PM 692 Project Risks Discussion Essay Responses
After reviewing the materials from this week, discuss the basics of risk management. Ensure you are noting the following:
What is project risk and why is it important to plan for risk?
Define a threat and an opportunity. Why is it important to know what these are on your project?
What are the risk response strategies?
Please find an additional reference source and cite the source in your discussion post. Sources must be used to enhance the learning experience. By finding a referenced source, you are enhancing the learning experience by searching for another source of information on the topic. Also, please ensure you are using a source that is peer-reviewed to ensure the accuracy of information (select peer-reviewed journal articles in the Park Library).
Your original post should be in the format of an executive summary (must contain verbiage and bullet points to name the key points). Use APA formatting.
Please respond to each student and use references
Student 1 Tracey
Q: What is project risk and why is it important to plan for risk?
A project risk is a potential and unforeseen trouble spot that may occur when a project is implemented (Larson & Gray, 2020). Some examples of risks are:
Scope creep – is when additional work is added that does not fall under the agreed upon requirements or has not been authorized Define a threat and an opportunity
Low performance – is when the project does not perform as it was expected
Over budget – When the cost of the project exceeds the agreed upon budget
Improper resources – When the project does not have the appropriate recourses needed to meet the demands of the project
In research from Carbone and Tippett (2004) failing to plan for risk is planning to fail and it is crucial to have a plan to manage project risks. Risks can cause a project to not reach its goals and objectives or even cause complete failure of the project.
Q: Why is it important to know what these are on your project?
It is important to know the risks on your project because good risk identification creates good project communication which results in good decisions being made on how to manage the risks. By identifying, avoiding and dealing with potential risks in advance, you ensure that your employees can respond effectively when challenges emerge and require intervention (Duggan, 2019).
Q: What are the risk response strategies?
The risk response categories are mitigating, avoiding, transferring, escalating, and retaining (Larson & Gray, 2020).
Risk Mitigation: This response strategy involves taking actions to reduce an organizations exposure to potential risks and reduce the change of the risk happening. An example of a risk mitigation is if a project has a risk of a ransomware attacks, they can have security put in place to reduce the likelihood of these chances.
Avoiding: This response strategy involves adjusting the original projects plan so that the risk is no longer present, this can only be done when the risk can be eliminated. In manufacturing they might not store or use certain products because they are considered dangerous, this is an example of avoiding a risk.
Transferring: This response strategy involves shifting the impact of the threat to a third party. An example of transferring is purchasing insurance for company vehicles incase of a wreck.
Escalating: This response strategy involves raising the risk to others with more authority because you do not have the authority or knowledge to handle the risk. An example of escalating is when the project manager is notified that an employee may be leaving the project, they must notify their HR or PMO to get a new resource identified so that work does not stop.
Retaining: This response strategy involves making the decision to accept the risk and whatever comes with the risk. An example of retaining is when a company purchases a new building they may see that the flooring is bad, but they decide to still purchase the building. They do this then they can budget for the floor to be fixed at another time.
Carbone, T. A., & Tippett, D. D. (2004). Project Risk Management Using the Project Risk FMEA. Engineering Management Journal, 16(4), 28–35. http://faratarjome.ir/u/media/shopping_files/store…
Duggan, T. (2019, February 19). Why Is Risk Management Important to Project Success? Small Business – Chron.Com. https://smallbusiness.chron.com/risk-management-im…
Larson, E. W., & Gray, C. F. (2020). ISE Project Management: The Managerial Process (ISE HED IRWIN OPERATIONS/DEC SCIENCES) (8th ed.). McGraw-Hill Education.
Student 2 Belinda