Plan for Reviewing Risk Responses
Risk response planning is an inherent part of the risk management procedure. It is commonly initiated once the risks are identified and quantified. Once the preliminary information is available on time and financial requirements of risks, it becomes possible to integrate risk management strategies into the project’s budget and schedule. Thus, to achieve the necessary level of integrity, risk management at this stage should be viewed not as an auxiliary measure, but rather as an integral part of a construction process. During the risk responses review phase, a specific action plan needs to be established, and fall back plans need to be outlined in order to increase responsiveness to risks.
It is important to note that to achieve the desired level of consistency, risk management reviewing process needs to be performed on a regular basis. This approach allows for more accurate detection of events, thus creating an opportunity to respond through a proactive approach. In addition, it improves the process of obtaining knowledge on the nature of risks associated with predicted events. Next, the possibility of avoiding false definitions and inaccurate assumptions improves the quality of decision-making. Simultaneously, the higher accuracy of risk-related information allows for more reliable communication and permits greater transparency and clarity of the process for the stakeholders. Finally, the risk responses review process provides the data necessary for scenario planning, contingency planning, and assists the benchmarking process by providing the information on delivery of objectives, quality benchmarks, and cost limits. The described review process is expected to produce a document that would include a risk management plan, a list of prioritized risks, rankings of the most significant risks, a list adjusted for risk priority and an estimated cost, and an overall probability analysis of the project (Burtonshaw-Gunn, 2009). In addition to the reduction of the identified risks’ probability, the risk responses review process should include a mitigation aspect.
Reviewing risk responses also necessitates the identification of minor risks that have been addressed through contingency planning at the previous stage of risk management and, more importantly, the risks that may arise as a result of the implementation of an initial risk response. It is also important to develop contractual agreements that would outline the responsibilities of all involved parties as well as information on risk mitigation, such as insurance. Once contractual agreements are available, it will then be possible to identify contingency via probabilistic analysis. Finally, it will be necessary to detail the expenses associated with the responses and integrate this information into the project plan to ensure the integrity of risk management.
Project Risk Communication Plan
Communications Matrix
Memo to the Project Sponsor
In order to understand the risk approach selected for the project, it is first necessary to understand the rationale for selecting a project method. The project at hand utilizes the agile method, which offers several advantages. First, it allows for dynamic adjustments in the planned process without disrupting the workflow. Second, it provides an opportunity to introduce updates to keep the project consistent with the latest development in the construction industry. Third, evaluation of the project’s priorities inherent to the agile method ensures that the stakeholders are able to participate in the process. Finally, consistent testing of the product throughout the development cycle enables the project team to follow the timeline more closely. It is also worth mentioning that the agile method minimizes the inherent risks common for a modern dynamic environment, such as overlapping stages, excessive length of some stages, and poor quality control.
The risk identification process used for the project consisted of identifying objectives and success factors, obtaining relevant data from available sources, applying tools and techniques for identifying major risks, documenting the identified threats, logging the risk management process, and evaluating the effectiveness of the process. This approach is suitable for the project for several reasons. First, it ensures the reliability of information necessary for an accurate and relevant assessment. Second, it facilitates a systematic treatment of risks in accordance with the outlined objectives, thus contributing to the overall transparency of the process. Third, the assessment of the method’s performance provides a better understanding of the feasibility of the decisions made in the process. Coupled with documentation and logging, this information enables the company to replicate and enhance the procedure in similar projects in the future, allowing for consistent improvement.
Both qualitative and quantitative risk analyses were used in the course of the project. For qualitative risk analysis, a pre-determined scale was used to prioritize the identified risks. Each option is assigned a score based on its probability of occurrence and matched with the most appropriate response based on it. This type of analysis is useful for outlining a generalized direction of risk management. On the other hand, the quantitative analysis provides the means of in-depth analysis of high-priority risks through a number of well-defined measurements. The quantitative analysis is less flexible and more resource- and time-consuming, which makes it unsuitable for universal use. However, it generates more accurate data, which allows for more appropriate resource allocation.
It is worth noting that some of the commonly used strategies were not used in the project. For instance, avoidance was not included in risk response planning due to organizational restrictions. Specifically, neither of the identified risks could be removed without introducing major changes in the project’s scope, timeframe, and resources, for which reason acceptance and mitigation were used instead. In addition, risk transference was not implemented since none of the parties involved in the process could accept the responsibility at the agreeable terms.
Several areas of the risk management process demonstrate the potential for improvement in the future. For instance, it would be possible to identify certain aspects of risk management that can be integrated into strategic management activities. This approach will provide an opportunity to better control the expenses associated with risk mitigation and acceptance and proceed with the project’s objectives consistently and without delay. It is also recommended to seek ways of establishing more robust communication channels with stakeholders in order to promote trust between stakeholders and, by extension, increase the overall risk resilience necessary for risk acceptance strategy.
Reference
Burtonshaw-Gunn, S. A. (2009). Risk and financial management in construction. Burlington, VT: Gower Publishing, Ltd.