Managing Project Risks: Tools & Techniques, Risk Context, And Analysis

Approach to Identify the Risks

The project of development of an e-commerce portal for the organization involved numerous internal and external stakeholders. It was necessary to educate and inform the stakeholders about the risk management processes and activities being followed and applied in the project.

For this purpose, communication and training methods were utilized. There is a weekly meeting that the Project Manager carries out with all of the project stakeholders. In this meeting, an overview of the risk management approach and methodology was discussed with the stakeholders. The use of web-based trainings was then done to educate the stakeholders about the details of the steps that were to be used and implemented. The project team was open to the changes and recommendations provided by the stakeholders.

Relation of Risk Management with Scope, Schedule, and Budget

Risk management is one of the knowledge areas under project management. It is closely linked with the other knowledge areas, such as scope management, schedule management, and budget management[1].

The identification of the project risks are required to be done for each of these three areas so that the estimates are adequately made. The inclusion of the risks and uncertainties while defining the project scope or while preparing the project schedule and budget would provide the project team with the ability to handle and mitigate the risks in case of their occurrence.

Tools & Techniques for Risk Management

There are qualitative and quantitative tools and techniques used in planning, analysing, and managing the project risks.

The techniques used for risks identification include information gathering techniques, such as observations, interviews, domain analysis, brainstorming, and group discussions. The analysis of the risks is done using the quantitative techniques, such as SWOT analysis and decision-tree analysis. The mitigation of the risks is done using varied set of tools as per the nature of the risks; for example, technical tools are used to control the security risks and attacks.

Task 2 – Portfolio of Evidence

Identify Project Risks

Risk Context

It is required for the project to adhere to the Information Security and Privacy laws & regulations, such as Data Protection Act, Intellectual Property Rights and IT Law to maintain the privacy and security of the information on the e-commerce portal. The risks have also been defined keeping the ethical and professional codes of conduct implemented in the organization[2].

The expectations, level of interests, and involvement of the internal and external stakeholders is also considered. The schedule and budget of the project can be varied by 6% as the tolerable limits.

Approach to Identify the Risks

The risks will be identified and managed for the project as per the risk management knowledge area defined under Project Management Body of Knowledge (PMBoK). The identification of the risks will be done using information investigation and gathering processes covering the techniques as observations, interviews, domain analysis, brainstorming, and group discussions. The analysis of the risks is done using the quantitative techniques, such as SWOT analysis and decision-tree analysis[3]. The next set of steps includes evaluation, mitigation, control, and closure of the risks.

Involvement of Project Team Members in Establishing Risk Context and Risk Planning

The team members involved in the project include Project Manager, Web Developer, Content Developer, Tester, and Graphic Designer. These resources will play a significant role in establishment of risk context, risk planning, and management.

Project Manager will take inputs from all the other resources on the regulations, policies, and methodologies applicable to their set of activities and the risk context will be defined accordingly. The risks specific to each of the project areas, such as project development, portal testing, portal design and implementation will be provided and illustrated by the resource assigned for the completion of the activity. The risk planning and management will be carried out accordingly.

Analysis of the Project

Risks as Opportunities

Market Risks: There may be certain fluctuations in the market that may bring down the cost of the tools required to design, develop, test, and implement the project.
Resource Risks: The effort and productivity estimation will be done for the resources in the initiation and planning phase of the project. However, the resources may exceed the expected levels[4].Consequences & Likelihood.

Risk	Consequence rating	Description of possible consequences
Schedule Overrun	4	The delay in the due dates of project deliverables will deteriorate the customer trust and engagement and will bring down the reputation of the organization in the market.
Technical Faults	3	There may be unwanted delays that the team may have to go through because of the technical faults ad failures
Security Attacks	5	The security and privacy of the information and data sets may be negatively impacted which may lead to legal obligations as well along with the deteriorate end user satisfaction
Market Risks	3	The budget of the project may come down with the decrease in the costs of the tools and the remaining cost may be utilized in the betterment of other project areas
Resource Risks	3	The resources may be able to finish the project activities before the due dates and the improvements and quality enhancements activities may be done in a better manner
Quality Risks	5	Non-adherence to the project quality standards will lead to poor customer satisfaction and will also negatively impact the goodwill of the organization
Ethical Risks	5	Non-adherence to the project ethical standards will lead to poor customer satisfaction and will also negatively impact the goodwill of the organization[5]
Scope Inflation	4	The budget and schedule of the project will be negatively impacted with too many changes and re-work. The resource engagement and motivation levels will also be poorly impacted.
Legal Risks	5	Non-adherence to the project legal standards will lead to poor customer satisfaction and may also lead to legal obligations and punishments
Health & Safety Issues	5	The resources may suffer from temporary or permanent injuries

