Assessing RiskRisk is an important part of any project.It is imperative that a comprehensive risk assessment is completed throughout the life of the project.This week as you work on the progressive case study you will develop and assess a risk assessment tool, that you will use to review and assess the case study project .It is strongly recommended that you go back through the resources provided in this class as well as the use of external and supplemental materials that you have found in your research. Please determine if your version of an effective risk assessment tool can adequately assess risk throughout this project. It would be beneficial to provide a risk assessment matrix.The assignment should be 750 – 1000 words, APA style. A minimum of two external sources must be used in conjunction with the course materials. Only one can be from an internet source (not Wikipedia). Supporting documentation such as title pages, references, diagrams, schematics, or organizational charts /Flowchart are supplemental to the text portion. Present this assignment to your professor as you would to a client.risk.docxRisk
Risk is not just a board game. Risk to the inexperienced project manager often
creates fear throughout the team. Risk is a natural part of the project management
process. How the project manager, the organization, and the team view risk is a strong
indicator as to the success of the project.
In the previous lecture we started to talk about risk assessment. It was stated that risk
and evaluation need to begin in the proposal stage and continue through to the
completion of the project and beyond. There are three primary processes for addressing
risk: avoidance, elimination, and acceptance. This is where are we will focus the
majority of this lecture.
Risk is part of moving the project forward. Risk is required for innovation and
creativity—if we are fearful of risk, then risk will control us. If we do not take risks, we
can quickly become obsolete. A project is not usually taken on to maintain the status
quo but to advance some part of the operation or organization. Addressing risk is a
critical part of effective project management. The PMBOK addresses an entire section
on risk including assessment and management. This is highly recommended reading for
this class and in the field. The process the project manager and their team use to
address risk can have a significant impact on results throughout the project including
the final product.
Risk avoidance: this might seem like the most logical approach to addressing
risk on any project. As was stated earlier, risk assessment should begin in the
proposal stage and continued throughout the life of the project and beyond. There are
many learning opportunities that present themselves throughout the life of a project. A
proactive approach and assessing potential risks throughout the project is an excellent
way to identify and address risk in a manner that planning will offer over a reactive
approach. If a project manager identifies a risk such as a critical component that is
being manufactured by a vendor overseas that must be delivered by certain point in the
project, there are steps that can be taken to minimize this risk. Risk avoidance should
include a discussion about the use of a foreign manufacturer or developing other
resources. Risk mitigation strategies should be used that would lower the potential
threat to the project. An overseas vendor could encounter political unrest, labor issues,
or logistical challenges such as severe storms that prevents the product from being
delivered on time.
Risk avoidance as a result of effective risk management includes rating the
severity of the threat to the project and organization. By identifying the threat
and assessing its potential, the project manager in their team can develop alternatives
that are more viable than the proposed threat. A measured approach can determine if
the return on accepting the risk is greater than the risk itself.
Risk elimination: the term means what it says. Can the risk be eliminated altogether?
Microsoft prides itself on creating at least three ways to do any task regarding any
Office software application. This is an excellent strategy as different personalities are
using different tools for different reasons. If there are multiple approaches for
completing the same task, the risk of failure and the risk of success are greatly altered.
The same is true in assessing risk for potential elimination while determining if there
are other reasonable alternatives that involve a less risk for a similar return. If the risk
can be eliminated altogether and still produce a high rate of success, then this process
is likely the best route. Thorough and comprehensive assessment can greatly diminish
the potential threat to the project.
Several years ago the Toyota Motor Company
experienced a major challenge when one of its
vendors could not provide a key component to a
seat belt mechanism that was used on several
models. At the time Toyota had one vendor that
developed these mechanisms. As a result of this
failure several production lines were shutdown
which caused Toyota and several other vendors to
lose revenue, large amounts of revenue. Toyota
looked at this process and determined that a change
was necessary. The company has since cross
trained multiple vendors to produce different
components, thereby eliminating future risk by
having only one producer of a product. This also
resulted in driving down the cost of different
components as vendors can compete for the
majority contract.
Eliminating all risk is not usually an acceptable option. An organization and the
project manager must be willing to acknowledge risk as a key part of a project.
Managing risk is a big part of effective project management. Developing the tools to
assess and address risk is a critical part of the process. Those that assess the risk but
never address the risk by developing resources and alternatives have lost the value of
risk assessment. Organizations that have a set process for all projects must create the
value for this process or be willing to accept the consequences. The rationale that:
“we’ve always had done it this way” is no longer valid. A project manager must be
willing to innovate and develop creative solutions in order to minimize potential risk and
threats to the project and thereby the organization.
Risk acceptance is not going along with the flow. A comprehensive assessment is
necessary for all potential risks. New risks will present themselves throughout the life of
a project. A project manager will not be able to determine all risks from project startup.
The process must be on going. As such, there must be a process for continuous
assessment and impact on the project and the organization. A risk management team
is extremely beneficial to ascertain the risk of a project and to determine whether the
risk is worth the potential return.
A project manager that has successfully led a project will be willing to accept a
certain amount of risk. If the project manager and the risk management team have
deemed that the process they wish to follow requires a component be available, they
have chosen to accept the risk that is associated with this decision. An effective project
manager will still develop alternative options if this component does not pan out. Risk
acceptance does not mean failure to plan alternatives. Risk acceptance establishes that
the risk is been acknowledged and the decision has been made to move forward with
full comprehension of potential consequences and returns.
What we have addressed in this lecture is not an exhaustive discussion of how risk
impacts a project but is more of an overview. It is important to be able to thoroughly
assess risk throughout the life of the project. If the assessment tools are not used in
the feedback followed upon this provides an even increased risk to the project and the
overall organization. Risk should not be taken on due to ignorance or negligence. A
calculated and measured approach to addressing risks is essential to becoming an
effective and a successful project manager.
Recommended Reading/Videos

ADP Resource Risk:

re=results_video&playnext=1&list=PLE8D7D2932997EF
27

Simplilearn: Project Risk Management, Identify Risks,
PMP Certification
Training:http://www.youtube.com/watch?v=7YVCud9BA
RA

How To Plot Project Management Risk:

re=related

Risk Management | What is Risk Management:
http://www.youtube.com/watch?v=x8cQKjmuis&feature=related

Perform Qualitative Risk:


Simplilearn: Perform Qualitative Risk Analysis, PMP
Training Courses:
http://www.youtube.com/watch?v=hzxlmgCk9Yc&featur
e=results_main&playnext=1&list=PL0E546264842ABA2
E

Simplilearn: Perform Quantitative Risk Analysis, PMP
Online Certification Training:
http://www.youtube.com/watch?v=RzWyA7G-qEw

Risk Management “Fun @ the Grand Canyon”:


Sims, S. (2012). Qualitative vs. Quantitative Risk
Assessment. Retreived on July 31, 2012 from
http://www.sans.edu/research/leadershiplaboratory/article/risk-assessment

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