PROJECT MANAGEMENT

Project Risk Management, Scheduling and Budgeting



Project Risk Management, Scheduling and Budgeting

Introduction

This paper will be reviewing the planning process followed by a project manager to ensure that Project risk management, scheduling and budgeting that are key elements of project planning are executed properly in order to make project successful and sustainable. For the purpose of reviewing the paper will discuss project risk management, scheduling and budgeting factors and will propose a structure that how a project manager evaluates the risks associated while planning project. Also, that how the project manager uses tools in order to eliminate the risks and make effective schedule and budget for the proposed project.

Illustration of the Topic

Project management requires coordinating and controlling different factors of projects in a construction department to bring out a positive outcome (Adamson, 2006: 119). This type of coordination and management includes components like, materials, facilities, personnel and procedures. During the previous five to ten years, there has been a significant increase in the challenges and issues faced by managers for sustaining a project. Some of the factors of project management that are specifically challenging in nature include cost, scheduling (time management) and managing quality (Ahmed et al, 1998: 23). There are numerous other external factors that influence the sustainability of a project but cannot be controlled such as the climatic condition and uncertain economic changes. The lesson learned from the study is that people that are starting projects or initiating them do not repeat the same mistakes. Additionally, the lesson learned during this research is that there are numerous others suggestions that can be made for future project managers. These suggestions will make some of risks and challenges of project management, a little less scary, and they may also help in keeping the project on track for scheduling and costing (Ahmed, 1999: 225).

Background Information

The construction industry is distinguished by high level of risks and uncertainties due to the nature of construction business activities. In the UK, a 1975 report shows that one in six contracts overran by more than 40% of the original contract value, and a significant number overran by more than 80% of the original contact value (Adamson, 2006: 131). A 1983 report confirmed the same finding from 1975, where many projects experienced cost overruns and schedule delays (Aouad & Price, 2004: 97).

Increasing projects' sizes and degrees of complexity are current trends in the construction industry, and these create more risk and uncertainties for the project team to cope with (Bishop, 2008: 40). Risks and uncertainties are inherent in all construction projects, starting from the conceptual phase of the project, passing by the planning phase, moving to the execution phase, and even remaining during the operational phase. Typically, the lack of information at the commencement of projects creates an outstanding environment for risks and uncertainties (Bunni, 2003: 123).

Several authors have discussed the advantage of quantifying risk and adding risk premium to the original estimate (Burati, Matthews, & Kalidindi, 1991: ...