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Running head: Engineering Risk Management 1

Engineering Risk Management 3

Midterm Exam

CMGT 562: ENGINEERING RISK MANAGEMENT

1. Project Risk Management (20 Points)

You have been tasked to manage a facilities construction project for a non-profit organization. Specifically, the organization is undertaking a large project to build a 6000 square foot office and an attached building with 20 hotel style rooms for clients. The budget is tight and the organization needs to have these facilities as soon as possible. The project is in the planning stage and you have some requirements documents and funding available. How would you use risk management on this project? Why would you use risk management? What are the steps of your risk management process (use any model you like ie PMP, textbook, DoD etc)?

Basically, risk management refers to a certain process which is generally used by project managers to minimize on any possible potential problems and that may bring some negative impacts in the project’s timetable (Faust, & Raes, 2016). When we talk of a risk, we basically refer to any unexpected event that might affect the normal functioning of the people, the normal processes in an organization, the available technology as well as the available resources involved in the project in question. Unlike other issues that always have a likelihood of happening to an organization, risks are normally those events that could occur and where one may not be in a better position to tell when they might occur (Dennis, Wixom, & Roth, 2018). Due to such an uncertainty, project risk requires one to effectively prepare in order to be able to efficiently manage them when they occur. Additionally, project risk management could also refer to the process of identifying, analyzing and giving your response to any attached risks that might arise over the process of establishing a project, which could help the entire process remain in track and maintain their objective of meeting their set goals (Faust, & Raes, 2016). This kind of a risk management is not only reactive, it should as well be part and parcel of the whole planning process so as to figure out any risks that might happen during the establishment process and how to control the same risk just in case it occurs.

A risk is basically defined as something that could potentially impact negatively to one’s project plans, timeline, budget as well as its overall performance. They are generally potentialities and in the case of a project, if they become realities, they therefore become classified as issues and that must be addressed with an immediate effect, simply because, if not well managed, they could result the whole project into a great mess (Dennis, Wixom, & Roth, 2018). In this case therefore, risk management could be classified as the process of identifying, prioritizing, categorizing as well as planning for any possible risk before they later become issues. The process of risk management could as well mean different things based on different types of projects. On those projects that are large scale, risk management strategies might entail extensive and detailed research and planning for each risk possibility to ensure mitigation strategies are in position if in any case issues arise (Dennis, Wixom, & Roth, 2018). However, in the case of smaller projects, the process of risk management might refer to a simple and prioritized list of high, medium and also inclusion of low priority risks.

In the case of our project here, I would utilize the knowledge I got from research to help the organization build itself on strong bases. Basically, I would dwell so much into laying down important frameworks to ensure that the amount set apart for the establishment of the whole project is fully utilized and create more chances of not exhausting it in the establishment stage (Kerzner, 2017). In this case therefore, when the funds are well utilized, they leave room for the management of any impending risks (Faust, & Raes, 2016). Risk management skills will help me manage what is available for the project to succeed and move on to the next level. In any case, management of risks is among the most important aspects of project plan. Even the most carefully and analyzed projects can find themselves into great troubles. Irrespective of how well one can plan their project, it can always encounter certain unexpected troubles.

Team members or other stake holders could quit from the project or maybe get sick during the establishment period, something which nobody can avoid or maybe set measures against such misfortunes. Also, the resources that one could have been greatly relying on for the success of the project might turn to be unavailable, or maybe the weather of the place could change and become unbearable for the project planning to continue successfully (Kerzner, 2017). In this case therefore, there is need for one to do a risk planning exercise meant to identify potential risks that would possibly cause problems to the project, through doing some analyses on how likely the risks could occur, the take action against the risk to prevent it from happening or maybe minimize the ones that their occurrence can’t be fully avoided. Some of the steps which could possibly be utilized towards risk management are the specific risk identification, evaluation of the risk, setting possible controls of the risk and lastly coming up with ways towards how the risk could be handled.

2. Name and briefly describe 5 different identification tools. (15 points)

Certain tools could be used towards identifying risks before managing them. To start with, are the documentation reviews, which is the standard practice of identifying risks and which is basically related to documents like the lessons learnt, organizational process assets and articles. Secondly, there is the tool related to information gathering and which is a technic similar to the other technics used to collect requirements (Dennis, Wixom, & Roth, 2018). Thirdly, is the brainstorming technique and which is done with a certain group of people who basically focus on identifying risks related to the project in question. Interviewing is also another tool for risk identification, where an interview is carried out with project participants, experts as well as stakeholders to identify the possible risks for the project. Root cause analysis is also among the tools utilized in the risk identification process. Where roots get determined for the specific risks identified and which are further used to identify possible more risks. Lastly, is the SWOT analysis which includes the strengths of the project, its weaknesses, opportunities as well as possible threats (Kerzner, 2017). All of these are identified for the success of the entire project and then the determination of the risks. Other tools included in the risk identification process are the checklist analysis, assumption analysis, risk registration, consideration of the outputs to identify possible risks among many others.

3. Briefly describe the main sources of project scope and schedule risks. (15 points)

Project risk management also includes the identification of the main sources related to the project scope and the related schedule risks (Faust, & Raes, 2016). Some of the sources are, schedule, whereby, whether one gets the software or the hardware out on time, it should be just like it was initially planned. Scope is also another source, which is always a risk by its own, whether or not one has covered all that was expected of them, it will always cost them in the case where any of the important requirement has been missed (Harris, 2017). Also, resource is among the sources of the scope, it’s also an important aspect that is basically unpredictable, one cannot expect resources to be available just as initially planned.

Basically, the initially allocated resources can as well get utilized for different other projects, whereby, one needs to get someone who is basically new, and who will possibly create another problem in both the cost and the schedule (Cagliano, Grimaldi, & Rafele, 2015). Sometimes it may happen in quality in the case where inexperience becomes the issue at hand with the concerned personnel. Additionally, we also have quality, where the deliverable can become of poor quality as a result of some other imposed factors in the whole process and hence making the whole thing a huge risk. Lastly, we have the cost as a source of the scope, whereby the estimated cost could turn to a big risk in the entire project (Kliem, & Ludin, 2019). If in any case there is something one has planned to buy and maybe it’s not available at the moment, it can therefore be proved costly, simply because one has to wait until this particular item becomes available, something which may take a little longer waiting. Away from these risk sources, others could be put together into different types which could include risks to customers, delivery issues and then technical product wrangles as well. Within the reach of every category, particular sources of such issues could basically be realized then therefore their avoidance and reduction measures applied.

References

Cagliano, Grimaldi, & Rafele, (2015). Choosing project risk management techniques. A theoretical framework. Journal of Risk Research, 18(2), 232-248.

Dennis, Wixom, & Roth, (2018). Systems analysis and design. John wiley & sons.

Faust, & Raes, (2016). CoNet app: inference of biological association networks using Cytoscape. F1000Research, 5.

Harris, (2017). Strategic project risk appraisal and management. Routledge.

Kerzner, (2017). Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons.

Kliem, & Ludin, (2019). Reducing project risk. Routledge.