RISK MANAGEMENT ASSIGNMENT

Risk Management Assignment



Risk Management Assignment

Introduction

For most companies the key to project management is delivery to time, cost and quality. Ensuring that appropriate action is taken against potential risks during the project lifecycle, minimizing potential impact and safeguarding the project is key. This cannot be achieved without robust risk management which should always be seen as an integral part of project management facilitating projects to achieve their goals.

Identification of Risk Sources

Risk management is best achieved through a methodical approach employing best practice management principles - a sporadic and rushed approach (“we do it because we have to, not because we value it”) will not work. All too often risk management is looked at in terms of undertaking a risk review to pass a phase gate or get a project initiated not because its important to do it! Risk management processes aim to identify risks that might affect a project's objective and therefore should be seen as integral to the performance of the project. (Malhotra 2008 58-60)

It goes without saying that risks should be assessed and appropriate mitigation actions developed. Where many project managers fail is that risk management stops at the point where the mitigation is identified and the project team convince themselves that they have solved the problem. Its vital that the output of the mitigation activity is reviewed and that the risks are monitored consistently and throughout the project lifetime to ensure that they are both up to date and that the mitigation activity is still valid.

Phases of Project Lifecycle

In the past feasibility studies for projects have been developed on an ad hoc basis because a standardised approach has never really been developed. As a result various large organisations like the international oil companies and the British Airports Authority have developed their own in-house systems to improve the process. The old unstructured approach has been successful on many projects in the past but the complexity of the processes involved in a large project inevitably results in a quite high risk of failure when the project either runs very late or is wildly over budget or even worse just does not work. The investment life-cycle was normally considered to consist of 6 separate stages of development that can overlap. These are:

Opportunity identification

Someone has a bright idea, and an initial assessment is made. If the opportunity stands up during an initial analysis than funds are commited for further investigation. It is possible that a pre-feasibility study may be necessary before further funds can be committed. This is conventionally a very ad-hoc process and the lack of control duringn this stage is often a prime cause of project failure.

Appraisal

The appraisal stage should include a comprehensive feasibility study that clearly identifies all the development options and the one that is the most attractive

The appraisal will probably include:

Definition of the project objective and scope

Definition of the project structure

Development of the business case

Identification of the funding options

Risk analysis

The feasibility study and investigations

At the end of this stage ...