Description
Risk Breakdown Structure for an International Training Facility Project
Identifying and managing project risks are critical tasks for project managers. From a project management perspective, risks must be managed from the start of a project until its completion; therefore, a Risk Breakdown Structure (RBS) is an important tool that project managers use to successfully complete projects. Assume that you are a project manager who is to manage a project to set up a training facility in China to teach project management classes. This project is to be completed within a two- month period, starting from today.
1. Identify the risks in the form of "cause-risk-effect," as described below:
One of the most common risk-identification mistakes is considering things to be risks when they are not. One approach is to treat anything with a probability of greater than 80 percent as a certainty. "Lack of resources" is not a risk, nor is "not enough time to complete the project." If it is known that the length of time required to complete a project is shorter than the time allocated, then this is not a risk—it's a fact. Such facts should be addressed in the project management plan through crashing, fast tracking, re-estimating, removing scope, using other forms of schedule compression, and bringing the situation to management, but not as part of risk management.
"To differentiate risks from facts and to adequately define risks, use the ‘cause-risk- effect' format for naming risks: As a result of (definitive cause), (uncertain event) may occur, which would/could/may lead to (effect). Such definition of risks provides enough information for the team to follow the rest of the project management process. See the following examples of risks in the cause-risk-effect format:
- As a result of lack of clear direction for the scope of work for the XYZ component, there could be rework and wasted efforts, which could delay the project completion from two to four weeks.
- As a result of the amount of work the customer is trying to accomplish on many projects during this project's completion, a delay in the response to our requests for approvals may occur, which could result in a two-week delay in project completion. Effects could relate to project objectives, project constraints, and risk tolerances." (Mulcahy, 2003, p. 90)
2. Discuss and analyze the importance of each of the four types of risk identified in Figure 11-4 (technical, management, commercial, and external).
3. Create a risk breakdown structure and attach as an appendix (see attached sample and use the blank RBS linked under this assignment in Module 2).
4. Discuss the importance of creating an RBS.
| RBS LEVEL 0 | RBS LEVEL 1 | RBS LEVEL 2 |
| 0. ALL SOURCES OFPROJECT RISK | 1. TECHNICAL RISK | 1.1 Scope definition |
| 1.2 Requirements definition | ||
| 1.3 Estimates, assumptions, and constraints | ||
| 1.4 Technical processes | ||
| 1.5 Technology | ||
| 1.6 Technical interfaces | ||
| Etc. | ||
| 2. MANAGEMENT RISK | 2.1 Project management | |
| 2.2 Program/portfolio management | ||
| 2.3 Operations management | ||
| 2.4 Organization | ||
| 2.5 Resourcing | ||
| 2.6 Communication | ||
| Etc. | ||
| 3. COMMERCIAL RISK | 3.1 Contractual terms and conditions | |
| 3.2 Internal procurement | ||
| 3.3 Supplies and vendors | ||
| 3.4 Subcontracts | ||
| 3.5 Client/customer stability | ||
| 3.6 Partnerships and joint ventures | ||
| Etc. | ||
| 4. EXTERNAL RISK | 4.1 Legislation | |
| 4.2 Exchange rates | ||
| 4.3 Site/facilities | ||
| 4.4 Environmental/weather | ||
| 4.5 Competition | ||
| 4.6 Regulatory | ||
| Etc. |
(Source: PMBOK, 2017, Figure 11-4)
5. Reach out to at least one other student and discuss your findings about project risk management, based on your review of the case study, to gain greater insight into the main considerations in managing projects. Include the name(s) of the other student(s) with whom you collaborated, and specify the value added by your collaboration with your classmate(s) and what new insights you gained. (Your collaborating colleague(s) do not need to choose the same Critical Thinking option as you do.)
Your well-written paper should meet the following requirements:
- Be 3-4 pages (900-1200 words) in length, not including the cover page, references page, or appendix. (Remember that the appendix follows the references page.)
- Be formatted according to the CSU Global Writing Center (Links to an external site.).
- Cite a minimum of three sources to support your responses, two of which should be current academic, peer-reviewed, scholarly sources. Note: Current research in this class means the most recent five-year period. Although research older than five years may be used, it will not count toward the assignment requirement. The CSU Global Library is a great place to find these resources. Additionally, in the Module 1 lecture material, you were reminded of what constitutes academic, peer-reviewed, scholarly sources and how to find them in the CSU Global Library.
