This assessment has been designed to allow you to provide partial evidence of your competence in the unitBSBPMG508A Manage project risk.
Note: you will need to complete additional assessments as you progress through your course to demonstrate competence for all aspects of the unit.
In completing your final assessments, you will show evidence of your ability to:
For this assessment you will need to read the scenario below and complete a series of tasks which will demonstrate your understanding and ability to apply practical applications related to managing risk when working on construction projects. A scenario has been provided and whilst you may draw on your workplace skills and knowledge to complete the tasks you must apply it to the scenario.
The use of additional workplace templates and documents are acceptable but where specified any templates provided in this assessment must be completed as they will form part of your assessment evidence.
Project
The management of all risks to the business is essential and does not only encompass WHS but includes other risks which may impact on the success of the business.
Jake Sullivon was impressed with your outcomes from the WHS risk management work you had completed for him and would now like you to look at the overall project risk for one of the current construction sites – Greenwich Road. The project is currently in preparation and will be ready to commence shortly. After the project commences he would also like you to monitor and control the project risks associated with the site and establish any improvements which can be utilised for future projects.
You will need to liaise with relevant personnel and stakeholders and report back to Jake at the various stages of your management of the project risk. Later in the project, you are also asked to explore a risk management problem with the King residence.
To ensure that all Sullivon worksites meet the quality standards of the organisation, (including all compliance and procedural requirements), all projects which are undertaken must have a risk management plan. The purpose of the plan is to ensure that all organisational risks have been identified and factored into the project costs and appropriate controls are established which meet the criteria for the specific project.
For this part of the assessment you will need to complete two (2) tasks as follows:
Task (1):
For this task you have been provided with a template in Appendix A – Risk Management Plan (Greenwich Road). You must complete all sections of the template in detail and draw upon your current skills, knowledge and workplace practices related to operational risk management.
Before you complete the plan, read each section, conduct any necessary research using both the Sullivon website and documents and any external sources.
When completing the template, you must address the following points:
Provide a brief overview of:
Who will participate in the consultation process and review of risk management for the project from Sullivon Constructions
Once risks have been identified they must be analysed by determining how they might affect the success of the project. Generally, the impact of a risk will realise one or any combination of the following consequences:
Using the risk rating provided in the template and based on the risks you have included in your risk assessment, address the following:
Based on the risks you have identified, develop a strategy to identify the stage of the project when action is to be undertaken to reduce the chance that the risk will be realised. To do this, review the Sullivan Construction Quality Policy and answer the following with reference to how you have met this policy for each of your identified risks:
In this section of the template you will need to determine:
You need to establish two key areas for this section of the template:
Create the strategy for communicating all risk management processes and procedures to all relevant parties related to the site and the specific project at Greenwich Road.
Once you have completed the template, sign off on the document.
Task (2):
Using the email template provided in Appendix B, draft an email to Jake, outlining the purpose of the email, what you have attached and requesting his feedback and approval to proceed.
Part B:Assessing and reviewing risk management outcomes
The project at Greenwich has been operational now for several weeks and you have been overseeing each stage of the project. You have just conducted a meeting with key personnel assisting you with the project and they have reported a couple of areas of risk which you must now complete a report for and notify Jake.
The areas of concern which were raised are:
Using the email template in Appendix B, write a report to Jake Sullivon, listing each issue.
Part C: Identify risk management framework issues and recommend improvements for additional project
Whilst overseeing the risk management process for the Greenwich Road project, Jake Sullivon has contacted you with concerns about a client complaint. After recent heavy rain the shed at the back of King Residence, which is nearing completion, has been inundated with water seeping in at floor level through the southern wall. An inspection has revealed a fault with the slab level. The completion checklist cannot be signed off until the problem has been rectified.
Jake has asked to carry out a review to identify any risk management framework issues and causes, and to make recommendations to improve the process.
Complete the flowing table to present your findings to Jake about the risk management process for the King residence project.
