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Project Risk Management 1st Assesment
Project Risk Management 1st Assesment
Project Risk Management 1st Assesment
Surname Ziqubu
Student
Number 168968
Assignment
Number 1
Examination Durban
Venue
3610
E-Mail mzwakhesaneleziqubu@gmail.com or mzwakheziqubu@yahoo.com
035 874 8025 (Work)
076 062 8799 (Home)
Contact
Numbers 076 523 9643 (Cell)
PGDPM Year one 2021
Course/Intake
Declaration: I hereby declare that the assignment submitted is an original piece of work
produced by myself.
Date: 22.04.2021
Signature:
Contents
List of Figures 2
List of Tables 3
01 Question 1 4
1.1 What is a project life cycle? 4
1.2 Risk in Project Life Cycle 5-6
02 Question 2 7
2.1 Introduction 7
2.2 Techniques of risks identification 7
2.2.1 Life Cycle Phase Risk Identification 7-8
2.2.2 Risk Register 8-9
03 Question 3 10
3.1 Introduction 10
3.2 Benefits of Risk Mitigation 10-13
3.3 Golden Rules of Project Management 13
04 Question 4 14
4.1 Introduction 14
4.2 Principles of risk management in relation to Project A risk mitigation strategy 14-15
4.3 Conclusion 16
4.3.1 Importance of stakeholders in managing and/or mitigating risk 16-17
05 Reference List 18
List of Figures
Figure 1.1 : Illustrating the project life cycle 4
Figure 1.2 : Risk in the Project Life Cycle, source: Bobade (2015:58) 6
Figure 2.1: Life Phase Risk Identification, Source: Kloppenborg (2015) 8
Figure 2.2: Example of a Risk Register, Source: Schwalbe (2015) 8
01 Question 01
1.1 What is a project life cycle?
According to Karaulova, T., Kramarenko, S. & Shevtshenko, E. (2008:02), because
projects are unique undertakings, they involve a degree of uncertainty. Organizations
performing projects will usually divide each project into several project phases to
provide better management control and appropriate links to the ongoing operations of
the performing organization. Collectively, the project phases are known as the project
life. Each project phase normally a set of defined work products designed to establish
the desired level of management control. Typically project life cycle consists of 4 major
sections which can be broken down into other key parts of the project. The main
sections and their constituent parts are as follows:
CONCEPT (Idea)
PLAN (Design, Plan, Allocate)
EXECUTE (Carry out the plan)
TERMINATION (Deliver, Review, Support)
The better a project manager identifies and responds to risk, the better the outcome.
That’s why there are never enough risk management tools and techniques to have at
your disposal when planning for a project.
I will elaborate on two techniques which could have been more relevant to the risk
management consultants
2.2.1 Life Cycle Phase Risk Identification
The consultants could have identified risk using life-cycle phases. In the early life-cycle
phases, the total project risk is high because of lack of information. In the later phases,
the financial risk is the greatest (Kloppenborg:2015).
See below table below elaborating the life cycle phase risk identification
The contents of a risk register, as illustrated in Figure 3.2 above, are described as:
List of identified risks:
All potential events and their subsequent consequences as identified during the risk
identification process
List of potential responses:
Potential responses to risk may be identified during the identification process
Root causes of risk:
If possible, identify the root causes of risks
Update Risk Categories:
Some categories of risk may need to be changed or updated to better reflect the risks
associated with the current project
Trigger
Signals or precursors that help in determining I a risk event I about to occur (Schwalbe:
2015). The risk register is a living document. As a risk is identified, it is added. More
information regarding a risk can be added as it is discovered. As risks are handled, they
can be removed because they are no longer of the same level of concern. On smaller
projects, a spreadsheet works fine for a risk register. On larger, more complex projects,
some organizations use databases (Schwalbe: 2015).
03 Question 03
3.1 Introduction
A strong project risk management plan allows managers to look at the entirety of their
project from numerous perspectives including: Resource; Technical; Cost, Schedule;
Scope, Process/Procedure; Internal Threats; External Threats to name a few. Through
a lens of what could go wrong, the project team will identify, assess, respond to, and
assign personnel to monitor each risk worthy of continued observation. Individual risk
responses will roll up into large scale project contingency plans.
However, with “Project A”, risk management approach of mitigating the risk was not
adhered therefore exposing the organization to the risks identified by the report which
caused significant loss to the organization as the schedule overran therefore incurring
huge lost earning and missing the ‘first oil predicted date.
