Project Risk Management - Coursework Example

Project Risk Management] [Course Name] [Student Name] [Instructor] [Class] Project Risk Management Introduction The word risk bears so many meanings in different parts of life. To measure the risk many formal methods are present like the statistical tools or estimates that helps in the human decision making processes like in businesses. The different organizations around the world use methods or processes to measure the chances of occurrence of risks or the changes that could create the risk. There is a special case which is related with risk management which can overlap restrictions of the Project Time Management and Project Risk Management. It requires appropriate attainment of objectives which looks after end results. Additionally considering critical situations there are certain projects in which time is regarded as an essential characteristic in which the developing time is required to be translated in cost of persons. Project risks are regarded as tentative proceedings or circumstances which if occur create a pessimistic effect on the project’s objectives. In contrast to some uncertain events there are some underlying opportunities. Mostly risk management team first priority is to practice the tailored activities of the project which are similar with the organizational traditions, procedures and assets. On the basis of utility functions some milestones are required to be defined during project and at the end of projects. Some of these milestones are categorizes as soft-deadline projects whereas some are regarded as hard-deadline projects (Podean, Benţa, & Mircean, 2010). Contrary to the soft-end ventures the associated hard-end projects require a decline of associated functions having a vertical asymptote quality which revolves around the deadline of the projects for having project completion. In intense conditions the convenience function can even fall down to zero in which projects start losing to the developer and to the client. The current risk analysis methodology assesses risks from financial values. The archetypal risks are interlinked with an enhancement in absolute project costs. For evaluating hard deadline milestones or any end of projects it is essential to make use of the time dimension as opposed to the typical cost-based risk analysis. In such scenario a structured methodology is required to be formulated which focuses on diminishing and justifying project precise delay risks. This is the method which may add to the current cost based risk analysis in projects. Moreover considering methodological risks the moderation techniques which are utilized are required to bring substantiation of risks along with team effectiveness, varied un-correlations or miss-consideration about the position of the team members in the group. It is found that a detailed methodology is required which encourages common understanding of the risks for participants. It has the ability to crystallize the essence of difficult situations and taking a final decision in complex situations along with some probable opportunities which can be unlocked. Additionally considering the scientific risks, some self-control techniques are able to fetch substantiation of risks as the team efficiency, varied un-correlations or misinterpretation about the part of the team members in the team. In complex projects which follow a chronologic structured approach may ease the moderation. Because the structured discussions assist in reviewing the project, hence it is better to initially assess first the unpredictability of the activities (Podean et al., 2010). Risk Management is regarded as the vital project management process which makes use of abundant tools that are accessible to maintain different phases of the risk management process. Various studies have been performed by researchers for identification of the specific tools which are widely being used and the one which are linked with flourishing project administration generally while on the other it is also focused towards efficient project risk management particularly. The study which we will be evaluating in this paper is based on a survey which is based on a sample of project managers belonging to various software and high-tech industries. The questionnaires were compiled and the responses were analyzed for assessing the tools which can easily be used during project management performance in particular the ones which value the involvement of risk management processes. A survey recently conducted by Williams was based on 241 references in which the author was in search of perfect tools and techniques which can contribute some value to the risk management processes. However it is also evident that the entire project management life cycle also follow a particular process which itself includes project risk management. The various phases which are interlinked in this whole process include planning, definition, through its preparation, implementation and control phases up to its achievement and conclusion. The Software Engineering Institute which is regarded as a primary foundation of methodologies for administrating software improvement projects perceives project risk management as a cycle having distinctive phases. These different phases are identification, investigation, response planning, tracking and organization which are all interlinked by a continuous risk communications. Certainly every project risk management process entails some tools for its implementation which is further categorized into sub-steps. These sub phases are analysis, planning, control and management tools which all involves specific investments. The incurred cost is concerned with the personal and at the organizational level for understanding and learning of using the tool, acquiring necessary information such as technical expertise, computing skills database and operating system knowledge (Raz & Michael, 2001). The main purpose of this study is to comprehend the tools which have greatest potential which further contributes towards an effective project risk management process. The outcome of the survey presented significant assistance with respect to this issue. The first aspect which has emerged is that tools are regarded as significant aspect of a risk management process hence they must always be initially decided. Next is the adoption step which requires a careful analysis of the ranking table of tools. Hence before finalizing any decision it is required to adopt tools which are linked with better performance of project management practices or the ones which are used by practitioners who already have a high-quality risk management procedure. Apparently, there are costs and lead times related with the acceptance of tools and practices, and