PM 692 Park University Project Risks Discussion Responses

Description

Initial Post

Directions

After reviewing the materials from this week, discuss the basics of risk management. Ensure you are noting the following:

  • What is project risk and why is it important to plan for risk?
  • Define a threat and an opportunity. Why is it important to know what these are on your project?
  • What are the risk response strategies?

Please find an additional reference source and cite the source in your discussion post. Sources must be used to enhance the learning experience. By finding a referenced source, you are enhancing the learning experience by searching for another source of information on the topic. Also, please ensure you are using a source that is peer-reviewed to ensure the accuracy of information (select peer-reviewed journal articles in the Park Library).

Your original post should be in the format of an executive summary (must contain verbiage and bullet points to name the key points). Use APA formatting.

Please respond to each student and use references

Student 1 Tracey

Q: What is project risk and why is it important to plan for risk?

A project risk is a potential and unforeseen trouble spot that may occur when a project is implemented (Larson & Gray, 2020). Some examples of risks are:

  • Scope creep – is when additional work is added that does not fall under the agreed upon requirements or has not been authorized Define a threat and an opportunity
  • Low performance – is when the project does not perform as it was expected
  • Over budget – When the cost of the project exceeds the agreed upon budget
  • Improper resources – When the project does not have the appropriate recourses needed to meet the demands of the project

In research from Carbone and Tippett (2004) failing to plan for risk is planning to fail and it is crucial to have a plan to manage project risks. Risks can cause a project to not reach its goals and objectives or even cause complete failure of the project.

Q: Why is it important to know what these are on your project?

It is important to know the risks on your project because good risk identification creates good project communication which results in good decisions being made on how to manage the risks. By identifying, avoiding and dealing with potential risks in advance, you ensure that your employees can respond effectively when challenges emerge and require intervention (Duggan, 2019).

Q: What are the risk response strategies?

The risk response categories are mitigating, avoiding, transferring, escalating, and retaining (Larson & Gray, 2020).

Risk Mitigation: This response strategy involves taking actions to reduce an organizations exposure to potential risks and reduce the change of the risk happening. An example of a risk mitigation is if a project has a risk of a ransomware attacks, they can have security put in place to reduce the likelihood of these chances.

Avoiding: This response strategy involves adjusting the original projects plan so that the risk is no longer present, this can only be done when the risk can be eliminated. In manufacturing they might not store or use certain products because they are considered dangerous, this is an example of avoiding a risk.

Transferring: This response strategy involves shifting the impact of the threat to a third party. An example of transferring is purchasing insurance for company vehicles incase of a wreck.

Escalating: This response strategy involves raising the risk to others with more authority because you do not have the authority or knowledge to handle the risk. An example of escalating is when the project manager is notified that an employee may be leaving the project, they must notify their HR or PMO to get a new resource identified so that work does not stop.

Retaining: This response strategy involves making the decision to accept the risk and whatever comes with the risk. An example of retaining is when a company purchases a new building they may see that the flooring is bad, but they decide to still purchase the building. They do this then they can budget for the floor to be fixed at another time.

Resources

Carbone, T. A., & Tippett, D. D. (2004). Project Risk Management Using the Project Risk FMEA. Engineering Management Journal, 16(4), 28–35. http://faratarjome.ir/u/media/shopping_files/store…

Duggan, T. (2019, February 19). Why Is Risk Management Important to Project Success? Small Business – Chron.Com. https://smallbusiness.chron.com/risk-management-im…

Larson, E. W., & Gray, C. F. (2020). ISE Project Management: The Managerial Process (ISE HED IRWIN OPERATIONS/DEC SCIENCES) (8th ed.). McGraw-Hill Education.

Student 2 Belinda

What is project risk and why is it important to plan for risk?

There are several risks involved when it comes to a project. There can be an unexpected storm that causes a delay in getting supplies ordered or loss of electricity. The unknown is the reason it is critical to have a risk plan in place for every project. A project risk is an uncertain event that can potentially impact a project, either positively or negatively. Project managers need to create risk response plans that describe the risk mitigation strategies they will use to minimize the negative effect of risk events (Malsam,2021). Having a risk plan in place helps to minimize the effects of a risk such as cost and time. Therefore, a risk response plan is a way to reduce or eliminate any threats to the project.

Define a threat and an opportunity. Why is it important to know what these are on your project?

Opportunities refer to favorable external factors that could give an organization a competitive advantage. Threats refer to factors that have the potential to harm an organization (Kenton, 2021). For instance, an opportunity for a current construction project may be a reduction in the price of steel that reduces the cost of the total project. A threat may be workers on a project that may decide to strike due to drop of benefits, but this also can be an opportunity to lay off certain individuals that may not be needed for the project. As the PM it is just as important to plan for a threat(risk) as it is to look for opportunities.

What are the risk response strategies?

  • Avoid- By avoiding the risk you ensure the possibility of it posing a threat to your project. For instance, upgrading a computer system that has just been released. You may not be able to receive it do to being on back order, so you buy a older system to ensure delivery on time.
  • Reduce- If you accept that you cannot remove the risk, the next strategy is to try to reduce the risk. Testing the new equipment that is installed frequently would reduce risk of it crashing.
  • Transfer- Contracting out a particular aspect of the project to a third party.
  • Contingency plan- have a plan in place if the risk occurs such as if this occurs in Plan A we go with Plan B.
  • Accept- If the risk occurs you need to just accept it. Therefore, unless you’re avoiding the risk altogether, you are using a combination of the reduce (mitigate), transfer, and/or accept risk response strategy by default (Williams, 2021).
  • Take risks- To have a successful project you must take risks. Having a plan to mitigate the risk makes the projects actions post-risk smoother and more integrated.

Kenton, W. (November 11, 2021) Strength, Weakness, Opportunity, and Threat (SWOT) Analysis, https://www.investopedia.com/terms/s/swot.asp

Malsam, W. (October 20,2021) Risk Response Plan in Project Management: Key Strategies & Tips, https://www.projectmanager.com/blog/risk-response-plan-strategies-tips (Links to an external site.)

Williams, C. (2021) 5 Risk Response Strategies You Will Have to Consider After Assessing Risks, https://www.erminsightsbycarol.com/risk-response-s…

Edited by Belinda Schall on Jun 29 at 3:10pm

PM 692 Park University Project Risks Discussion Responses

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