ITPM 613 American InterContinental University Project Risk Control Paper Assignment Details
Assignment Description
Your company has assigned you to work on a project plan for a new internal support system. This system will be expected to track formal contacts between company software contracting teams, internal management sponsors, and their external clients. In addition to the technical aspect of the project, there is significant doubt surrounding how well the project teams and the external clients will accept the changes mandated by the use of the new system, and what factors will impact its effectiveness.
Your assignment is risk control planning.
In 3-5 pages, complete the following:
Produce a risk register.
At a minimum, each risk must be assessed qualitatively.
Provide a memorandum detailing in-depth assessment of one of each of the four recognized types of risk control measures.
Reference all sources using APA style.
This assignment will also be assessed using additional criteria provided here.
Please submit your assignment.
For assistance with your assignment, please use your text, Web resources, and all course materials.
Reading Assignment
Textbook Readings: Kerzner, Chap. 16-17
Textbook Readings: PMBOK, Chap. 11
You may be required to enter the e-book email and password you created to gain access to download and read chapters from your e-book
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A Guide to the Project Management Body of Knowledge (PMBOK® Guide) by Project Management Institute e-Book – VitalSource PMI 6 9781628253900 2002C ITPM613-01
Project Management: A Systems Approach to Planning, Scheduling, and Controlling by Kerzner
e-Book – VitalSource Wiley 12 9781119165361 2002C ITPM613-01 6/2/2020
Asset Page Analyzing Project Risk
Analyzing Project Risk
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Introduction
Risk assessment is the activity of reviewing the list of possible risks and determining which ones will
be the focus of risk management activities. As you identify the list of possible project risks, you may
create a list of 50, 100, or even 200 possible risks. This list will rapidly become overwhelming and
unmanageable. Risk assessment helps you focus on the risks that could have the largest impact on
the project and that have the greatest risk for occurrence.
Prioritizing the Risks
The rst step of risk assessment is to review your list of project risks and ensure it is complete.
Second, you must understand the project’s overall priorities and constraints. When you began to scope
and plan the project, you should have de ned the constraints of the project and their relative
importance. For example, working with the project sponsor, you may have determined that hitting the
project’s target scope is more important than hitting the project’s target date or that meeting a certain
quality level is more critical than working within the project’s budget. Starting with your most critical
constraint, analyze and evaluate the risks related to it.
The third step is to prioritize the project risks. For each risk, estimate and assign a value or level for the
probability of a risk occurring and the impact of the risk on the project when it occurs.
Probability measures the likelihood of a particular risk occurring on the project. Impact is the size and
type of disruption your project will encounter if the risk occurs.
Risks that fall into the high-probability and high-impact quadrant are the highest priority risks. Risks
that fall into the low-probability and low-impact quadrant will most likely not need any further attention.
Risks that have a medium probability and/or a medium impact require additional analysis to determine
their priority.
Risk Assessment Techniques
Qualitative risk analysis, semiquantitative risk analysis, and quantitative risk analysis are the three main
techniques that are used to prioritize project risks. The techniques you use will vary and will be based
on the
size and/or duration of the project.
organization’s tolerance for risk.
constraints of the project.
Therefore, you need to understand these risk management in uencers before delving into greater detail
in your risk analysis. An organization’s risk tolerance is a critical in uencer. Furthermore, not only does
the organization have its own cultural perspective toward risk, but your team members, customers,
stakeholders, and sponsor also have their own risk tolerance levels.
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Asset Page Analyzing Project Risk
Qualitative Risk Analysis
Qualitative risk analysis is the process of assessing risks using a very simple scale, such as high,
medium, and low. This type of risk analysis is typically completed using personal and organizational
experience rather than mathematical models. It is also the method that is the most intuitive and most
commonly used.
Qualitative risk analysis is done by assigning a value of high, medium, or low for the probability and
impact of each identi ed project risk. The results are then plotted in a matrix or on a quadrant graph.