If the organization did adhere to the risks identified by the risk management consultants,
they would have benefited in mitigating the following risks: -
Communication is Elevated
Firstly, data has to be comminuted, the team uses it for decision making. Second, and
of interest to us here communication of risk information will demand its own
communication channel. A properly implemented risk program will specify requirements
for communicating risk information up and across the organization. This means that
project sponsors and key stakeholders are on top of information as it unfolds.
Team Focus
The project planning process in general and the risk management process in particular
will engage and focus team members outside of their respective specialties. I will say
that based on my experience, nothing engages individual team members like being
assigned ownership of a risk and responsibility for its monitoring and with reference to
Project A, it would have helped team members to be more vigilant of the risks therefore
focus on the task at hand.
04 Question 04
4.1 Introduction
Effective risk management involves commitment to risk management by stakeholders,
top management, the project steering committee, the project manager and project team
members. An adequate project management approach. A capable project manager
should take responsibility for risk management, and he or she and the project team
should have an understanding of the technical and non-technical issues and/or
contingency measures should be considered (PMI, 2017)
4.2 Principles of risk management in relation to Project A risk mitigation strategy.
Involvement of Stakeholders
The risk management process should involve the stakeholders at each and every step
of decision making. They should remain aware of even the smallest decision made. It is
further in the interest of the organization to understand the role the stakeholders can
play at each step.
Organizational Objectives: When dealing with a risk it is important to keep the
organizational objectives in mind. The risk management process should explicitly
address the uncertainty. This calls for being systematic and structured and keeping the
big picture in mind. Because stakeholders were not involved, they were not aware of the
risk associated with the project. One of the stakeholders in the Project A are the
organization employees who were involved in the implementation stage. When they
were busy with hook up, commissioning and IAT work, they were all focused in
completing the job (but not aware of the associated risks) however because they were
not informed of the risk associated with the work the stakeholders found themselves
reacting to situations which could have been identified, quantified and managed
accordingly. Therefore, affecting the critical path hence impacting on the date of the
date of the “first oil”.
Supportive Culture
Brainstorm and enable a culture of questioning, discussing. This will motivate people to
participate more.
Continual Improvement
Be capable of improving and enhancing your risk management strategies and tactics.
Use your learning’s to access the way you look at and manage ongoing risk.
4.3 Conclusion
Risk professionals often have difficulty clarifying the role of stakeholders in risk
management. Whether one chooses the route of communication and consultation as
per ISO31000 or Information and consultation according to the COSO framework, the
role of stakeholders in risk management must be clearly defined.
Freeman (2004) defines stakeholders as any groups or individuals who are crucial for
an organization’s survival and can affect and be affected by an organization’s
objectives. Every organization exists to deliver on a particular value, to achieve this the
leadership needs everyone involved to understand risks associated with the pursuit of
delivering that value. In practical terms involving stakeholders in the risk management
process means seeing risk management through the same lens.
Internal and external stakeholders can be any of the following: Company employees:
management and staff, The Board, third parties, Customers, Shareholders (can be
represented by board), Labour representatives. The Project A had stakeholders
involved all of the above mentioned stakeholders
Risk professionals often complain about not getting buy-in from stakeholders, buy-in on
the other hand is not realized by informing people but rather by involving them. The
benefits of involving the stakeholders is that the risk professional can share the value
proposition of the organization with people who are equally interested in the future of
the organization although in some cases for different reasons. Project A should have
involved all of the above mentioned stakeholders so to get the buy in of mitigating the
risk.
Risk professionals should remember that key decision makers in an organization are a
handful of people who very often focus on strategic matters. Risks are better managed
when all who form the value chain are on the same page with key decision makers. The
unfortunate case with Project A is that, the decision makers were not able to make
informed decisions that will mitigate the risks that were associated with the Project A
project.
3 Bobade, A. 2015 Organisational Influence and Project Life Cycle. Available from:
https://wwwslideshare.net/anandbobade/pmp-chap-2-org-influence-and-project-life-
cycle (accessed: 22 February 2021)
4 Larson E.W & Gray C.F, (2017) The Management, The Project Management Process,
seventh Edition, McGraw Hill Irwin
6 Van der Walt, G, and William, (2015), Guide to Project Management, Second Eddition,
Juta & Company ltd.
7 Clements, J.P and Gido, J. (2012), Successful Project Management, Six Eddition,
Cengage Learning.