Risk Management Concepts and Guidance

Questions: 1.Identify at list 2 project risks in the following risk categories? 2.List and describe the key components of a risk management plan? 3.Research the industry sector risk classifications for three of the industry sectors listed in the table below and relate them to different risk contexts? 4.Choose an organisation that you are familiar with and summarise their organisational and industry standard risk frameworks? 5.Identify and describe the characteristics, techniques and appropriate applications of at least two qualitative and two quantitative risk management techniques and approaches? Answers: 1. Risk Category Project Risks Operational Risks Failure to support project Conflict among executive stakeholder disrupts project Strategic risks Strategy Execution Risk Corporate governance risk Budget Risks Scope Creep Gold Plating Information and Security Risks Unauthorized access to information and systems Information disclosure Quality and Process Risks Low quality process inputs Resource shortfall Technology Risks Inoperability of technology Technology non-compliance Supplier Risks Disengagement Inaccurate expectation Human Resource Risk Succession Planning Insurance and data Business Environment Risks Infrastructure constraints Economic Upheaval 2. Elements of Risk Management Plan Description Roles and Responsibilities This section deals with describing supporting and leading roles in the process of risk management. Budgeting This section discusses budget to manage risks of a project (McNeil, Frey Embrechts, 2015). Timing This section deals with defining the time of performing risk assessment and management Interpretation and Scoring It defines risk interpretation and scoring methods suitable for quantitative and qualitative analysis Thresholds It is the way through which risk significance is measured (Chance Brooks, 2015). Communication Demonstrates how risk details would be documented. Auditing and Tracking Risk activity facets would be recorded for the current projects benefit. 3. Risks can be classified based on the industry sectors. Hence, three industries such as manufacturing, retail and food industry can be considered (Hopkin, 2017). In these three industry sectors, the project risks can be classified into the executive support risks, scope risk, cost management risks, change management risks, stakeholder risks, communication risks, resources and team risks, architecture risks, design risks, technical risks, integration risks, requirement risks, risks associated with decisions and issue resolution, procurement risks, authority risks organizational, external and project management risks. 4. In order to mitigate the risks associated with the projects of Woolworths; this organization has adapted few significant organizational and industry standard risk frameworks (Pritchard PMP, 2014). Woolworths has implemented three risk assessment frameworks such as Risk Ownership and Management, Risk Oversight and Independent Assurance. 5. Qualitative Risk Analysis technique Risk Assessment Matrix and SWOT analysis are the major qualitative risk management tool. RAM is such a tool that is aimed to help in determining which risks need to develop a risk response for (McNeil, Frey Embrechts, 2015). SWOT matrix is such a risk analysis tool which assesses the strength, weakness, opportunity and threat associated with a specific product. Quantitative Risk Analysis Technique Decision Tree Analysis and Expected Monetary Value Analysis can be selected as two of the most significant tools (Chance Brooks, 2015). The EMV analysis is the statistical concept that calculates the average outcome while the future incorporates scenarios that may or may not happen. Moreover, Decision tree analysis is structured mainly through the decision tree diagram that demonstrates a situation under consideration and the implications of every of the possible selections and available choices (Pritchard PMP, 2014). References Chance, D. M., Brooks, R. (2015).Introduction to derivatives and risk management. Cengage Learning. Hopkin, P. (2017).Fundamentals of risk management: understanding, evaluating and implementing effective risk management. Kogan Page Publishers. McNeil, A. J., Frey, R., Embrechts, P. (2015).Quantitative risk management: Concepts, techniques and tools. Princeton university press. Pritchard, C. L., PMP, P. R. (2014).Risk management: concepts and guidance. CRC Press.