For example, suppose that you have employed a vendor to do a software customization for your
project. Past experience has indicated that this vendor may not deliver the software customization by
the designated delivery date. If this occurs, your project will be jeopardized because you cannot move
forward until you have received the software customization component. In your analysis, you may
consider this risk to be high probability and high impact. The risk would be charted as shown here:
Keep these general guidelines in mind:
Risks that fall into the high-impact/high-probability quadrant are considered high-priority risk
events and should be addressed aggressively.
Risks that fall into the low-impact/low-probability quadrant are typically lower priority risks
and can be addressed less aggressively or ignored.
Everything else must be furthered analyzed and most likely will need to be addressed.
Sometimes the company, sponsor, et cetera has a tolerance level and will allow the lowhigh/high-low project risks to be ignored.
In projects of small to medium size, the qualitative analysis technique will address the majority of the
risks. However, on larger projects, this technique will give a very good high-level overview, but it will
most likely need to be con rmed by semiquantitative techniques.
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Asset Page Analyzing Project Risk
Summary
Risk assessment is often thought of as a di cult and complex activity. It isn’t, as long as the proper
perspective is taken. Keep the following points in mind:
Identify the risks that could realistically be encountered.
Understand the source of the risk and then determine the probability of it happening.
Determine the possible impact the risk would have to the project if it occurred.
Use a scoring method that is understandable to your project team, stakeholders, and
sponsor.
Focus on the most critical constraints of the project and put your attentions there.
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Asset Page Aspects of Risk Management
Aspects of Risk Management
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Introduction to Risk Management
Risks are future events that will have an impact on a project. Risk management, especially proactive
risk management, is a set of critical project management processes that are seldom recognized or
practiced by new project managers. New project managers are unaware of the practice or they do not
think it is necessary for their project. Their project is too small, inexpensive, short-lived, or noncritical.
This is a judgment error. All projects have one or more risks that need to be identi ed, quanti ed,
monitored, and controlled. Larger projects may need a project manager just to manage risks. Smaller
projects still need to include risk management, but on a smaller scale.
Factors of Risk Management
There are several factors involved in risk management, including the identi cation of risks. Identifying
risks is very di cult for novice project managers because they do not have the depth of experience it
takes to realize all the things that can go wrong with a project. Bringing other people into the
identi cation process improves the probability that all risks will be identi ed. This can be achieved in a
facilitated meeting with everyone present, or in individual interviews. Project managers must ascertain
which technique is best for their project and environment.
Quanti cation of Risks
It is not enough to just identify a possible event. Project managers also need to understand the
magnitude of a risk to prioritize it. Quantifying the risk by identifying its probability of occurring, and the
amount of impact it can have on the project, helps the project manager understand how to manage the
risk.
Monitoring of Risks
If risks are identi ed and quanti ed, then the project manager monitors the risk management plan on a
regular basis to see if any new risks have been identi ed or removed, if the probabilities or priorities
have changed, and if any risks are imminent.
Risk Control and Response
How the project manager and team responds to a risk is a critical step in managing the risk. The steps
they will take are created before the project starts and is included in the risk management plan. This is
done so that no time is lost when the risk occurs. Practicing what will be done when a risk occurs can
be included as steps in the project plan to prepare the team ahead of time; a re drill is an everyday
example.
Risk Management as a Recognized Best Practice
Consequently, creating and following a risk management plan is a recognized best practice. It has been
proven to be valuable in helping the project manager to deliver high quality projects, on time and within
budget.
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Asset Page FAQ: Risk Management Techniques
FAQ: Risk Management Techniques
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Question 1: What is the Delphi method of interviewing?
Answer 1:
The name of this technique is taken from the Greek oracle at Delphi. The oracle was a person,
presumed to have special mystical powers, who offered predictions about the future. Supplicants
would ask questions of the oracle, and the oracle would answer as best she could, based upon how the
question was asked. Often, the oracle would reply in riddles if the questions were not posed correctly.