- Demonstrate thoughtful consideration of the ideas and concepts that are presented in the course, and provide new thoughts and insights related directly to this topic.
Refer to the Critical Thinking Assignment grading rubric below for more information on assignment expectations and grading.
References
Mulcahy, R. (2003). Risk management: Tricks of the trade for project managers: A course in a book. Minneapolis, MN: RMC Pub.
Project Management Institute. (2017). A guide to the project management body of knowledge: (PMBOK® guide) (6th ed.). Newtown Square, PA, USA: Project Management Institute.
Explanation & Answer
View attached explanation and answer. Let me know if you have any questions.
1
Identification of Risks in Project Management
Student’s name
Institution Affiliation
Course
Professor
Date
2
Question 1
Identification of the risks in the form of cause-risk-effect
Identifying risks in project management is essential because it helps one develop a broad
understanding that can be weighed to influence stakeholders to make a better decision.
According to Aven (2016), risk identification helps to determine the strengths, weaknesses,
opportunities, and threats in the projects. In project management, it is also critical to identify the
risks in the form of cause-risk-effect. Unavailability of resources will make the training facility
in China fail to deliver the expected scope, complete on time, and fail to stay within the budget,
affecting the tasks involved in the critical path. Lack of communication may lead to low morale,
whereby ineffective communication may cause misunderstanding, misinformation, and mistrust,
contributing to the project failure. Communication is an essential skill in any business or project
because it helps in decision-making, improves managerial efficiency, and promotes cooperation.
Inadequate tools or technology may lead to failure in technical performance measurement, which
contributes to substandard work. Project management tools are important in setting up a training
facility in China because it helps managers identify the hierarchy of activities for effective
completion. An inadequate quality standard could make the project lose its business, liability,
and productivity, leading to increased the project's cost.
Question 2
Importance of the four types of the risks
Technical risks
Technical risks are occurrences that could harm the project, system, or the whole
infrastructure. Technical risks can be in the form of technical process, technology, resource,
integration, and resource risks, infrastructure, and innovation risk. Moser et al. (2017) claim
3
technical risks prevent activities from occurring, which increases system problems.
Technological risks may cause damage to the reputation of the company. A project may face
technological risks such as cyber-attacks and service outages. Technical risks may be essential to
the project because it helps to improve technology and innovations. Identifying technical risks
may help the project manager develop strong strategies that may help protect data and improve
an organisation's security. Technical risks enable the project manager to conduct a technical risk
assessment that helps create awareness of the dangers and identify who may be at risk.
Management risks
Management risks may be associated with the organization, resourcing, communication,
contractual terms and conditions, internal procurement, supply, and vendors. Market financial,
operational, culture, fraud, and strategic risk may also affect an organization. A project may have
the possibility of losing money on an investment. The main purpose of communication is to alert
people about hazards. When there is ineffective communication in the project, management may
cause risks such as misunderstanding and mistrust. Communication is an essential skill that helps
project managers to make effective decisions. Management risks are essential in a project
because they will help the project manager be keen on financial issues, develop effective
communication, and mitigate fraud risks. The risks will also help the project managers be keen
on contractual terms and conditions, contributing to the project failure.
Commercial risks
Commercial risks may include risks associated with subcontracts, legislation, partnership,
customers’ stability, exchange rates, and site facilities. Partnership issues may arise when the
stakeholders have not reached an agreement. Commercial risk analysis is essential because it
helps the project managers determine whether the project makes sense to every party. It also
4
helps estimate whether the project can be completed on time and the project stays within the
budget. By conducting commercial risk assessment, it may help identify the nature of the
business, financial strengths of the customers, consumer record of meeting local and
international payment obligation, and nature of the relationship with the customers.
External risks
External risks include competition, regulatory, and environmental risks. According to
Adger et al. (2015), environmental risks are the consequences of unwanted accidents. This may
happen because of poor waste management, treatment, and disposal. Environmental risks may be
caused by a natural disaster which may lead to the physical destruction of the property and
assets. Damage raw materials and cause supply chain disruptions. Competitive risks may prevent
the project from achieving its go...
Review
Review
