Categorize and Quantify Components Identified Risks

Question: Developed your knowledge of risks and risk management. Building on your research, appraise your driveway resurfacing project and begin the process of risk identification. To begin your paper, your first step will be to identify as many risks as possible. Categorize and briefly summarize the key components of a risk analysis and those risks that you believe to be appropriate for your project. You may need to make assumptions about the project. Just be sure to document them in the description of the risk. Consider both project and product based risks along with external and internal risks. Distinguish risks to the project budget, completion schedule, resources and the product's quality. Quantify the risks as you categorize them. Answer: Risk Management In project management perspective, management of risks is referred to as the process of understanding, identifying and analyzing potential risks which might occur during the execution of a particular project, evaluating and prioritizing the risks and identifying alternative methods for assessment and control, objectives for maximizing the rate of achieving the project goals and minimizing or eliminating the rate of risks to occur. The process of risk management in a project involves several steps such as Risk Identification, Prioritization, Planning and Scheduling, Tracking, monitoring and controlling the risks (Callis, 2015). Risk Analysis Process The process of risk analysis requires problem solving skills. Risks are prioritized and assessed. The steps are: Identifying risks: involves several techniques of risk identification which are described below in detail (Campo, 2012). Assessing the risks: detect root causes of the risks that have been identified Develop risk responses: the project team figures out possible ways to manage the risks and remedies to recovery from the risks as well as prevention methods. Develop plan for risk prevention: the ideas and alternative responses are transformed into contingency plans (Deventer, Imai Mesler, 2013). Risk Identification Risk Identification is the process of identifying number of potential risks by the risk management team so that it is possible to take necessary precautions and follow approaches where least risk is included. Risk identification is an iterative process which means it is undertaken multiple times over the life cycle of a project. The risk identification process is conducted by the management team in order to identify the chances of occurrence of risks at an early stage. This process significantly increases the chances of completion of the project within the deadline and budget and meets the desired quality (Given, 2015). The main objective is to identify the possible risks that might be affecting the execution of project. Thereafter, each alternative risks are analyzed and documented in detail (Iverson, 2013). There are several risk identification tools and techniques available that are used to detect potential risks: Reviewing SRS (Software Requirement Specification) and project documentations Gathering information using techniques such as Delphi Technique, Brainstorming technique, taking interviews, root-cause analysis etc Diagrammatic approach: analysing cause-effect diagram, UML activities diagrams, process flow charts etc SWOT (Strength-Weakness-Opportunities-Threats) Analysis Expert Analysis and Judgement (Machado, 2012). Checklist and assumption analysis, analysis of similar projects undertaken earlier Categorizing and Quantifying Identified Risk Components Internal Risks There are a number of internal risks identified in a business project scenario. Internal risks are those that are originated within the organization. It can be categorised as follows: Not having enough financial resources to meet the requirements. A suitably efficient organizational infrastructure determines the success of a business. It includes the facility proper of software and IT infrastructures, availability of servers and tech support etc. The additional issues include ample supply of electricity and other necessary equipment for the development process. The employees or staff issues such as sudden termination or resignation of personnel, prolonged absence due to sickness or other reasons, internal politics, mismanagement of staffs can be the cause of potential downfall of a business or project (Meyer Reniers, 2013). External Risks The origin of external risks falls outside the scope of an organization or project team. The characteristics of external risks make it difficult to predict or control. Risks in this category include the economy. There is a great impact of economy on a projects or businesss success. Other factors such as the possibility of occurrence of bankrupt, crimes, and non-cooperating vendors directly drive the effectiveness of a project. Change in governmental policies and regulations are another major factor needed to be considered. Other mentionable risks are not keeping up with the advancement of technology, motives of company shareholders etc. Even though external risks are comparatively harder to identify and assessed, both internal and external types of risks are required to be assessed so that it helps in the long-term management and a satisfactory completion of the project (Price MacNicoll, 2015). Product Risks There might be significant amount of risks involved in product and technologies fields. Some of the product and/or technology risks can be building wrong UI (User Interface) which in turn