The Delphi interview method is used to gather expert information about probable future events. The
interview is structured and designed to elicit opinions about future outcomes, not facts. The
interviewee responds to the questions using his or her experience from the past and knowledge of the
present to predict what will happen in the future.
How the questions are structured, the order in which they are asked, and how they are asked are
essential to receive the best answers. Understanding human psychology and having advanced
listening skills are useful in planning and conducting the interview. Questions must be stated in such a
way as to not in uence the interviewee’s responses. Care must be taken to accurately capture and
document the interviewee’s responses. Often, the same question is asked in different ways throughout
the interview to validate responses.
Question 2: What is a JAD session?
Answer 2:
JAD stands for joint application design or joint application development. It is a facilitated meeting that
includes all of the project’s stakeholders and the customer. If this is impractical, such as too many
people or too great a geographical dispersion, people who can represent each group’s interest should
attend the meeting. Sometimes, a JAD session is spread over a series of days or even weeks.
JAD sessions are frequently used to elicit business requirements; however, they can be used at almost
any point in a project. It has been found over the years that when stakeholders are involved in the
planning and execution of a systems development project, the quality of the product goes up and the
cost of the project goes down. This is mainly due to the reduction of rework caused by incomplete
requirements, misunderstandings, and inaccurate assumptions. Certainly, there are many other
techniques that improve quality and lower cost; JAD is just one of them.
The qualities of a meeting that make it JAD are as follows:
Decision makers must actively participate. Decisions are made in the meeting, and it is
imperative that the people in the meeting have the authority to make the decisions and the
power to ensure they are implemented appropriately
A trained facilitator runs the meeting. This is not necessarily the project manager and often
should not be. A trained facilitator is an expert at running meetings. He or she ensures that
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everyone participates, that decisions are based upon consensus, that the meeting is
planned and communicated via an agenda ahead of time, and that the meeting starts and
ends on time. He or she also ensures that proper meeting etiquette is followed: discussion
remains professional, and any disruptions are immediately handled and eliminated from the
meeting
A scribe is appointed to take minutes. JADs usually take more than one day and produce a
lot of information that is on a white-board, easels, and sticky notes. These must be captured
and organized and distributed to the JAD members prior to the next meeting. Decisions that
are made must be stated and ensured that they are communicated clearly and correctly.
The best person to perform the role of scribe is one that is trained to do the job, understands
the terms being used, and is familiar enough with the project objectives and issues to
capture and organize the information correctly.
All participants commit to the being at all JAD meetings. This is often a daunting task,
particularly if high-level decision makers are in these meetings, and the meetings take
anywhere from one to ve days. It is crucial, however, that all participants are present at all
meetings. Some facilitators will send each participant a commitment document to sign prior
to the rst meeting. In it, the meeting objective, rules, and expectations of all the participants
are itemized. Only those people that are able to sign the commitment document are allowed
in the meetings. A way to further ensure participation is to publish the JAD meeting
schedule and the people who are expected to attend.
Question 3: What is the silent auction technique for risk identi cation?
Answer 3:
A silent auction is a technique usually used in conjunction with or in place of brainstorming as part of a
JAD session. The objective is the same: Produce a list of categorized and prioritized ideas to resolve an
issue or identify or quantify a risk.
Brainstorming sessions are public. That is, they are conducted with people speaking in an open
meeting. A silent auction is conducted without any public discussion. This is usually preferred over
brainstorming, when public discussion could be lengthy and involve con ict among the participants. It
ends in a consensus decision.
A silent auction for risk identi cation and quanti cation is conducted as follows.
Each participant is given a marker, and either a set of index cards and pins or sticky-type
notes.
The facilitator states the purpose of the auction. In this case, the statement might be: “What
risks could occur on this project?” The participants are given a time limit, such as 10
minutes, to answer this question.
Each person, without discussion or collaboration, writes down each risk he or she thinks of
on a separate card or note. These should be just a few words, such as “ABC delivery late” or
“Lose design expert”.
