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SIKKIM MANIPAL UNIVERSITY DEPARTMENT OF DISTANCE EDUCATION ASSIGNMENT - SEMESTER 4 NAME ROLL NUMBER LEARNING CENTER SUBJECT NAME MODULE NO DATE OF SUBMISSION FACULTY SIGNATURE : : : : : : :
PM0016 PROJECT RISK MANAGEMENT
SET 2 JUL-12
2012
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2012
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The results of the risk management planning process include: Risk management plan: It defines the way the risk management process will be carried out in the project. The risk management plan includes the following: Risk categories: Here, risks are identified to a consistent level of detail and then categorized based on the quality and impact. An organization can also use previously prepared risk categories that are structured into Risk Breakdown Structure. This helps to identify various possible causes of risks. Budgeting: Quantitative assessments of the cost of the resources are estimated. Cost baseline, which is time-phase budget, is also obtained to measure project performance. Roles and responsibilities: The project risk management team members are identified and responsibilities assigned. Timing: The time-period for risk management process is defined as carried out throughout the project. Methodology: The tools and data sources used to perform risk management process are defined. Probability and impact matrix: Risks are prioritized based on the effect of the risks on the project objectives. Risks are prioritized using a lookup table where risks are rated as high, moderate and low importance. These rating are quantitatively analyzed and based on the ratings, the risk responses are planned. Tracking: Risk management activities are documented for the benefits of future projects.
Q 2. Write advantages & disadvantages of the following: a. Brainstorming b. Interview c. Consulting Experts d. Study project documentation e. Stakeholder analysis
Answer: Risk Identification Methods Brainstorming Advantages Helps to share risks with others. Helps to gather lots of information and experience from the past projects. Helps to reveal sensitive matters in face to face meeting. Helps to involve people in risk management. Provide independent view on matters Disadvantages Difficult to have get- together for meeting. Difficult to provide comfort level to make them speak freely. Time consumed is more.
Interviews
Consulting Experts
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Stakeholders Analysis
Provides documents of the risks experienced from the past project. Provides insight of the working procedure of a team. Asking the people involved, such as stakeholders, in the project and understanding their interest and potential actions.
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Even though benchmarking is a useful component for process improvement, it does have some limitations. Benchmarking focuses more on data rather than the process used to create that data. Below are some of the other limitations of benchmarking. Benchmarking needs lot of dedication to succeed. As the comparison of performance and processes is done on continuous basis, it is considered as the expensive and time-consuming process. No proper knowledge on downsides of adopting this benchmarking practice. Many benchmarking projects end with statement they are different from us and hence necessary information is not shared to compare required data for process improvement.
Benchmarking process can be successful only if the senior management supports openness for change and new ideas. They should have dedication and must be willing to share the information with benchmarking partners.
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1. First, list all the sources of threats as listed and check whether any of these apply to your project. 2. Second, consider from the point of your organization or structures and analyze risks that might occur on those parts. 3. Check for any vulnerabilities within these structures. 4. Get different perspectives by asking other people. Step 2: Estimate risk After identifying the threats, the next step is to measure its impact. This can be done by estimating the probability of the event occurring and then multiplying these estimates with the cost that may incur to get the things right. Step 3: Managing risk Once you have identified and estimated the risk level, the next step is to find out ways to manage them. This can be done by selecting cost effective approaches. Accepting the risk is considered to be better and cost effective approach rather than using excessive resources to eliminate it. Sometimes, accepting risks enable you to plan for an event to minimize it, rather than eliminating a risk. Elimination sometimes causes alteration in project objectives and use of extra resources to get the alteration approved and hence may not be a feasible option. Risk can be managed in following ways: By using existing assets: You can use the existing resources or can improve the existing systems or accountability to respond to any risk events. You can also bring changes in responsibilities and internal controls. By contingency planning: You must create a plan before accepting the identified risks so that you can reduce the impact of that risk. A contingency plan helps you to take quick actions in a crisis situation. By investing in new resources: You can decide on to bring new resources to deal with the identified risk. If it is a high priority risk, then your organization must appoint some outsiders to deal some part of the risk management process. Step 4: Reviews After completing the risk analysis and risk management processes, the next and final step will be review, which must be done on regular basis. The review processes include conducting formal reviews or may involve testing systems and plans.
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Risk Register (updates) contains the suitable risk response for specific risks. The risk register is revised to reflect the results of the response planning process. Documenting a risk in detail should be qualified to the ranking of the risk (high risks in detail, low risks by listing). Risk Register contents include: Identified risks, their description like the area of the project affected, their causes and how they may affect project objectives Risk owners and people who are assigned with responsibilities. Results from the qualitative and quantitative risk analysis methods. Approved response strategies. Specific actions to execute the response plan. Budget and programme activities for responses. Evidences and caution signs for risks occurrence. Emergency plans with triggers and other allied emergency reserves. Standby plan to fall back upon when the risk occurs. Residual risks expected to be lasting after the strategy is implemented and accepted. Secondary risks originating directly from implementing a risk response.
It often reacts to changes in strategy and in the environment in which the organization changes.
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