Risk	Likelihood rating	Explanation of likelihood rating
Schedule Overrun	4	There may be changes in the project as demanded by the client or technical faults that may lead to unwanted delays.
Technical Faults	3	There are several technical tools that will be used in the project and may show certain errors and faults.
Security Attacks	5	There will be too many access points available to the attackers which may allow them to easily give shape to network-based attacks, malware attacks, data breaches and leakage.
Market Risks	2	The market inflation rate is low and the chances of the risk will also be low as a result[6].
Resource Risks	2	The assignment of resources has been done on the basis of their skill sets and the effort required. It is less likely to change during the project timeline.
Quality Risks	1	There will be reviews and audits done by the management on the aspect of project quality and therefore, the likelihood of this risk is very low.
Ethical Risks	1	There will be reviews and audits done by the management on the aspect of project ethics and therefore, the likelihood of this risk is very low.
Scope Inflation	3	There may be changes in technology, customer expectations, and requirements that may come u and alter the project scope at regular intervals
Legal Risks	1	There will be reviews and audits done by the management on the aspect of legal compliance and therefore, the likelihood of this risk is very low.
Health & Safety Issues	1	The company has a healthy work environment, work culture and atmosphere developed and implemented so the chances of the risk are very low

Quantitative Risk Analysis

List: SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis, Decision-tree analysis

Description: SWOT analysis of the risks will provide the severity levels of the risks and the ability of the organization to deal with these risks. Decision-tree analysis will provide clarity on the likelihood and impact levels involved with the risk[7].

Reflection Prioritization of Risks

Risk	Combined Rating Total	Risk Priority	Rationale for Prioritisation
Schedule Overrun	16	2	On the basis of the risk rating calculated as per consequence and likelihood scores
Technical Faults	9	4	On the basis of the risk rating calculated as per consequence and likelihood scores
Security Attacks	25	1	On the basis of the risk rating calculated as per consequence and likelihood scores
Market Risks	6	6	On the basis of the risk rating calculated as per consequence and likelihood scores
Resource Risks	6	5	On the basis of the risk rating calculated as per consequence and likelihood scores
Quality Risks	5	9	On the basis of the risk rating calculated as per consequence and likelihood scores
Ethical Risks	5	10	On the basis of the risk rating calculated as per consequence and likelihood scores
Scope Inflation	12	3	On the basis of the risk rating calculated as per consequence and likelihood scores
Legal Risks	5	8	On the basis of the risk rating calculated as per consequence and likelihood scores
Health & Safety Issues	5	7	On the basis of the risk rating calculated as per consequence and likelihood scores

Risk Response Strategies

Risk	Option	Explanation of treatment	Rationale for treatment
Schedule Overrun	Avoidance & Mitigation	Audits, reviews, and inspections	Risk Management approach using PMBoK methodology
Technical Faults	Transfer	To third-party vendors	Risk Management approach using PMBoK methodology
Security Attacks	Avoidance & Mitigation	Administrative, technical, and physical security controls	Risk Management approach using PMBoK methodology
Market Risks	Acceptance	Accepted since positive risk	Risk Management approach using PMBoK methodology
Resource Risks	Acceptance	Accepted since positive risk	Risk Management approach using PMBoK methodology
Quality Risks	Avoidance & Mitigation	Quality audits, reviews, and inspections	Risk Management approach using PMBoK methodology
Ethical Risks	Avoidance & Mitigation	Ethics audits, reviews, and inspections	Risk Management approach using PMBoK methodology
Scope Inflation	Share	Communication with project sponsor as the risk will occur due to changes laid out by the sponsor	Risk Management approach using PMBoK methodology
Legal Risks	Avoidance & Mitigation	Legal audits, reviews, and inspections	Risk Management approach using PMBoK methodology
Health & Safety Issues	Avoidance & Mitigation	Health and safety audits, reviews, and inspections	Risk Management approach using PMBoK methodology

