Features of Project Risk Management

Introduction

One of the most fundamental issues to the success of any project is the risk management process. A vital undertaking by any project manager is to identify the project risks and assign the issues priority based on the likely impact resulting from their occurrence. The risks with a higher possibility of occurrence as well as a higher impact on the project progress must be addressed adequately or their effects addressed to reduce the effect to a bare minimum.

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All this is important for successful implementation of the project. McBride Financial Services is a firm that offers low cost mortgage services targeting retirees, recreational property buyers as well as buyers of primary or secondary residence. McBride is considering expanding their presence into Idaho with an office at Boise. McBride Financial Services intend to introduce a high tech support service in their newly opened office supporting mortgage application related processes.

Existing controls and their mitigation

A preliminary study at Boise reveals a number of controls that may adversely affect the progress of this project. Organizational politics are currently alive at McBride Financial Services, and can cause a risk to the success of the project. The expansion policy at McBride is necessary and unanimously approved by the top-level management. However, part of the board supported the expansion to begin at South Dakota although the other group supported Idaho. Eventually the board chose Boise at Idaho. However, this still poses a risk to the success of the project, especially the skeptic attitude rife within the board (Grey, 1995). This was a result of the divergent views held concerning the establishment of the office at Boise.

The formal approval of Boise as an office has however not actualized on the ground. The facilities needed to set up the office have delayed probably because of the organizational politics in play. The most probable approach to mitigation here is a thorough explanation of Boise’s suitability in terms of the benefit to McBride as a firm. A preliminary cost benefit analysis of the project carried out with consideration to the proposed sites shows that an office at Idaho will save the company $157,000 in operational costs in the first year of implementation. For Sioux Falls, South Dakota, the calculations would amount to $21,000. Based on the discoveries the board can be persuaded to support the implementation at Boise.

Recommended controls and their mitigation

The risks in this category are those after the initiation of the project at Boise. A typical environmental risk would be the use of toxic chemicals near the proposed business by existing manufacturers. Vehicles ferrying the toxic by products from some of these manufacturing industries also pose a risk, especially if a spillage or an accident occurs near the proposed business. A mitigation process would involve a pre-site survey to establish any available environmental risks points. Verifiable environmental preservation compliance and enforcement policies by these industries in question can help in mitigation.

The proximity of government premises to the proposed business that could attract criminal acts such as terrorism that may in turn pose a risk to the proposed business. The mitigation here would involve a pre-site survey and establishment of the proximity of necessary security detail as well as their accessibility to the proposed business premise. Another likely risk can be due to failed system integration because of incompatibilities with other established systems in other branches causing Boise to be shut out. Mitigation here would include a well-planned development and testing plan to cover all the aspects of system testing before handover.

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Third party non- technical tasks such as security clearances, approval of the project budget, legal reviews and equipment procurement taking longer than expected is also a foreseeable risk. The inclusion of experienced project team members in some of the task teams will expedite the process and contribute to the success of the project.

Conclusion

A well-established and sustained communication plan before and during the project is very fundamental to the success of this project. The team must be able to set up a proper project risk management plan to address the likely risks and their mitigation. The risk register and risk treatment are the two most important documents to help in the communication process, especially in addressing risk assessment and management (Cooper, Grey, Raymond, & Walker, 2005).

References

Cooper, D., Grey, S., Raymond, G., & Walker, P. (2005). Project risk management guidelines:managing risks in large projects and complex procurement. New York: John Wiley & Sons Ltd.

Grey, S. (1995). Practical risk assessment for project management. New York: John Wiley & Sons Ltd.

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