Week One – Risk Identification Worksheet and Paper
For this week’s assignment, I have attached and highlighted the information I would use in the paper. Along with websites, you can find information to support.
Scenario Two
A construction company has been awarded the contract to build a pipeline in Alaska. The project timeline is of the highest priority because work can only be completed during the summer months due to adverse weather conditions. One of the suppliers of a key component has a longer lead time than is required to complete the pipeline but may deliver if the construction company will pay fees to expedite. There are other suppliers, but these suppliers are not on the construction company’s approved supplier list, and it would take time to get them approved. There is a huge penalty in the contract if the project is not completed on time.
Write a 1,050- to 1,750-word paper in which you select one scenario from the Risk Identification Scenarios worksheet and do the following:
- Define the risk management process.
- Explain the role of risk management in the project planning process.
- Describe at least two risks and their sources for the selected scenario.
- Outline how the risk management may mitigate the risks for each risk listed.
- Explain how you would document the risk.
Format your paper consistent with APA guidelines.
follow directions
Week One – Risk Identification Worksheet and Paper
Write
a 1,050- to 1,750-word paper in which you select one scenario from the Risk Identification Scenarios worksheet and do the following:
· Define the risk management process.
The six vital risk measures are “
· allocating risk to the party best situated to control the risk
· allocating risk through indemnity provisions
· utilizing insurance to support indemnity provisions
· requiring additional insured status and evidence of insurance, include waivers of subrogation, and review documents with the appropriate consultants” (Baker, 2013).
http://constructionexec.com/article/the-basics-of-risk-management-in-construction-contracts
· Explain the role of risk management in the project planning process.
According to “Tech Target Network”(2020), “Every business and organization face the risk of unexpected, harmful events that can cost a company money or cause it to permanently close. Risk management allows organizations to attempt to prepare for the unexpected by minimizing risks and extra costs before they happen” (2).
https://searchcompliance.techtarget.com/definition/risk-management
· Describe at least two risks and their sources for the selected scenario.
· Adverse weather conditions are associated risks
· Paying additional fees to expedite project delivery
· Unapproved suppliers that are not on the construction company’s approved suppler list.
· Funding may be an issue because there is a huge penalty
· Outline how risk management may mitigate the risks for each risk listed.
the proper aid will be rendered on-site – high
through the use of safety equipment at all times and utilizing safety measures and procedures – medium
The four significant phases are
· Executive Framing
· Data Collection
· Modeling and Analysis
· Synthesis and Communication
https://aucerna.com/blog/the-4-key-steps-for-successful-portfolio-management/
· Budgetary Risk – high
Lack of funding – is a great impact to the project if work activities are either not started on time or will not be completed on time
· Operations Risk – medium
Technical ability – they simply do not have the abilities or skill sets to perform critical work activities correctly and efficiently
·
Specification Risk – medium
Customer relationship – the project manager should be cognizant of the customer to understand if there are any historical issues between the organization and the customer, as this can create further challenges not in specifications, but in the potential of a risk of the customer intentionally sabotaging communications to have the organization engage in work activity that will ultimately have to be changed.
· Explain how you would document the risk.
· Documenting risks should be done by utilizing a risk register
· These four principles are to “use the risk meta-language, impact should be described in as much objective detail as is reasonable, risk should be assessed from different perspectives, and it is the project managing office (PMO) responsibility to improve the risk register.
https://www.stakeholdermap.com/risk/risk-register.html
Risk Identification Paper
Felecia L. Alexander
CPMGT/302
June 8, 2020
Dr. Daryoush Tehranchi
Running head: RISK IDENTIFICATION PAPER
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RISK IDENTIFICATION PAPER
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Risk Identification Paper
The intent of this risk identification paper is to define the risk management process for a construction company has been awarded a contract to build a pipeline in Alaska. The risk identification paper will explain the role of risk management in the project planning process for a construction company. It will describe at least two risks and their sources for the construction company. Additionally, this risk identification paper will outline how risk management may mitigate the risks for each risk listed. Finally, it will explain how I would document the risk.
The risk management process for a construction company is defined as a drafted or outlined idea, supervise, and oversee the actions required to avoid subjection to construction risks. In an effort to avoid construction risks, a construction company must identify the hazards, evaluate and analyze the degree level of all the risks, be prepared to produce measures to mitigate all risks, get ahead of unforeseen and under control any lingering risks. “The Baker (2013) a significant component of successful risk management begins with how well the project participants allocate risks at the contract formation stage. Ideally, the project documents will allocate responsibility for certain risks to the party best situated to bear them, thereby minimizing the likelihood and the cost of each risk”. There are six important risk measures and policy regulations, which are essential and need to be well thought-out during a construction project’s agreement development phase. The six vital risk measures are “allocating risk to the party best situated to control the risk, allocating risk through indemnity provisions, utilizing insurance to support indemnity provisions, requiring additional insured status and evidence of insurance, include waivers of subrogation, and review documents with the appropriate consultants” (Baker, 2013). If a construction company follows these vital risk measures, it will alleviate future legalities, which can hinder the development of a construction company’s project.