Risk Register & Action Plan

Risk No	Risk Category	Risk Explanation including existing Risk Controls	Likelihood	Impact	Rating	Mitigation Approach/Reaction	Likelihood	Impact	Rating
	Initial		Residual
1	Schedule Overrun	The delay in the due dates of project deliverables will deteriorate the customer trust and engagement and will bring down the reputation of the organization in the market[8]. Daily and weekly meetings	4	4	16	Avoidance & Mitigation	2	2	4
2	Technical Faults	There may be unwanted delays that the team may have to go through because of the technical faults ad failures. Technical reviews	3	3	9	Transfer	2	3	6
3	Security Attacks	The security and privacy of the information and data sets may be negatively impacted which may lead to legal obligations as well along with the deteriorate end user satisfaction. Intrusion detection systems	5	5	25	Avoidance & Mitigation	3	4	12
4	Market Risks	The budget of the project may come down with the decrease in the costs of the tools and the remaining cost may be utilized in the betterment of other project areas. Market studies	2	3	6	Acceptance	2	3	6
5	Resource Risks	The resources may be able to finish the project activities before the due dates and the improvements and quality enhancements activities may be done in a better manner. One on One discussions with resources	2	3	6	Acceptance	2	3	6
6	Quality Risks	Non-adherence to the project quality standards will lead to poor customer satisfaction and will also negatively impact the goodwill of the organization. Quality management plan	1	5	5	Avoidance & Mitigation	1	4	4
7	Ethical Risks	Non-adherence to the project ethical standards will lead to poor customer satisfaction and will also negatively impact the goodwill of the organization[9]. Compliance checks	1	5	5	Avoidance & Mitigation	1	4	4
8	Scope Inflation	The budget and schedule of the project will be negatively impacted with too many changes and re-work. The resource engagement and motivation levels will also be poorly impacted. Weekly meeting with sponsor of the project.	3	4	12	Share	2	3	6
9	Legal Risks	Non-adherence to the project legal standards will lead to poor customer satisfaction and may also lead to legal obligations and punishments. Compliance checks	1	5	5	Avoidance & Mitigation	1	4	4
10	Health & Safety Issues	The resources may suffer from temporary or permanent injuries. Audits and reviews	1	5	5	Avoidance & Mitigation	1	5	5

Risk Categories

Risk Rating Scales and Overall Rating

Risk Action Plan 1
Risk No/Item No: 1	Risk Description: Schedule Overrun
Risk Rating: 16	Risk Category: Schedule Risks	Risk Treatment: Avoidance & Mitigation:
Action Plan:
Proposed Action: Audits, reviews, and inspections on project progress
Resource Requirements : Project Manager
Responsibilities: Project Manager
Scope Impact: Project scope unaltered
Time Impact: Project time unaltered
Cost Impact: project costs unaltered
Reporting and Monitoring: Risk review report, risk closure report, audit report
Prepared by: Project Manager	Date: 30-08-2018	Reviewed by: Project Sponsor	Date: 30-08-2018

Risk Action Plan 2
Risk No/Item No: 3	Risk Description: Security Attacks
Risk Rating: 25	Risk Category: Security Risks	Risk Treatment: Avoidance & Mitigation
Action Plan:
Proposed Action: Administrative, technical, and physical security controls
Resource Requirements: Web Developer, Tester
Responsibilities: Web Developer, Tester
Scope Impact: Unaltered
Time Impact: Unaltered
Cost Impact: Cost of technical security tools and controls
Reporting and Monitoring: Risk review report, risk closure report, security audit report
Prepared by: Project Manager	Date: 30-08-2018	Reviewed by: Project Sponsor	Date: 30-08-2018

Monitor & Control Project Risks

Monitor Risk Atmosphere

The monitoring of the risk environment has been done through the risk reviews and control processes. There is a risk status report that is submitted every week that indicates the percentage of activities completed to treat the risk and the ones pending.

There is also a weekly meeting that is organized by the Project Manager with all the team members to obtain and monitor the project risks.

Outcome of Review & Management of Changes

The review outcomes have shown that there is a change in the risk likelihood and impact that will change the risk management approach as well. There are newer risks, such as operational errors that are also observed. The risks will be managed by using a phased approach covering change identification, execution, management, and closure[10].

Assess Risk Management Outcomes

Project Performance in terms of Risk Management – Effectiveness of the Procedures

The project is performing well in terms of risk management as the majority of the risks are in their closure state.

The procedures will be considered as the project is on-track in terms of schedule, budget, scope, ethics, quality, and regulatory policies.

Risk Management Problems

Date	Description of problem/opportunity	Recommended Action for next time/project	Lesson Learnt Raised By
28-08-2018	Communication problems while information gathering for risk identification	Development of communication management plan in advance	Project Manager
30-08-2018	Difficulty in analysis of the huge data sets	Use of data analytics tools	Project Manager

References

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Carvalho, Marly Monteiro de, and Roque Rabechini Junior. “Impact Of Risk Management On Project Performance: The Importance Of Soft Skills”. International Journal Of Production Research 53, no. 2 (2014): 321-340. doi:10.1080/00207543.2014.919423.

Pekkinen, Leena, and Kirsi Aaltonen. “Risk Management In Project Networks: An Information Processing View”. Technology And Investment 06, no. 01 (2015): 52-62. doi:10.4236/ti.2015.61005.

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Serpella, Alfredo Federico, Ximena Ferrada, Rodolfo Howard, and Larissa Rubio. “Risk Management In Construction Projects: A Knowledge-Based Approach”. Procedia – Social And Behavioral Sciences 119 (2014): 653-662. doi:10.1016/j.sbspro.2014.03.073.

Sharma, Satyendra Kumar, and Niranjan Swain. “Risk Management In Construction Projects”. Asia Pacific Business Review 7, no. 3 (2011): 107-120. doi:10.1177/097324701100700310.

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