PROJ6003 Project Execution and Control-Part B: Risk Management Report
Part B: Risk Management
Create a risk management report for the given case study used in Assessment 1. In your report, include:
1. Risk identification and impact assessment
- Identify possible risks for the case study and critically analyse the impact of these risks.
- Use a risk probability and impact matrix to rate and prioritise the risks.
- Develop appropriate response strategies to effectively manage identified risks.
Complete a risk register for the case study.
2. Risk management reporting
- Identify and explain how stakeholders will be apprised of the project’s ongoing risk management activities.
Risk Management Report
The Lyle Construction Project case study has severe problems with the completion of the project. The project manager Don Jung seemed to be running the project without consultation with other project members. There are several risks in the project that are going to hamper the project outcomes. The risks register and the probability and impact matrix have helped prioritize risks, and it has helped to analyze their impact on the project outcomes. In the following, each risk and its analysis have shown how they are affecting the project outcomes in the short term and long run.
Risk Identification and Impact Assessment
Risks for the Case Study and Analysis of their Impact:
The Lyle construction project case study shows some apparent risks that have threatened the useful and timely completion of the project. Some of the chosen risks from the case study are mostly related to design risks. Other risks are time and budget-related risks. Under these risks, there is a total of eight risks. These eight risks are the selection of office, overrunning man-hours, lack of communication, absence of fulfilling deadlines, compromise on quality, lack of coordination across functional teams, the sick design package, and lack of consensus in the project activities and functions.
The impact of these risks is from low and moderate to high. It shows that five of these risks belong to high impact risks because they are fundamentally dangerous for the project outcomes. The project has a matrix organizational structure where different functional teams work together for the completion of the project. Overrunning man-hours is the issue in the project where the purchasing department has concerns regarding this. The point of selection of office also affected negatively. These issues raised concerns among different departments working in the project. It was the result of a lack of communication in the team. The case study shows that members are busy in numerous meetings, but they ended with no effect. It was the result of a lack of coordination across functional teams, absence of fulfilling deadlines, and lack of consensus in the project activities. These risks have caused an increase in cost. It is also a fear that the project will miss deadlines. Strategies to prevent these risks include effective communication and revision of schedule and financial estimates (Donnelly, Clement, Le Heron, & George, 2012).
Risk Probability and Impact Matrix:
The following is the risk probability and impact matrix to rate and prioritize identified risks. There are eight risks in risk probability and impact matrix. Two risks have a low rate, one risk is a medium-level risk, and five of the identified risks are high. The priority of risks has followed a simple principle. Two low rated risks are the selection of office and overrunning man-hours in the purchasing department. These risks are small because they do not affect fundamentally to project outcomes. Lack of communication is a significant risk, but it is in the medium level category. Other risks in the red color are high risks because they are sabotaging project outcomes fundamentally. The project is not performing well because of these risks in the red color (Usuda et al., 2016).
| Impact | ||||||
| Trivial | Minor | Moderate | Major | Extreme | ||
| Probability | Rare | Selection of Office | ||||
| Unlikely | ||||||
| Moderate | Overrunning man-hours in the Purchasing Department | Lack of Communication | Lack of Coordination across Functional Teams | |||
| Likely | Absence of fulfilling Deadlines | Poor Design Package | ||||
| Very Likely | Compromise on Quality | Lack of Consensus in the Project | ||||
Appropriate Response Strategies to Manage Identified Risks:
The risk register in the following has response strategies to manage identified risks. The selection of response strategies has been made based on communication, effective team meetings, and request for revision of deadline to the investor, and setting quality standards. These response strategies are not complex to implement, but they have become challenging to implement. The reason is that the project team lacks commitment and dedication to work as an integrated unit. There are severe issues in the working of the project team where the project manager has emerged as a notable owner of many risks. There is a lack of coordination that can be solved if there is a productive meeting. Meetings have already been taking place, but they are not enough. There is a problem with the ineffectiveness of the matrix organizational structure (Soofifard & Bafruei, 2016). The structure invites members for the project from different departments. These members have not been working as one unit, unfortunately. It is essential and inevitable for the project team to sit together and mull over how to work together. They have to request the investor of the project to give an extension to the project. These response strategies are simple to implement, and it is also the embracement of the fact that things have not crossed the limit yet. The project team can deliver the project and come on track. It needs, and a revisit, and these response strategies would help the team in this regard (Kwan & Leung, 2011).