The role of risk management in the project planning process for a construction company is a critical and effective tool to identify, assess, and minimize or eliminate obstacles and threats for a construction company or any type of business in an effort to control its capital and earnings. According to “Techtarget Neteork”(2020), “Every business and organization face the risk of unexpected, harmful events that can cost a company money or cause it to permanently close. Risk management allows organizations to attempt to prepare for the unexpected by minimizing risks and extra costs before they happen” (2).
The risks associated with the construction company’s contract to build a pipeline in Alaska will depend on the project’s timeline as it is at the highest priority because work can only be completed during summer months. Adverse weather conditions are associated risks, too. When it is too cold, weather conditions are not favorable the construction crew to perform their duties. Paying additional fees to expedite project delivery is another associated risk because this will require more money, which may not be an option for the project budget. Additional associated risks are unapproved suppliers that are not on the construction company’s approved suppler list. Getting unapproved suppliers approved will take time, which may be a waste of time management that could be allotted to accomplishing and producing the deliverables. The last associated risk is funding may be an issue because there is a huge penalty in the contract if the project is not completed on time. The main risk will be if physical injury happens to a construction worker employee. The physical activity of concern for each construction worker is the heavy lifting and carrying, handling of construction equipment and operating construction machinery. The physical activity risk impact is high, which always carries the risk of injury and must be carried out with the utmost caution.
The potential of risk occurring is medium, which includes a medium risk impact. The physical activities will be strenuous at times. All risks will be mitigated through the use of safety equipment at all times and utilizing safety measures and procedures. While there will be a medium risk element, the need for proper personal protective equipment to include ensuring medical supplies are available throughout the project growth. The project will be properly supplied with these materials and easily accessible if a safety risk occurs.
The level of impact on the project could be high. If an injury occurs, the proper aid will be rendered on-site, but the need for additional care may be required. Having a way to efficiently evacuate any injured construction workers will be key to the level of interruption of the construction project.
A plan for managing responses to portfolio and project risks are to always keep in mind the four significant phases to acquire a successful and ongoing portfolio, which will assist in reducing project risks. The four significant phases are executive framing, data collection, modeling and analysis, and synthesis and communication. These steps are significant to gaining and maintaining the construction company’s financial wealth from their portfolio innovativeness. “Executive framing clarifies a system of measurement of interest, priorities, and major strategic concerns. Portfolio management is focused on the very specific needs of the corporation as dictated by its stakeholders. This phase is regularly the variance between creating an effective decision tool and an academic exercise. It also offers the focus needed for rationalization of data collection. Data collection is collecting the information. Modeling and analysis are best performed by someone (or a team) with both project planning skills in an academic environment and business knowledge within a University setting. Finally, synthesis and communication are vital to synthesize the information to make it easy to share with stakeholders. Analysis is inadequate if it cannot provide a better understanding and insight, an improved strategic conversation, and further enlightened decisions.
An accurate strategic adviser can help to modernize model structure, improve analysis times, refine essential insights and facilitate management discussions. All four steps outlined above are critical. It is a common mistake to focus solely on the middle steps of data collection and modeling without paying enough attention to the first and last steps of framing and communication.” (Warren, n.d.).
Documenting risks should be done by utilizing a risk register. There are four imperative steps to document project risks. These four principles are to “use the risk meta-language, impact should be described in as much objective detail as is reasonable, risk should be assessed from different perspectives, and it is the project managing office (PMO) responsibility to improve the risk register.
Risks require a detailed description using the correct risk meta-language by expressing the cause, effect, and impact. When identifying risks, the impact requires as much objective terms as possible and reasonable, which will give an enlightened understanding of the risk during pending analysis. Stakeholders and project construction team should analyze a risk on its impact on the construction project objectives from numerous viewpoints. Lastly, the PMO will be required to create the risk register. When a risk is documented, it simplifies the subject tasks of evaluating the risk quantitatively and defining the risk responses” (“Adding to the Pool of Shared Meaning.”, 2012).
