Project Risk Management in Organizations

Introduction

The success of any project is dependent on the nature of management. Project management requires that the project leader comes up with a plan that clearly details how it will be managed (Harrison and Lock 2017). Hence a project plan is like a roadmap that guides the project team from the commencement to completion of the project to the satisfaction of the customer. Because projects are managed by people, each project leader may have their own way of going about the project. However, there are certain standard processes that have been adopted and proven to work over time. These processes transcend various sectors and are malleable enough to fit different requirements and specifications of most industries, including providing msc dissertation help.

In any project, the first step is the definition of the project. It is important to define a project since it gives one the idea of what the project seeks to achieve. It brings everyone on board with regard to the goals and missions of the project. In the field of project management, there are timelines and objectives that must be met. But the whole process is rife with risks that will affect the project's success (Collins, Parrish and Gibson, 2017). Therefore, a plan is needed to determine the best approach to completing the project with fewer hitches. Project planning is thus the approach used to ensure that projects are accomplished in an effective manner. It is important that a project leader has a good grasp of the project planning process. Project leaders must possess certain skills that will enable them to guide their team to completion.

Project Planning Process

A Project Management Survey conducted by KPMG in 2017 has revealing statistics on project success. It indicates that 40% of organizations that undertook projects completed at least 30 projects. A paltry 21% of projects are consistently delivering on their benefits. Further, only 58% of organizations clearly understand the value of project management (KPMG Survey, 2017). In 2018, about 70% of projects undertaken met the original objectives set whereas around 60% were accomplished within the initially set budget (PMI, 2018). The difference between failure and success in a project lies in the formulation and execution of a project plan. Project planning is not an event but a process that has various components as will be shown in the following discussion.

Scope Planning

This entails defining work involved in the project and all that is needed to complete the project. A project’s scope management plan should thus contain all work that should be undertaken to meet the project’s objectives (Kerzner and Kerzner, 2017). The scope ought to be updated every now and then as the project continues and additional milestones are achieved. A project scope provides the boundaries within which the project team's activities should operate. This being a construction project, it involves complex activities that must be made clear at the outset. At this stage of planning, the objectives of the project should be stated to act as goalposts for measuring ultimate performance and direction. Project objectives should be Specific, Measurable, Achievable, Relevant and Time Bound (SMART) (Pheng, 2018).

For construction projects like the current scenario, the scope statements will give a clearer understanding of the project objectives. First, the statement should be specific as to what is to be achieved at the end, in this case, a sea-bound jetty. Second, the statement should disclose an objective that is measurable so that it can easily be seen that there is an achievement at some point (Pheng, 2018). In a construction perspective, the temporary sea-bound jetty should be capable of delivery and handling of materials in the context of a power station. Third, the scope should be of a nature that is achievable so that it does not occasion failure of the project. In our construction project, it is vital to commit only to what we have the requisite expertise to deliver lest it leads to substandard work.

Fourth, the scope of the project should only focus on what is relevant to the goals of the project sponsor so as to avoid digressing into matters that do not create values to set goals. Similarly, our construction work was planned in a way that the scope covered only activities that were in support of our main agenda of building the required jetty. Fifth, a scope statement should indicate the timelines within which the project is to be completed. The nature of most projects like the construction one we undertook are temporary in that it is to be completed within a specified period of time (Serra and Kunc, 2015).

Project Schedule

Since projects are set to end at a given period of time, there is a need for a schedule that defines the commencement and completion date. In between the beginning and end of the project, there are activities to be undertaken. Therefore, we must identify the activities, arrange them in a sequential manner, evaluate the resources needed, and the timelines for completion (Kerzner and Kerzner, 2017). Project sponsors play a major role in determining the deadline of a given project, hence the leadership. Creating checkpoints for the construction point ensured that we could track the various milestones. Apart from ensuring the successful completion of tasks, milestones are useful in letting all other people involved be aware of the details of tasks.

An effective project schedule should be approved and also endorsed by the stakeholders and other managers to ensure that everyone has understood it and they are on board. An approved schedule represents a project baseline for measuring progress and completion of tasks. Hence the schedule becomes a vital document that offers guidance as to whether the project is on course, behind schedule, or ahead of its time (Atkinson et al., 2016). In the construction assignment, the schedule was displayed in diagrams showing which tasks to be undertaken within a given timeline. This made it possible for each participant to know what amount of effort he should place in work in a day to remain within the set timeline.