these, along with other factors should be taken into contemplation (Raz & Michael, 2001). The process of risk management is regarded as a proactive step. Risk is chance of occurrence of an event that will have an impact on the objectives of the business. Where the event is incident or a situation occurred in particular time and place. The qualitative description of the probability of such events is called the likelihood. The outcome of such event quantitative or qualitative is called the consequence of the occurrence. There are chances present that the single occurrence have number of impacts on some place. The risk treatment then comes next which includes the selection and implementation of the appropriate strategies and plans to deal with occurrences. The policies standards and procedures are made to minimize the adverse effects of the loss. To reduce risk such plans are made and implemented physically as tasks or activities to manage the loss after the occurrence or mange the risk control before any disaster (Benţa, Podean, & Mircean, 2011). The evaluation of the risk determines the major damage to the asset the probability of any risk is the evaluation of the prospect of any occurrence actually happening. On the other hand impact is the evaluated effect that tells about the actual loss or about the affected part of the business. The resources, time, personnel, qualities or benefits are the elements of impacts. Risk management consists of the probability multiplied the impact of occurrence. The risk management tools allow the planners to tackle the uncertainty with generating the metrics, prioritizing and developing the risk management process. The probabilistic risk management is a comprehensive way to calculate the risk attached to any organization. The risk response strategy is made to ensure the safety of the belongings of the business personnel or assets both. The preventive measures are identified in this part of the plan to make a strategy before the disaster strikes the overall structure of the business. The basic plan will be followed by the additional preventive measures to act not only on the potential areas but to any detailed affected areas of the business. The disaster prevention and preparedness starts at the top management level. The senior management’s behaviour towards risk management and safety then penetrates through the hierarchy of the organization. Which means the direct and efficient response is very important in the response planning of the risk management plans. The risk should be accepted by the organization and retained to be treated and plans should be made to manage the funds for the recovery process and the other necessary arrangements. The maintenance, audit and compliance programs are required for the process. The proper supervision of professionals and experienced people is required because they know how to deal with the risks or events affecting the organization as they know the nature of the occurrence by experience as every event have different nature and consequences. The staff should be trained for such disasters the contingency plan and the continuity plan must be made as the business should go on with its daily activities and one part should not affect the other activities of the business, this way the chances of loss or the extent of loss can be minimized. The transfer of the risk strategy helps in the prevention of the loss. It allows the business to share a decided part of the risk through the contracts, insurances, outsourcing, the partnership agreements or joint ventures etc. This will help in future but these should be made at the time of commencement of the business which will secure the maximum loss chances (Benţa, Podean, & Mircean, 2011). The management should check the possibilities in the organization and try to cancel such activities which will cause the loss in future to avoid risk and should not proceed with such activities being careful management. Such activities should not be practiced once the risk is calculated by the risk assessment unit. It is designed to manage the safety elements in the workplace in an organization. The safety management system provides the control to maintain risk control and assurance of prevention of loss. It is a systematic approach handles with the comprehensive processes to avoid the sudden reactions and gives security and safety. It provides the safety of setting goals, plans and performance evaluation. The safety management system is like the essential part of the organization the organization is incomplete without it and it is the culture of any business. The safety provides the reduction of the risk of any loss. The safety management system is an ethical legal and financially effective decision that a company makes to add an extra advantage and goodwill to its name. Safety system is a moral responsibility of employer to create a safe and sound environment for the staff to work in and to encourage them enough to attract more experienced intellects to the company. This will avoid the risk of losing the senior and experienced members of the team. Organization structure’s responsibilities and accountabilities are defined in the organizing part of the safety management system. Goals and objectives are achieved with the planning and implementation of the processes and those objectives are defined to tell how these hazards can be prevented by the management of risk. Conclusion The risk management is a process of evaluating the risk and then solving it as a problem on the other hand the safety management system is a process that was implemented for the assurance of avoiding the risk or to eliminate the chances of any problem in the organization. So, these both processes are incomplete without each other the risk management after assessing needs a safety precautionary measure that can be provided by the safety management system. The safety management system is incomplete without the predictions of the risk management done by proper research. These both terms are often considered as independent but these are linked together. These both processes are essential for each other. These both terms just don’t work together however they have the same goals and objectives. The outcomes will be shared by both the departments and processes. References BENŢA, D., PODEAN, I. M., & MIRCEAN, C. (2011). On Best Practices for Risk Management in Complex Projects. Informatica Economică, 15, 142-152. PODEAN, I. M., BENŢA, D., & MIRCEAN, C. (2010). Overlapping Boundaries of the Project Time Management and Project Risk Management. Informatica Economică, 14(4), 156-163. Raz, T., & Michael, E. (2001). Use and bene®ts of tools for project risk management. International Journal of Project Management, 9-17. Read More