Risk Management Improvement table
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Risk management issue |
Possible causes |
Recommendations (Techniques, tools etc) |
|
Decision making |
Failure to have a structure for decision making and accountability |
Develop a structure for risk-based decisions |
|
Process for risk assessment |
Organizations thinking that risk management has to be done in a compliance point of view |
Have a qualitative and a quantitative taxonomy for risk |
|
Risk awareness culture |
Lack of transparency from the executives and the management |
Have open dialogs to address the concerns |
Items to submit as evidence for this assessment:
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Part A: |
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Task (1): Completed Risk Management Plan (Greenwich Road). |
o |
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Task (2): Email to Jake |
o |
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Part B: |
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Email to Jake – identified risks and recommendations |
o |
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Part C: |
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Completed Risk Management Improvement table |
o |
Introduction:
Provide a brief overview of:
The objectives of the risk management plan (including the framework)
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The main objective of this plan is to provide project leaders and the project term with the fundamental understanding and provide the knowledge of their roles in managing risks. This plan will also discuss the duties and the responsibilities of the top management and the project managers to develop a consciousness of the risk that may be brought about by the suppliers, contractors or the owners of the project. |
Who will participate in the consultation process and review of risk management for the project from Sullivon Constructions
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Dvir et al., (2006) states that the participants of the process of the project implementation plan are the project team and the managers of the project. Also the project supervisor and the council will be part of the consultation committee that will ensure that all information concerning the project is communicated to all parties effectively and on time. |
<attach your completed Sullivon Construction Risk Assessment Form
to the back of this document>
Risk Matrix
Once analysed, risks should be evaluated to determine the likelihood of a risk or threat being realised and the seriousness, or impact, should the risk occur.
‘Likelihood’ is a qualitative measure of probability to express the strength of our belief that the threat will emerge (generally ranked as Low (L), Medium (M) or High (H)).
‘Seriousness’is a qualitative measure of negative impact to convey the overall loss of value from a project if the threat emerges, based on the extent of the damage (generally ranked as Low (L), Medium (M), High (H) or Extreme).
From this risks will be graded as A, B, C, D or N according to the following matrix:
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Likelihood |
Seriousness |
|||
|
Low |
Medium |
High |
EXTREME |
|
|
Low |
N |
D |
C |
A |
|
Medium |
D |
C |
B |
A |
|
High |
C |
B |
A |
A |
The ratings for likelihood and seriousness determine a current grading for each risk that in turn provides a measure of the project risk exposure at the time of the evaluation.
How the identified risks could potentially impact on the project in terms of the four categories of consequence (e.g. x have potential to delay or reduce project outcomes/reduce output quality etc.);
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The risk of time management has a potential of delaying the implementation and execution of the project. This will delay the complete time thus prolonging the project after the set time. The outcome of the project will not be achieved during the stipulated time and the project leaders will be forced to adjust the project. In case of the recurring project where one project is completed in order for the next one to start, this risk will delay the rest of the projects thus causing conflicts among the different teams and reducing the morale of the team members. Burke, (2013) explains that the risk of managing the quality of the project may cause the reduction of the output of the quality of the project. The project may be vulnerable to using data that is not up to date thus making the information used vague and outdated. This will make the project not to achieve the objective is intended to achieve. The risk of managing the resources may lead to increased cost of the project in an attempt to hire more personnel with competence and willingness to work in the project. This will also cause the project to delay so as the hired personnel will get to understand about the project and cope with the conditions of the project. The risk of delayed communication will have the impact of delaying the outcomes of the project. This will also make the output of the project to be of low quality as most of the information necessary for the success of the project may not be given. The project will also be forced to extend the time frame of its implementation as much time will be spent on explaining the requirements of the project to the project team (Turner & Müller, 2003). This will eventually increase the cost of implementing the project on finding experts who will explain the requirements of the project |
Summary of the distribution of risks according to the grading
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Communication is then graded an A risk in the process of implementing the project as it is the backbone of all activities carried out during the process of execution. Communication conveys information from the project leaders to the project team on the requirement of the project so as to ensure its effective implementation. It is also through communication that project leaders are able to get feedback from the team on the progress of the project and the factors affecting the project so that they can be addressed on time. |
Major budgetary implications
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Mitigating risk has an implication of ensuring that the budget of the project is maintained and not costs are incurred in the process of dealing with the risk. On the other hand, according to Jüttner, Peck & Christopher, (2003) failure to mitigate the risk makes the project to incur more costs in dealing with the risks thus the budget is adjusted. |
Type of mitigation action is proposed
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Mitigating risk has an implication of ensuring that the budget of the project is maintained and not costs are incurred in the process of dealing with the risk. On the other hand, according to Jüttner, Peck & Christopher, (2003) failure to mitigate the risk makes the project to incur more costs in dealing with the risks thus the budget is adjusted.The council proposed seven major ways of mitigating the risk. First, Ellingwood, (2006) indicates that the project managers are expected to clear all the requirements of the project so as to make the team informed of what is expected. This was to be made possible through the use of workshops that will be briefing the team on the project. The project leaders were also expected to acquire the right people of the team who are motivated through various techniques of acquiring the team. This was to help the leaders to mitigate many risks that are related to the people and to attract and retain qualified and the best team to implement the project. The project leaders were also to spread the risk to other parties and more specifically to the third party who has the ability to restore the project back to its normal state after the occurrence of the risk, for example, the insurance company (Nonaka, 2008). By ensuring the project the leaders may have the confidence to implement the project where they are assured that they are insured in case of anything. The implementers of the project can also test all the ideas and the possible solutions before the implementation of the project so as to test the feasibility of the project (Low, 2009). Implementers are also expected to test everything in the project so as to identify the main cause of the risk in the project. The leaders should also communicate everything to the team and ensure effective channels of communication so that information and feedback are given and received on time. Finally, the project leaders should be equipped with a plan B that will be used in case the first plan fails. This helps the leaders to be always prepared for the unseen and ensure that the project does not stop or delay. |
Who is responsible for undertaking the proposed action?