In some cases, projects may be disrupted mid-way when the schedule is altered owing to a shift in goals of the project. Due to the advancement in technology, a project schedule can be developed using software. For complex and larger projects like the one my team was engaged in, it is advisable and we did use a graphical schedule to bring out the details better (Burke, 2013). While there is numerous software available for use in any industry, the construction sector requires a unique one. Microsoft Project, while very effective and applicable to many sectors, may not be suitable for a construction project. In our construction project, we applied the (construction) industry-specific software known as Primavera P6.

Cost Management

Projects are fueled by money, and large projects like building a temporary sea-bound jetty are capital-intensive. A project plan should thus have a budget to cater to the activities and resources needed for its completion (Heagney, 2016). As a project leader, it is vital to create estimates of the project costs in relation to the tasks involved. The amount of time the project is likely to take and the cost involved are usually known beforehand and it is from this information that comparisons can be made between expected costs and the actuals. In order to determine the costs of resources in the construction project, an evaluation of the materials needed to complete a given task will suffice. Cost management was important to our project because it entails estimation, planning, financing, budgeting, managing, and overall regulating actual costs by ensuring that everything is accomplished within the set budget.

Resource planning is one of the ways of cost management. Our project leader had already defined the amount of resources needed to complete the task. To do this, Work Breakdown Structures and information on other previous but similar projects helped in the estimation of the nature of resources needed to construct the jetty. Considering that the nature of our project involved physical resources, the same must be broken down into the specifics (Shackman et al., 2019). This means that the team had to consider specific factors in relation to materials, labour, time, equipment, tools among others. With the knowledge of the specific physical resources needed for the project, it was easier to project the costs and come up with a suitable budget.

Cost estimation is useful in coming up with expected costs of the project. It basically enables one to predict the cost of the project before it even begins and there are different methods of going about it (Collins, Parrish and Gibson, 2017). Depending on the amount of information that is available to the project planners, a suitable method will be used. The most notorious methods of estimating costs of a prospective project are analogous and parametric models. While the former involves the use of actual costs of projects done before the current one to determine the probable cost, the latter involves the representation of the project’s features in a mathematical format. However, these methods are not a guarantee on the actual cost of the project. The actual cost may rise higher than the estimates or fall below. Either way, it is advisable to reserve costs in the budget to cover for similar contingencies.

In spite of the estimations and budgeting, there is need to ensure that there are no variances from the cost baseline. This falls under cost control which entails measuring any discrepancies from the set cost baseline with an aim of implementing policies to maintain low costs (Atkinson et al, 2016). Usually, a variance in costs is noticeable when there is effective monitoring of expense and performance against the out. The out in this case is the progress of the report in line with project the schedule. When costs are not effectively controlled there will be a glaring variance that leads to cost overruns which is not good for any project. The occurrence of cost overruns can disrupt project progress and lead to a stall until a new agreement is reached by the client. In the recent construction project cost control software was used to track any variances in costs and to simplify reporting. This made it possible to have all the stakeholders on board because they can see real-time costs of the project as it progressed.

Quality Planning

Everything could have been done right in a project but it would still be considered a flop if the end result does not ooze quality (Kerzner and Kerzner, 2017). In the construction project, we strived to ensure that our client got exactly what he had asked as well as what we promised to deliver. Quality is a very important element in project management and it will determine whether the team gets its next assignment or otherwise. In order to know the quality of the end product required for a given project, there must be an understanding of the client’s or project sponsor’s needs with regard to the product (de Carvalho et al., 2015). What the project team on the ground considers as quality may not be same as what the stakeholders had in their mind. Such differences will definitely cause costly disputes between contractors and the project sponsors or stakeholders.

As a result, our team in the jetty construction took into account the art of customer satisfaction. This was to make sure that the project owner would find that the completed jetty met all his expectations hence a satisfied client. To get to know exactly what our client wanted, I had to take time to write down exactly what he desired of the end product. In as much as it is proper to note down the client’s needs there are certain requirements of property that one is expected to adhere to by virtue of reasonableness even without being expressly stated (Kivilä, Martinsuo and Vuorinen, 2017). For the project I engaged in, we had to deliver to our client a jetty that was capable of delivering and handling materials for the constructions of materials. It means that if the final product was not able to perform the said functions it would definitely be unfit for purpose.

