Risk Management Identification Risk
For successful project managers, ignoring risk management is not an option. In the words of the great Sir Winston Churchill, we must “let our advance worrying become advance thinking and planning.” The identification of risks must be planned and incorporated into project definition and ongoing throughout the life of the project to prevent the need to consider and manage a crisis (Schwalbe, 2014). The project manager for Industrial Supply Industries (ISI) has been given a new project to initiate to enable their employee community to maintain some of their own personal human resource (HR) data.
ISI is a fast growing company in need of restructuring its human resource team to support its growing employee community …show more content…
With this integrated perspective, ISI can strive to gain competitive advantage within its industry through employee growth and satisfaction. “Ingrained culture can be difficult to change” (Dallas, 2006), yet with the balanced approach to managing the positive and negative risks the project team can create value for the project.
Management of the positive risks is equally important using an integrated risk management model when it is determined the risk runs the potential to produce too much of a good thing resulting in an undesirable outcome. Identifying the best strategy to address each risk during risk management planning is equally important. When implementing enhancements to a manufacturing system, the team had previously ranked risks using a decision tree diagraming and expected monetary value technique measuring the potential financial value associated with each risk (Schwalbe, …show more content…
Potential increase in cost associated with the self-service enablement for managing pension plan contributions is perceived as a negative risk by the plan administrator, Sue. Presently, the company who manages the investments charges a change fee for each change and this fee is absorbed by the company as an employee benefit. In theory, an individual could login and make changes to their contribution amount on a weekly or more frequent basis driving up the cost to manage the plan.
• The project team has decided to use this as an opportunity to place a limit on the potential expenditure by the company for this benefit. Although the cost to change contributions will still be covered, a limit of 10 changes per employee per calendar year will be implemented within the application. This solution in essence enables placement of a cap on this portion of the employee benefit budget.
2. Glenn, the Application Development manager suspects the budget for the project was severely overestimated and is concerned about the perception the Finance department will have when presented with future projects by the project manager.
• The project manager suggests the team reallocate the budgeted funds to a high-profile risk item yet to be