Risk management plans documents the processes, tools and procedures that will be used to manage and control potential risks that could have a negative impact on a specific project. The document also works towards minimizing and eliminating impact of those events as well as subsequent changes that could occur with the project as a result of the risks. Risk management is a process that is ongoing throughout the span of the project and is an important part of project management.
Potential issues that could have occurred had the team not created a risk plan could have been detrimental to the success of a project. The variables within the Satellite Development Project in the manufacture of components, integration of systems, working with subcontractors, tests, and other areas made the project full of risk (Kloppenborg, 2012). One issue that could have developed without a risk plan would be the number of unknown variables within the project increasing as the project matured. Another issue is the risk of not being ready to respond to unplanned events. Risk Management plans prepares a practical way to handle risks of projects. With a risk plan, the Satellite Development Project was able to prepare a response to risks if and when they occurred.
Major impacts of risks that the team needs to understand for the project to be successful is process timing and risk finances. The satellite development project was on a tight timeline for production and required frequent risk reevaluations because the project was high risk. This has a major impact on the project because high risk events are likely to cause a significant increase in the budget, disruption of the schedule or performance problems. Risk finances deals with funds set aside specifically for risk within a project. Limited finances available for projects can create a downfall for the organization as well as unexpected cuts.
Risk management plans protects the value of a project by decreasing the probability, impact and occurrence of risks to the project. Risk plans helps the organization to excel with reliable, timely, and current information on risk. This information systematically works with the risk of the project when the risk is identified and the degree of impact to the schedule, scope, cost, and quality of the project is prioritized. By prioritizing risks, project members are able to respond to risks and plan for risks quickly. This course of action saves time, money, and resources. The goal is to identify resources to protect and obstacles to overcome.
The project manager’s responsibility is to assist project members and all appropriate stakeholders in identifying and documenting known and unforeseen risk. As project manager the recommendation to ensure the project meets the critical path identified is to develop a risk plan and criteria to evaluate and prioritize risks. From there, researched and compared methods for implementation is performed. The recommendation would also involve an integration tool that allows all members of the project to actively engage in sharing new risk, providing input for potential solution to the risk as well as view and provide feedback towards other project member’s entry of risks. This begins with a description of the project followed by probability risk occurrences. Next, a schedule, scope, quality and cost impact are created to determine the length of time a risk factor could impact the schedule, the impact the risk will have on the project budget, and envisioned accomplishments as well as determining if the risk will affect the quality of work.
To assess how to determine the level of risk management appropriate for a project, there should be risk plans in place for unexpected risks that may occur as well as a determination of the impact of possible and predicted future risks. The process includes the following procedure;
Identify risks that could cause project failure
Transfer all risks to proper stakeholders and members
Prioritize and rank identified risks in order of impact towards project
Rate and calculate the risk of high significance, probability, and controllability
Narrow the project scope to the most crucial risks and plan how to minimize impact if occurred
Assign each project member a specific risk to eliminate the most crucial risks
Monitor and review risks
The level of risk factors is determined by Organizations and team attention to project execution in order to deliver impactful projects.
If the team working on the satellite development project was a virtual team in which team members were unable to meet in person the expected impact on the project would be the same. In the satellite development project, project members would utilize a database system that each member could use individually to log in risks. Every other month, the project team would hold a risk management review, in which each risk would be discussed and any decisions on actions would be made. Both of these methods can still be used in different ways to maintain and achieve its current goal in both planning and execution. Instead of meeting in the physical every month to review and analyze risks, project members can have an online session that includes only appropriate stakeholders and project members. Each person are still allowed to discuss any areas of the project that might have been impacted by the risk that resulted from the occurrence of the risk, or provided potential ideas for deferring, transferring, mitigating, or accepting the risk. The team will continue to virtually determine whether the risk decision needs to be elevated through live video sessions. Also, the integral database would still be accessible for members to review, add, and discuss all risks.