requires the process of redesigning and reimplementation (Sadia, Rizwan Beg Faisal, 2014). Gold-Plating: If a project needs extra requirements and functionalities which results in continuation of the development phase over a longer period of time without any positive results and often unnecessarily prolonged duration of time schedule (Zhang Wu, 2012). Often it is the case that the selected technology for a particular project is not suitable for the end-users use or even is not properly compatible with the given problem. There might be situations where the technology being used does not provide the scope for interfacing with other systems. These problems add to the extension of project schedule. Products which are developed with zero tolerance of failure are often danger to the project. These products have the potential to damage the execution of an entire project system. There should be alternatives and available solutions for the product to recover from a failure. Often products which are not tested properly are identified as causing potential threats to the business. Hence the end products should always go through all the testing mechanisms and the test results should be well documented for the purpose of future use (Zhao, Li, Duan Li, 2014). Project Risks The project management risks can be classified into a number of categories based on the type scope and consequences of the risks. Some of the main project-based risks can be divided into the following: Schedule Risk There are possibilities in a project life cycle where the project might not meet the required and mentioned schedule. There might be cases where an important task is skipped or not performed in the development phase. It then requires going back to that step and carrying out the whole process all over again. Moreover, a delay in one specific task may result in delay of the following tasks that were dependent on that particular task. It is known as cascading delays. Scope Risk The scope of the project can be changed or altered by several factors such as growing complexity, series of additional requirements ordered by clients, project integration problems, wrong estimation of resource requirements etc. Unanticipated and unexpected changes made in legal or regulatory framework, defects in integration process, scope creep, undefined scopes, and absence of WBS (Work Breakdown Structure) to identify unambiguous and ill defined objectives are some of the root causes of risks in project management (Meyer Reniers, 2013). Technology Risk This type of risks includes defects in hardware and software functionalities, unanticipated service or platform failures, poor security mechanisms. There is a lot of technological factors involved causing potential risk such as stability, security, scalability etc. Moreover, there should be management strategies for ensuring operational safety in the technology being used. Technology risk assessment protocols are deployed to detect the safely issues. Resource Risk Resources in a project management scenario can be of several types, people and funds being the fundamental resources. Not having adequate number of staffs from the beginning can result in project delay and mismanagement. From a financial point of view, if there is insufficient funds involved then there is hindrance to the completion of the required tasks. These factors directly depend on proper estimation of the cost of project and allocating budgets accurately. Employing sufficient number of personnel and monitoring them regularly results on probable elimination of risks. Quality Risk QRM or Quality Risk Management is a separate part of risk management methodology. The potential threats that might hamper the quality of product is assessed. ORM evaluates the risks and implements appropriate mechanisms to lessen or eliminate those risks. Primary risks include absence of a product or user manual or proper documentation, inability of the end product to meet the specified requirements by the clients. It depends on factors such as products functionalities and performance, product reliability, scalability and flexibility. Products that have too many features often increase the complexity thereby making it incomprehensive for the end-users or customers (Meyer Reniers, 2013). Requirement Risk Often there are certain projects in which the requirements cannot be determined beforehand. The clients requirement specification keeps on changing and as a result an iterative process of development model needs to be followed. Also the requirements those are requested late during the projects life cycle are beyond the scope of the development team and thus the overall development procedure becomes slow and thereby more time consuming. Financial Risk There are times when certain factors might cause the project fail to deliver the desired savings. Moreover, the available fund to carry out all the tasks involved in the project development might not be sufficient in some cases. The project fund can be subjected to be misused or used inappropriately those ultimately results in inability of the organization to deliver the product within the specified time schedule (Zipperer Amori, 2011). Reference List Callis, N. (2015). Falls Prevention: Identification of predictive fall risk factors. Applied Nursing Research. Campo, S. (2012). Risk aversion and asymmetry in procurement auctions: Identification, estimation and application to construction procurements. Journal Of Econometrics, 168(1), 96-107. 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