Risks Register:
The risk register has elements of main risks, owner of risks, reasons of risks, risk assessment, risk response strategies, and cost of the strategy. These elements help have an in-depth look at each risk so that the magnitude of each risk may guide the project team (Budzier, 2011).
| Risk Assessment | |||||||||||
| Sr. No. | The main risks | Owner of Risk | Reason/ Cause | Effect | Probability | Impact | Level of Risk | Risk Response Strategy | Cost of Strategy | ||
| Design Risk | |||||||||||
| 1 | Selection of Office | Project Manager | Don did not consult with the team | Made distance between project teams of Lyle and Atlay | 0-25 % | Low | Ignoring this risk until a new office is available near both project teams | 0 | |||
| 2 | Compromise on Quality | Project Manager | Cutting corner strategy by Don | Work is not suitable as per quality | 40-70 % | High | Setting quality standards with the agreement of all project team members | 20 thousand | |||
| 3 | Overrunning man-hours in the Purchasing Department | Project Manager | Don’s urgency to meet deadlines | Resources are getting lost and wasted | 5- 40 % | Low | Reaching an agreement with the purchasing department and project manager | 20 thousand | |||
| 4 | Lack of Communication | Project Team | Matrix organizational structure | There is no consensus among different functional teams of the project | 5-40 % | Medium | Open and effective meeting plan with all project members | 0 | |||
| 5 | Lack of Coordination across Functional Teams | Atlay Company | Each functional team is not cohesive with the team | Confrontations are rising in the project | 40- 70 % | High | Addressing concerns of each departmental head and project manager has to respond | 20 thousand | |||
| 6 | Poor Design Package | Project Manager | Don Jung | Delay in Project | 40- 70 % | High | Revisiting the design package and considering suggested changes | 100 thousand | |||
| Time Risk | |||||||||||
| 7 | Absence of fulfilling Deadlines | Project Team | Failure of the structure of the project team | Delays and lack of cohesion within the team | 40- 70 % | High | Application for a request to extend deadlines / Hiring new employee | 100 thousand | |||
| Budget Risk | |||||||||||
| 8 | Lack of Consensus in the Project | Project Team | Cost increasing because of not meeting deadlines | Cost is increasing | 40- 70 % | High | Aligning time and cost and then revision of the budget estimate | 120 thousand | |||
Risk Management Reporting:
In the following, risk management reporting has guided how to report risk management activities. In the following, risk management reporting has taken the case of how to communicate and explain risk management activities to stakeholders. Identification and explanation of these ways are in the following.
Stakeholders and ongoing Risk Management Activities:
Present risks are detrimental to functioning on the project. The first thing to be explained to stakeholders is that the project is lagging behind schedule and cost. Although, the project may have quality concerns as well because the project team has raised concerns over the design package. But these quality issues are not appropriate to explain before stakeholders. The primary stakeholder of the project is the one that has awarded the project. Both companies are essential stakeholders from the project’s point of view (Amadi, Carrillo, & Martin, 2018). Although, the rest of stakeholders may be community, government, and other stakeholders, the most important one is the investor of the project. It is the most effective way to inform the project’s ongoing risk management activities that the project should invite stakeholders. A stakeholder meeting may be helpful to explain, and it would also act as a check over the project team. As a result, the project team would realize the importance of working together as one team. Any issue with schedule and cost may emerge, and it is not useful to hide any risk from stakeholders. A proactive approach to take them on board would help the project in the long run.
Conclusion:
The report concludes that risk probability and impact matrix, risk register, and risk management reporting have helped to know the nature, scale, and impact of risks in the Lyle construction project. The project has assessed and analyzed these risks and has guided the project team to learn from mistakes. The report recommends addressing these risks so that they cannot become a significant threat to project completion. It is the objective of this risk management report.
References
Amadi, C., Carrillo, P., & Martin, T. (2018). Stakeholder management in PPP projects: external stakeholders’ perspective. Built Environment Project and Asset Management, 8 (4), 403-414.
Budzier, A. (2011). The risk of risk registers – managing risk is managing discourse not tools. Journal of Information Technology, 26 (4), 274-276.
Donnelly, R., Clement, J., Le Heron, R., & George, J. S. (2012). Redesigning risk frameworks and registers to support the assessment and communication of risk in the corporate context: Lessons from a corporate risk manager in action. Risk Management, 14 (3), 222-247.
Kwan, T. W., & Leung, H. K. (2011). A Risk Management Methodology for Project Risk Dependencies. IEEE Transactions on Software Engineering, 37 (5), 635-648.
Soofifard, R., & Bafruei, M. K. (2016). An optimal model for Project Risk Response Portfolio Selection (P2RPS) (Case study: Research institute of petroleum industry). Iranian Journal of Management Studies, 9 (4), 741-765.
Usuda, K., Ueno, T., Ito, Y., Dote, T., Yokoyama, H., Kono, K., et al. (2016). Risk assessment study of fluoride salts: probability-impact matrix of renal and hepatic toxicity markers. Biological trace element research, 173 (1), 154-160.