In conclusion, the intentions of this risk identification paper for the construction company’s awarded contract to build a pipeline in Alaska were defined. This risk identification paper has explained the role of risk management in the project planning process for a construction company. Two or more risks have been described and their sources for the construction company. Additionally, this risk identification paper is outlined to express how risk management will be mitigated for each risk listed. Finally, it explains how all risks are to be documented on the risk register.
References
Adding to the Pool of Shared Meaning. (2012). Retrieved from https://lokesh12.wordpress.com/2012/12/14/4-best-practices-for-documenting-project-risks/
Baker, A. F. (2013). Construction Executive. Retrieved from http://constructionexec.com/article/the-basics-of-risk-management-in-construction-contracts
TechTarget Network (2020). Retrieved from https://searchcompliance.techtarget.com/definition/risk-management
Warren, L. (n.d.). Aucerna. Retrieved from https://aucerna.com/blog/the-4-key-steps-for-successful-portfolio-management/
Gil Tyler
Risk Identification Scenarios
CPMGT/
3
02 Version
1
0
University of Phoenix Material
Risk Identification Scenarios
Review each of the following scenarios and identify the risk events, the probability of those risks, and the impact of the risk events. Some scenarios may have more risks than others.
Scenario One
A retail firm has a project that is focusing on expansion into third-world countries to sell pharmaceutical products. The project timeline is, as always, aggressive. The scope is well documented and understood by the project team and key members of the firm. The firm is financially sound, with project funds secure; however, the stakeholders expect that the project will pay for itself within 2 years of deployment.
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Risk event |
Probability of risk event (1=high; 3=medium; 5 =low) |
Impact of risk event (1=high; 3=medium; 5=low) |
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Economic Conditions |
3 | |||||||
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Political Issues |
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Changing societal attitudes |
5 | |||||||
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Government Policies |
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Financial Conditions |
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In this scenario, I have identified the potential problems that could cause trouble for the project, and I would proceed to create a risk management plan to help track and address issues as they arise (Project Management Institute, 2013). By creating a risk management plan, it would help me to assess risk, and create a mitigation strategy to minimize potential damage to the project. I will be able to analyze how likely risk are to occur, act to prevent those risks, avoid risk if possible, and minimize the ones that I can’t. For each of the risk I listed for the scenario, I would document the risk using a risk registry, which would allow me to keep track of the risk and make updates as needed.
Scenario Two
A construction company has been awarded the contract to build a pipeline in Alaska. The project timeline is of the highest priority because work can only be completed during summer months due to adverse weather conditions. One of the suppliers of a key component has longer lead time than is required to complete the pipeline, but may be able to deliver if the construction company will pay fees to expedite. There are other suppliers, but these suppliers are not on the construction company’s approved suppler list and it would take time to get them approved. There is a huge penalty in the contract if the project is not completed on time.
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Probability of risk event (1=high; 3=medium; 5=low) |
Impact of risk event (1=high; 3=medium; 5=low) |
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Time Needed to Approve Additional Suppliers |
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Timeline (not completed on schedule) |
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Adverse Weather Conditions |
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No Funding for Expedited Delivery |
In this scenario, I have identified the potential problems that could cause trouble for the project, and I would proceed to create a risk management plan to help track and address issues as they arise (Project Management Institute, 2013). By creating a risk management plan, it would help me to assess risk, and create a mitigation strategy to minimize potential damage to the project. I will be able to analyze how likely risk are to occur, act to prevent those risks, avoid risk if possible, and minimize the ones that I can’t. For each of the risk I listed for the scenario, I would document the risk using a risk registry, which would allow me to keep track of the risk and make updates as needed.
Scenario Three
A telecommunications company has just assigned you to be project manager for a product improvement project. The scope statement of the project simply says, “Make this product better.” The engineering team believes that they know how to make the product better and have ignored ideas from the sales team. The project funds are secure, as the company believes that improving this product will give them strategic advantages.
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Engineering Team Not Taking Input From sales Team |
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Product Does Not Provide Strategic Advantage |
In this scenario, I have identified the potential problems that could cause trouble for the project, and I would proceed to create a risk management plan to help track and address issues as they arise (Project Management Institute, 2013). By creating a risk management plan, it would help me to assess risk, and create a mitigation strategy to minimize potential damage to the project. I will be able to analyze how likely risk are to occur, act to prevent those risks, avoid risk if possible, and minimize the ones that I can’t. For each of the risk I listed for the scenario, I would document the risk using a risk registry, which would allow me to keep track of the risk and make updates as needed.
Reference
Project Management Institute. (2013). A Guide to the Project Management Body of Knowledge (5th ed.). Newtown Square, PA: Project Management Institute, Inc.