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The project leaders are responsible to ensure that the mitigation plan is undertaken and embraced. This is to ensure that all costs related to the identified costs are evaded and not extra costs are incurred during the course of project implementation. Also the management of the organization should take into consideration the effectiveness of the project so as to ensure that the plan is implemented efficiently. |
Cost implications for the project Budget
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By ensuring that the best mitigation plan is developed, this implied that the cost of the project budget will be used effectively and no extra costs are incurred during the implementation process. The project will be completed within the stipulated time and within the available resources thus strains of getting the extra resources. |
Risk Monitoring
The frequency of risk reviews
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The review of the risk should be done at all stages of implementing the project from its planning to its review. The project leaders, the project council, and the project team should be involved in the process of reviewing the management of the risk and ensure that the risks are monitored at all stages so as to reduce their impact (Schnabel et al., 2009). |
Who will be involved in the review of risk management?
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When reviewing the risk management there are various parties that should be involved. The project leaders, the project council, and the project team should be involved in the process of reviewing the management of the risk and ensure that the risks are monitored at all stages so as to reduce their impact (Schnabel et al., 2009). Also the board of management who reviews the progress and policy against the project plan that is in place. The audit and risk committee is another party in reviewing the risk management and they are important in disclosing the information statements and controlling the effectiveness of the project. Finally, there is also the risk management committee that monitors the progress of the implementation plan. |
How often risks will be monitored to ensure that appropriate actions are taken to reduce any impact
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Risk should be monitored every time a new procedure, machine or any substance is introduced in the project so as to access whether it has potential to cause risk. The employer should carry out risk assessment when any new job commences or when something suspicious happens in the project. |
The frequency of reports and updates to senior management
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The updates and the reports taken to the top management should be done regularly and if possible daily so that the top management is able to monitor the progress of the project (Jorion, 2000). |
Roles and Responsibilities
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Project/Site Supervisor A project supervisor has the responsibility of developing the project plan and ensures its implementation. Also he/she is obligated to recruiting, leading and managing the project team in ensuring that all the tasks of the project are completed on time. He/she have the duty to give the updates on the project and develop a schedule for the project (Turner, 2014). He/she should also conduct a visit on the sites and collaborate with the construction team continuously. He/she should also communicate with and supervise the subcontractors and the contractors. Should also establish, uphold and improve any relationships that are important in the success of the project. Project Team The project team has the obligation of giving contributions to the objectives and completing the deliverables of the project. They are also expected to work together in unison and expertise to achieve the objective of the project. The team should also communicate the goals of the project all over the organization to create awareness. The team should ensure that it documents the process of implementing the project. |
Communication Strategy
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When passing information concerning a risk it is wise to develop a strategy for communication. The strategy should first consider the background of the risk and anticipate any hazard related to it. Then prepare on how the risk can be monitored and how the risk can be controlled. Disseminate the information to all parties involved through the use of available media of communication for decision making and then review the strategy regularly so as to monitor its effectiveness |
The Risk Management Plan is a managed document. This document is authorised for release once all signatures have been obtained.
PREPARED: ( name of the student>risk management >Jake Sullivon) :DATE: _24__/_08__/__2018_
(for acceptance) (<name>, <Project Title>, Site Manager)
ACCEPTED: Risk management> Sullivon Constructions: DATE: __24_/__08_/_2018__
(for release) (<name>)
on behalf of the <Project Title>Sullivon Constructions
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