Risk Management

It is not all the time that things go according plan or schedule no matter how proficient one is. There is bound to be some mishap in the expected order of things. It could be that the cost off the projects has risen sharply, there is delay and the project is behind schedule or the designs do not meet the required specifications (Willumsen et al., 2019). Either way, the risks inherent in project planning can be both internal and external in nature. In some extreme cases, the reasons hindering progress or completion of the project are beyond the control of the team and are were totally unforeseeable (Paquin, Gauthier and Morin, 2016). As a project leader you should prepare for the worst but expect the best. While we did not expect a tsunami to hit our project site at any time, we were adequately prepared to mitigate its effects if it ever occurred.

Risk planning is entails identifying the problems that could possibly interfere with project, analysing how they could possible occur, taking informed action to preclude those that are avoidable and minimizing those beyond our control (Hopkinson, 2017). Risks are uncertain events or conditions which can be either positive or negative or both. Therefore it is in the best interest of the project members and stakeholders that there is a contingency plan and mechanisms in place to reduce the impact of unavoidable risks (Burke, 2013). The result of risk is that it interferes with the schedule and budget of the project forcing the team to do things differently or stop altogether.

For the construction project, we had in place a backup plan in case the supplier of some of the materials delayed or totally failed to perform his end of the bargain. As the project leader, I identified steel beams as one of the essential material required daily at the site. And I realised that if supply were to delay or stop 70% of work would be halted. Realising that this was detrimental we made a contingency plan for a surplus stock to be stored within the site. This foresight ensured that work continued smoothly even when there were delays in delivery. Risks are uncertain and also inevitable in projects. There are four established ways of handling risk in any situation.

First, avoiding the risk at all cost. If it is possible, escape from the risks but where the risk can be prevented it is advisable to act accordingly. Second, mitigate the risk in case you are not in a position to avoid it. Mitigation of the risk means reducing the impact of the risk on a project. In the construction project, ill health of skilled workers can be mitigated by bringing in other people even though not as familiar with project as the sick employee (Hwang and Low, 2012). Third, transfer the responsibility of bearing the risk to another person, probably an insurance company. In this regard, all materials purchased for the construction project were insured while on transit to the site to avoid total loss in case of any accidents. Lastly, accept the risk where it is entirely impossible to avoid, transfer, mitigate or accept the risk. Acceptance thus becomes the last choice and the consequence must be borne.

Change Management

Generally, people do not like change because it is an unknown that displaces the status quo, comfort. Change is one of those activities that causes a disruption in an organization. This disruption must be dealt with in order to effect the change. The management of change may be two-faceted in that it is handled both on the people side and the technical side. Managing change on the people side should be aimed at involving top tier management before any decisions are made or encouraging participation of the employees (Lavasseur, 2010). Participation brings about a sense of belonging since people will feel that they are actually part of the changes taking place at the organization or project. It is important to maintain channels of communication and feedback so that the progress of change can be monitored. Again, the management should provide the employees with the necessary structure, process and tools for effecting the changes.

In the jetty construction assignment, there was a change in schedule since the delivery date had been pushed back. This meant that delivery was to be done much earlier required a speedier completion of the project. There was a massive disruption as new machines were introduced and more members added to the project. As the project leader I was faced with the task of integrating change management into project management objectives. To achieve the desired results, I applied Lewin’s model of change management. This model involves unfreezing the process, making changes then refreeze the new way of doing things in the project (Joslin and Muller, 2015). The model is suitable where there is need to drastically change things to achieve a desired result, just like the construction project (Mir and Pinnington, 2014).

During the construction of the jetty, I was the project leader in charge of various teams and workers. In order to execute a successful project, I had to adopt the skills of astute project managers. I ensured that the channels of communication were open and feedbacks collected (Serra and Kunc, 2015). Again, I polished my presentation skills so that I was able to pitch ideas to various clients and stakeholders. Adopting good leadership skills including the ability to mediate and negotiate where possible. Negotiation is a skill that is used in cases where there was need for compromise especially with regard to stakeholders and team members

Conclusion

Looking back at the jetty construction project, I have few regrets because I did a lot of things in line with project planning guidelines. Perhaps, risk management was not handled well enough and it might be necessary to effectively and efficiently manage risks in future. Therefore, the process of identifying, assessing and controlling risk will be applied extensively to cover all the vulnerable areas of the project.

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