PROJECT RISK MANAGEMENT ROLES AND RESPONSIBILITIES
Prof. Swati Oza (Asst. Profesor, JSPM’s Abacus Institute of Computer Application)
Prof. Shital Deshmukh (Asst. Profesor, JSPM’s Abacus Institute of Computer Application) Prof. Neha Tejwani (Asst. Profesor, JSPM’s Abacus Institute of Computer Application)
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Abstract
The benefits of risk management in projects are huge. You can gain a lot of money if you deal with uncertain project events in a proactive manner. The result will be that you minimize the impact of project threats and seize the opportunities that occur. This allows you to deliver your project on time, on budget and with the quality results your project sponsor demands.
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It goes on to motivate why an external risk management team would be better than an internal one. During the risk response planning phase, one of the inputs is stated as risk owners and explains this as follows:
“A list of project stakeholders able to act as owners of risk responses. Risk owners should be involved in developing the risk responses”.
These are the only references in the PMBoK to the people that should be involved.
From the above, two roles are identified. The first is the risk team that will perform the required activities and secondly, risk owners to be involved in the development and implementation of the risk actions. It does, unfortunately, not state what the responsibilities are that accompany these roles. In the next section, a more comprehensive framework is given for the roles for risk management followed by an explanation of the associated responsibilities.
2. RISK MANAGEMENT ROLES
Five separate roles can be defined for performing project risk management. These are:
• Project risk manager
• Project risk management team
• Project risk profile owners
• Project risk custodians
• Project team members
Following is an explanation of each role.
1. Project risk manager
The role of the project risk manager is to provide the overall project risk strategy and to coordinate the project risk management
Working to understand the risks a project may endure along with the cost associated is critical in every project management plan. Understanding potential risks based on the project type, resources needed, timeline and budget still leaves gaps that creates uncertainty for actually predicating the outcome of the project. There is not a true way to predict when and where a project risk will occur but designing a plan to properly address and manage those risks will increase confidence while eliminating the element of surprise.
risks and determine the likelihood and consequence of that risk occurring during the project. The
Indeed, Project Risk Management includes the processes of conducting risk management planning, identification, analysis, response planning, and controlling risk on a project. (PMBOK Guide - Fifth Edition, 2013).
Risk mitigation would allow the project manager to know the project’s strengths and weaknesses then evaluate the threats facing the project. The project manager would implement different strategies such as lowering exposure to threats or improving strengths of the project to make sure that the variance in schedule and cost is not very high when there are risk event occurrences. A risk mitigation strategy ensures that the project manager, the implementing team, and the project’s stakeholders are on the same page in the project implementation job. It also gives the project team an opportunity to address risks in advance so resolving additional issues becomes easy when the issues occur later during the implementation of the project. Moreover, the risk management strategy would fine-tune the parameters used for measuring the results of the project (Kerzner,
Risk or threat is common and found in various fields of daily life and business. This concept of risk is found in various stages of development and execution of a project. Risks in a project can mean there is a chance that the project will result in total failure, increase of project costs, and an extension in project duration which means a great deal of setbacks for the company. The process of risk management is composed of identifying, assessing, mitigating, and managing the risks of the project. It
Good risk assessment requires an elaborate plan. A risk management plan is a project management type that helps ensure that an organization reaches desired goals in a given project (Gibson, 2010). Like every plan, caution should be taken to make sure that goals of the assessment are achievable given the best accommodation of time and cost. This calls for organization to have a risk scope. Risk scope simply identifies the boundaries of a given risk assessment. This is
Background- In its most basic sense, risk management identifies, allows assessment, and prioritizes risks that are associated and central to an individual project or organization. Risk management allows the organization to be proactive in preventing or mitigating risks, for improving certain processes within the organization, and with the hope of preventing fiscal exposure. However, in almost every organization there are risks individuals are unique and do not always perform at a high level of safety; mechanical or design failures exist, construction projects have supply or labor issues, there are uncertainties in computer or data modification, of course natural disasters, and even deliberate attacks from competitors, etc. Because this is such a common occurrence, national and even international standards have been developed in conjunction with the insurance and regulatory institutions to at least provide basic guidelines to minimize risks risk (International Organization for Standardization, 2009).
Risk management is an ongoing process that must continue through the life of a project. It includes processes for risk management planning, identification, analysis, monitoring, and control. These processes need to be reviewed throughout the project’s lifecycle as new risks arise throughout the implementation of the project. It is the objective of risk management to decrease the probability and impact of events adverse to the project. On the other hand, any event that could have a positive impact should be exploited.
Risk management is needed in a project to help guide the project manager in the right direction. What this particular management will do is summarize how risk management will performed on a project. The project manager will have the knowledge areas of risk probability/impact, budget schedule and roles/responsibility are some of the
Project Management is the application of knowledge, skills, tools and techniques to project activities to meet project requirements (Project Management Institute, 2008; Gordwin, 2012). When applying this knowledge effective management of appropriate processes is required. Risk Management is considered most critical and includes the processes of conducting risk management planning, identification, analysis, response planning, and monitoring and control on a project. The purpose of the risk management plan is to establish framework in which the project team will identify risks and develop mitigation strategies to avoid, eliminate or convert to
Hillson, D. and Simon, P. (2012). Practical Project Risk Management: The ATOM Methodology. 2nd ed, Tysons Corner, VA: Management Concepts Press.
Project Risk Management – identifies potential risks (good and bad) that can affect the objectives of the project.
In order to perform project risk management effectively, the organization or the department must know the meaning of the risk clearly. With regards to a project, the management must focus on the potential effects on the objectives of the project, for example, cost and time (Loosemore, Raftery and Reilly, 2006). Risk is a vulnerability that really matters; it can influence the objectives of the project
In this paper, an extensive literature review is undertaken to evaluate the importance of risk allocation to project stakeholders and discuss current practices. However, the complexity of this topic is beyond the scope of this paper. Hence, the attention is towards the direct participants, even though other stakeholders will also be tangentially mentioned. Also, as PPP is developing fast in the area of project finance and its importance is increasing, I have used it to illustrate some of the points made in the current risk allocation practices.
This assignment is included in the 2014 session of the Risk Management module of the MSc in Project Management course at University of Aberdeen. The main purpose of the assignment is to demonstrate my understanding of the issues involved in Risk Management and how they are applied in my current Project environment. The assignment is split in to two questions as detailed below.