At the end of the time limit, each person is asked to place their risks on a blank board at the
front of the room.
People are invited to come forward and group the risks that seem to be the same after all
are posted. There is still no discussion.
The facilitator validates the grouping by asking each person in turn to come up and make
any changes they think are necessary. A time limit is set and there is still no discussion.
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The facilitator chooses one card that represents the group and places it on a separate
board.
People are asked to review the facilitator’s choices and make any additions to them. A time
limit is given and there is still no discussion.
This process can be repeated until a stable list of risks is identi ed and no one has any more
changes to make.
The facilitator reads the nal list to the participants and adds it to the minutes.
This same technique can be used to determine risk quanti cation and risk response. The only time
there should be discussion is if there is one card that seems to be different from all the others. The
facilitator might ask that person to describe what they were thinking about so that the rest of the group
understands it.
Question 4: What does a risk checklist look like?
Answer 4:
A company’s risk checklist can be very simple. It could just be a list of past project risks that occurred
with a checkbox next to it. The project manager reviews the list and check the box if that risk is
applicable to their project. A better checklist would include all risks identi ed in past projects, whether
or not they occurred.
The best checklist goes beyond this and tries to identify any type of risk that could occur on any
project. Typically, these are categorized by source, such as
Resources
Vendor
Customer
Technology
They can also be categorized by phase of life cycle, such as
Requirements
Design
Coding
Testing
Some of the best checklists are not lists of risks, but questions about the nature of the project. Such as,
“Does the vendor have a reputation of being late?” or “Is the requested target delivery date
unreasonable?” Each of the questions have two boxes beside them; one marked Yes and one marked
No. If the project manager checks the Yes box, then there is a risk to the project that must be managed.
In each case, the risks that are identi ed from the checklist are transformed into appropriate language
for the project, and then entered into the Risk Management Plan.
Question 6: What happens if a risk is so severe that the cost of removing it is too high?
Answer 6:
If a risk is identi ed that is so severe that the cost of removing it is too high, then the project steering
committee (the project sponsor, customers, major stakeholders, and other decision makers) must be
informed immediately if the likelihood is high. There are several options depending upon the nature of
the risk:
The project, or a part of it, could be outsourced to a company that can assume the risk.
A partnership may be formed to reduce the level of the risk, such as with a vendor or the
customer, to share the cost of the risk if it occurs Contractual agreements could be written
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(or rewritten) to include penalties for non-performance.
An insurance policy can be acquired.
The project could be cancelled.
The steering committee assumes the risk.
Question 6: What is a what-if analysis?
Answer 6:
What-if analysis explores the possibilities of a project’s outcome, based upon differing parameters.
Many project managers informally use what-if analysis when building their project schedule. They
explore the impact of changing task dependencies and shifting resources to determine the best
schedule for their project. Typically, project scheduling tools automatically assist this activity by
utilizing the critical path method.
What if analysis can also be used to quantify the effect of a risk event. These are complicated
procedures that are not easily or quickly conducted by hand; therefore, tools are used to perform the
procedures automatically.
There are many tools that can be used to perform what-if analyses. Many automated project
scheduling tools provide a built-in, what-if analysis function. Some of them provide statistical functions
to estimate costs. The most commonly taught and used is a triangular distribution, based upon
discrete values of best case, worst case, and most likely (Mean = a + 4m + b). The Monte Carlo
function is sometimes offered in a scheduling tool. It provides a continuum of possible outcomes,
based upon random number theory.
Use of decision trees, or probability analysis, is another technique that is sometimes provided in a
tool. If a project is not too complex, they are often created by hand, because they can be quickly
developed. It is based upon probability theory, and provides a range of possible outcomes. Discrete
events are assigned possible outcomes with values. Probabilities are then assigned to the outcomes.
Probabilities are usually gathered from Delphi interviews or experiential data. The effect of each
outcome is the probability percentage multiplied by the …
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