about. In the identification of the risks they can be divided into two parts. What are the roots of the risk and what is the impact of the risk? Therefore the risk can be defined as; if the cause is not identified and addressed then the impact will arise. If this layout is followed it will be simple to eliminate replication and hence be aware of the risk. (Billows, 2004)

Risk measurement is vital and can be done in two aspects. The force of the risk should to be tackled and the chances of risk taking place should be analyzed. For ease of analysis points are awarded to the risk possibilities e.g. in a range of 1-3 where 1 is low and 3 is high. If the possibility is 3 and the force is low then the risk is intermediate. Alternatively, if the force is high and possibility low, it becomes of high precedence. If there is a high chance in delay compared to a distant chance in disaster, the distant chance should be considered more when analyzing the risks. (Turbit, 2009)

Reaction to risks should also be attended to and can be done using four criteria. The manager can shun the risk, reassign the risk, alleviate the risk, or admit the risk. If the risk can be avoided it should be shuned. For example if a vehicle is unreliable then another should be hired to replace it. In reassigning risks someone else is made responsible this can be a supplier or a contractor. When alleviating risks, the impact or occurrence is minimized. This can happen when ensuring contracts are signed to avoid delivery mishaps. When the risk is minimal then it can be admitted and responsibility taken. The reaction preparation should include the criteria and response bits and pieces to tackle the measure. (Billows, 2004)

Lastly, there should be frequent supervision of risks to spot any alteration in position, or if they twist into a concern. Standard risk reviews is advised to determine actions that are required, probability of risk and the impact, eliminate risks that are obsolete, and discover new risks. The risks that are yet to occur should be monitored if probable measures put in place. Risk management should be done concurrently with other forms of management in a project. This will ensure completion of the project within the stipulated time and budget. A good risk scrutiny allows resolution architects the facts bluntly to do something and circumvent mistakes. If these risks are anticipated, measures can be instituted to avoid or cushion the effect of the danger (Turbit, 2009)

Below is a table that can be used for risk analysis in project management.

Risk event Probability of Occurrence Magnitude of Impact Risk Response

Medium High Low Medium High No Action Type of Action

This simple chart can be used to assess the risks and be presented to stake holders. It does not take long to do the analysis. It can be done in a brain storming session and agreements made. Copies should be circulated to the various stakeholders for monitoring (Billows, 2004)

Stakeholders of a project should be managed to ensure effective delivery of the project. In order to handle the stakeholders concerns, the project team needs to address certain questions. These can be summed as who are the stakeholders? What are their concerns about? And what is the project manager going to do about it? These three questions form a basis that should be handled in order to identify with the stakeholders. Once understood an approach can be developed to maintain their contentment. (Turbit, 2009)

The people who have a bearing to the project are considered stakeholders. There are some that are secondary and only appear when you step into their jurisdiction. These could be legal bodies, buyers, and even the inner subordinate workforce. Stakeholders can be project antagonists just as effortlessly as activists. These are all individuals that need communication in a well thought manner. A good medium for communicating would be via email.

A list of the names of the bodies and institutions that will come into contact with the project should be drafted. The contact people and their names should appear alongside the organizations for easy communication. After these people are established and known, find out what their concern is. Precedence is given based on influence and concern. This means that if they have an influence they can shape the project and if they have concern they care about the project. (Billows, 2004)

Instituting some input data such as how the project will impact them, what is their concern, how does the project shape into their schedules, and what is required from them for level management of the project. This information can then be used to communicate the risks to the stakeholders according to their requirement. For example if there is an environmental legal body, its concerns are on the effects of the project on the environment. Letters to them should address their concern and how you will avoid harming the environment. This correspondence should be supported with facts that will convince them. (Brown, 2009)

The way the project manager handles the stakeholders according to their groupings, will determine the stakeholder’s response to the project. If the feedback to their queries is wanting there will be collusion and can affect the project. There are a number of ways to pass information to the stakeholder’s. This however, does not mean all stakeholders should be given the same communication. The manager needs to know who needs what information and when.

The format and frequency of disbursement should also be considered. Forming private attachments as base for communication amplifies the importance of equipment used. The use of two or more methods of addressing each stakeholder is advised. After meetings with stakeholders they should be served with pamphlets and other documents for their later reference. (Billows, 2004)

The same way a manager manages the risks then he should manage stakeholders. Risks are managed before they occur that is being hands-on, so is the case with stake holders. A well managed project addresses all the concerns of the people who will have an interest in the project directly or indirectly. These parties can alter the direction of the project in various ways if not proactively tackled. For instance, the suppliers of raw materials can be held up in delivery causing the project to stall. If the project manager had analyzed the suppliers predicaments early measures would have been put in place to cushion the project against such unnecessary hiccups (Brown, 2009).

Conclusion

It is evident that the team was going to miss out on an important part of the project. Risk and stakeholders management should be part of every project. If carried out diligently, the results are worth the trouble as the project runs smoothly with no unsuspected hitches. It has been noted that many project managers implement projects without undertaking a risk and stakeholder assessment. This can be attributed to budget constraints and/or pressure from sponsors of the project.

It should be noted that if a risk and stakeholder management is done there will be minimal hindrance to the project flow during implementation. Sponsors should be advised that it costs less relatively when these evaluations are done. Time for correcting mistakes when they have already dampened the project flow can cost the project a lot of problems especially with scheduling. There is a number of software that has been introduced in the market that can aid the project managers with their risk and stakeholders management.

Work Cited

Billows, D. (2004). Project Management Certification & Training. 4pm.com Risk Analysis Template. Web.

Brown, T. (2009). Project Smart. Project Management: Stakeholder Risk Management. Web.

Turbit, N. (2009) Project Perfect. Risk Management Basics. Web.

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