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The five common project risk strategies
Literature review in project risk management
Five common project risk strategies
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In today's commercial market environment, competition and globalization has increased dramatically. The excessive cost arising from inefficient processes and operation have been considered to be the major causes of losses to the organizations over the past several years. Several organizations, particularly larger companies, recognize the need to hedge and manage against undesired risks. Software development is presently one of the most common risk issues. Adler et.al., (1998) reveal that the software development project includes risk events that can cause damage to improving processes. Moreover, it would be an error of judgment to overlook the significant risk areas of the project as this will impair decision quality and impact massive product changes. Raz et.al., (2002) describe project risks as adverse events that can cause delays, surplus expenditure and dissatisfaction with the project outcome. Apart from this, each project varies in size, duration, uncertainty, complexity, objectives, limitations and others. In an effort to enhance the quality of procedure and minimize the risk profile, better execution and implementation will also reduce undesired performance. Adler et.al., (1998) note that there is a tendency to claim that Cleanroom approach would be more appropriate to improve the overall trustworthiness and quality assurance issues. This essay will first describe how the effects of software risks have a direct impact on day-to-day business activities. It will then define how software risk management plays an important role in coping with the project risks. In the second section, it will introduce two software risk management models namely the Software Risk Evaluation model (SRE) and Cleanroom Softw... ... middle of paper ... ...able for software engineers to monitor quality control that can be scientifically verified in a formal statistical diagram. In a study, Raz et.al., (2002) point out that there is a continuing requirement for an adaptation from the different risk management techniques to the different kind of projects and the improvement of the specific devices to mitigate risk from several different type of projects. In essence, it could be said that many organizations increasingly recognize the importance of software risk management to ensure accessibility of the overall information of the project risks. What is more, Ward (2005) concludes that a company which constantly develops risk management tends to gain a competitive advantage, and it appears probable that a well-defined software risk management practice can assist to increase the company's competitive advantages as well.
Methanex has a considerably smaller number of staff working at its production plants due to technological investments made to computerize and mechanize their facilities. This resulted in reduced staffing costs within facilities, providing a cost driver advantage that allows Methanex to spread fixed costs further and forward lower costs to their customers, retaining their position as a cost leader. After analyzing with the VIRO framework, once again this resource was determined to be a competitive parity due to easy replication from competitors since there was no protection of the technology and mechanization systems utilized.
Hillson, D. & Simon, P., (2012). Practical Project Risk Management, The ATOM Methodology: Second Edition. Vienna, VA: Management Concept Press
Generally, the software projects that failed are evaluated in terms of cost, time, human resources (employees involved in project), Objectives caused to start a project have to be changed. The failure of the software projects may happen at any level sometimes at designing phase, requirements phase, etc. Many researchers, summarized that the main reasons for projects failures are:
Well-Stam, D. . (2004). Project risk management: An essential tool for managing and controlling projects. London: Kogan page.
Hillson, D, & Simon, P. (2012). Practical project risk management: The ATOM methodology (2nd ed.). Vienna, VA.: Management Concepts.
Risk analysis is any activity that seeks to examine every identified risk so as to polish the description of that particular risk, isolate the various causes, ascertain the effects of such a risk as well as assist in devising possible mitigation measures (Lari, 2009). A change in either schedule, cost or performance can lead to consequences in the other factor. Analysis begins with a comprehensive study of those risks that have been recognized. The goal is to gather enough information possible future risks so as to know the basis of their existence, their chances and the consequences in the event that they were to occur. Risk assessment underlies (In addition, it is the project manager’s role to show the impact on the three constraints and thereafter create the necessary balance between them. Besides, the Iron Triangle is one of the best tools for discovering the priorities and motivation of the various stakeholders as well as how well the project is understood) discrete actions to identify and analyze the
Our most important goal, as previously stated, is to examine and evaluate our current risk management team. An effective risk management team will be able to easily identify a project’s strengths and weakness, and as a result, they will also be able to generate strategies to aid or hinder that project (Duggan “Why is Risk…”). I call out our current risk management team in
In the world of software development, there are at least five risk management methodologies. Boehm’s Software Risk Management model focuses on the concept of “risk exposure” as defined by the relationship where the probability of an unsatisfactory outcome and the loss due to the unsatisfactory outcome determine the valence of the risk event. The method developed by Boehm is the original Risk Management
Risk management is among the most important practices in the field of project management. A successful project completion and risk management often go side by side. An interesting aspect of project management is that a project can sti...
These are the specific risks involved to a particular project or program. The organisations continuously undertakes specific projects, which should be managed with consistency with the legal obligations to be kept in mind. There are significant program management methodology which spell out the requirement and clear risk management approach within the project environment and align by the whole of the AS/NZS ISO 31000:2009 Risk management – Principles and guidelines.
Another effective way to reduce risk is for companies to purchase business-interruption insurance. This type of insurance used to be generally easy to obtain. Today, insurance companies require a lot more information before providing the service to companies. Not only do they require more information on a company's suppliers, the insurers also require that you have a list of multiple suppliers that, if an isolated disaster or accident occurs, wouldn’t all be affected. Companies need to maintain their JIT processes, eliminate redundancies, and at the same time keep a minimum number of suppliers to minimize risks.
This paper will reflect on the different uses of Project Risk Management and ways in which it can benefit organizations to have the ability to identify potential problems prior to the problem occurring. Risk, this is not something to be taken lightly whilst dealing with matters that include high end projects meeting specific details, deadlines and expectations for the end client. Project risk management teaches one to be aggressive early on in the phases of planning and implementing the tools for a project. This is usually easier as costs are less and the turnaround time to solve the issues at that present moment is beneficial rather than later. The result in a successful project for one’s self and other key people involved in the process is also another requirement. Stakeholder satisfaction is important because the
Over the past decade, risk and uncertainty have increasingly become major issues which impact business activities. Many organizations are raising awareness to minimize the adverse consequences by implementing the process of Risk Management Framework which plays a significant role in mitigating almost all categories of risks. According to Ward (2005), the objective of risk management is to enhance a company’s performance. In particular, the importance of the framework is to assist top management in developing a sensible risk management strategy and program.
In order to image the management of a project by the risks, it will not be necessary, in spite of everything, to neglect the other risks detected. The entire Project team is sensitive to these events that hinder the smooth running of this project, which is why it particularly appreciates the role of the person in charge of risk monitoring, whose mission is to monitor and correct each project defined risk, in order to limit its criticality, and thus allow the project team to focus on its tasks to achieve the project objectives.
Risk Management allows us to identify the problems which are unknown during the start of the project but may occurs later. Implementing an efficient risk management plan will ensure the better outcome of the project in terms of cost and time.