Project Management: Limitations of Available Risk Identification Methods and Optimization - Assignment Example

Project Management By Business of Table of Contents Table of Contents 2 Introduction 3 QUESTION ONE 3 Risk Identification Methods 4 Brain storming 6 Advantages of Brainstorming 6 Disadvantages 6 Flowchart Method 7 Advantages 7 Disadvantages 7 Optimization relative to appropriate method combination 8 QUESTION TWO 9 QUESTION THREE: 12 List of references 15 Introduction Project management refers to the process which involves sub-stages such as planning, organization, motivating, and managing or controlling of the requisite resources and the necessary procedures for completion of the project. A project is an impermanent effort which is designed to give yield to a new and distinctive product or service. This process has a well defined beginning and end. The fundamental deliverables, which constraints a project are well defined by the SMART tool. This essay seeks to answer three questions that relate to project management on various dimensions which include limitations of available risk identification methods and optimization, examples of risks, use of Critical Chain methodology in event organization and evaluation of waterfall and agile methodologies QUESTION ONE Evaluate advantages and limitations of the available risk identification methods and conclude on an optimal, well-balanced combination of them to be used in a project of your choice. (20) Provide 3 examples of potential risks that could be obtained through each of the techniques in such an ‘optimised’, project-tailored list Key characteristics exist in any project. For instance in this case, consideration of installation of selling and purchasing software in an organization is ideal in explaining the attributes relative to project management. In essence, installation of a software that tracks, ordering, invoicing, payment and dispatch of goods in an organization is a complex process which should be guided by the principles relative to project management in a bid to attain the set goals. In any project, the element of management is inevitable and it is guided by the various tools and principles. Some of them include SMART and PESTEL (COVELLO & MERKHOFER, 1993). Consideration of SMART helps in understanding the key features of a project. Consider the following illustration. S- Specific M-Measurable A-Attainable R-Relevant T- Time-Bound The process of project management as mentioned earlier is definitive in nature in the sense that it has a beginning point and an end. This implies that the attributes of specificity, measurability, relevancy and attainability crowns the aspect of timing of a project. It is imperative to note that, the numerous uncertainties stand a chance to occur during this process and this explains the necessity of the risk identification (KENDRICK, 2009). When the risks are identified earlier, the requisite intervention measures are carried out in time and this ensures that the process of the project flows smoothly. Essentially, when risks occur in a project process, there is a possibility of the process either stopping, costing more funds, taking more time than scheduled and malfunctioning among others (PITBLADO, 1995). Such risks should be identified through rigorous strategic methods and mitigated appropriately. This brings us to the various risk identification methods. Risk Identification Methods The overall aspect of Enterprise risk management (ERM), which takes a broad approach on the process of risk identification which could cause a firm or corporation to fail in meeting its goals is essential in offering an insight on how an organization can seek to attain the internal/external balance through known and unknown risks attributed to the overall functionality of the organization. There is need for the organizations to follow defined approaches to identify risks. The distinctive methods offer a highly precise mitigation plan upon the identification of such risk (CHAPMAN, 2013). This is because the negative and other attributed effects of the risks are easily detected. These methods follow a similar route in identifying a risk in an organization. Consider the process as illustrated in the figure below. Source: www. Marsh.com It is imperative to note that the most critical stages of risk management process include Risk identification Risk evaluation Risk riposte/response The methods of risk identification need to embrace the listed phases of project management in a bid to attain the desired results. In the case of under consideration, the process of software installation in organization is one of the most sensitive process which need both the initial and on-going risk identification to ascertain that in each phase of the project , the risks are identified and mitigated appropriately (HESTER & HARRISON, 1998). Brain storming This technique requires that the goals of the projects are set clearly and well understood by the team that is working on the project. The session for brainstorming is immensely attributed to the collective sense of creativity of the participants. This session help in generating a list of risks and then the participants work in collaboration in a bid to articulate the risks which may be known by some of member of the team. During this session, it is imaginable that both risks which are known unknowns may arise and even those were previously unknown unknowns may become known. This session is characterized by a high level of evaluation and situational interpretation. This process can be guided by the ERM staff of an organization that has undergone leadership training. The facilitators should help the participants understand the nature f the ERM framework requisite and the manner in which it fits in the brainstorming session. Some of the potential risks that can be identified by this method include fraud, deficiency of the internal system and debility of foundations that support the whole organization (KLOPPENBORG, 1990). Advantages of Brainstorming This method of risk identification offers an opportunity for the participants to share their creative skills in risk identification and this provides a wide platform of risk identification success. In addition, the brainstorming represents a powerful tool applied at the executive level particularly the audit team, which finds it informative about the internal system of the organization. This helps in easing the process of auditing the organization (CHOUDHURY, 1988). Disadvantages The foremost limitation of brainstorming involves the derailing in the process of decision making due to the diverse perspectives of a risk (CHOUDHURY, 1988). The members of the brainstorming team are attributed to different backgrounds and skills. This will need harmonization of the ideas before moving to the next step. Flowchart Method This technique is attributed to the use of graphs to sequentially indicate the operations of a process to identify risks. Numerous methods are applied through this approach. They include product analysis, decision analysis and critical path analysis. Some of the potential risks that can be identified by flowchart approach include low quality of the product to be installed, low level of management competence and weak framework of decision making (HELDMAN, 2011). Advantages These methods can help in indicating the correlation in terms of interdependency among various attributes in the organization. In addition, these techniques are efficient in establishing and pinpointing the bottlenecks of the project progress and consequently aid in the determination of a critical path (HELDMAN, 2011). Disadvantages These methods do not have the potential to illustrate the severity of a risk. In addition, they have constraint ability to applicability. This is related to liability exposures. On a similar note, these methods are more process-oriented (HELDMAN, 2011). Other methods include SWOT analysis, which is efficient in identifying risks in an organization relative to investment. It is not a good approach in tracking the progress of a new project in an organization like the installation of software for sales and purchases. Optimization relative to appropriate method combination Since the barnstorming method focuses on collecting requisite information and then sharing the ideas, skills and perspectives from diverse backgrounds, it forms a solid foundation of a successful risk identification process if combined with any of the flowchart methods such as product and critical path analysis. Whereas the brainstorming approach offers a multivariate but well thought perspective on a risk identification process, the flowchart approach such as the critical path analysis offers the flow or direction of the mitigation process (MEREDITH & MANTEL, 2012). This is a perfect blend and will give optimum results relative to the success of the project management process. QUESTION TWO What would you use Critical Chain methodology when organising an event? Evaluate and suggest appropriate decisions for different types of events (your choice of examples) Critical chain methodology refers to a probabilistic approach, in which a programmed network scrutiny is employed with a sole aim of amending an already determined project on display in order to give a financial explanation regarding more limited than expected project financial resources, as applied in project management. Thus, the applicability of the critical chain methodology in project management focuses more on the subject of quantitative risk analysis in which both the Bayesian and Monte Carlo simulation analyses are of key concern. The tools that are normally employed in this type of project management are among others; a considerable quantity of uncertainty in each task performed, schedule management, task durations, safety margins as well as the successor task with reference to the project schedule (LAM, 2012). Concerning the tool of uncertainty, it is assumed that in any project there is an existence of fear of the future that the project may not be concluded due to a myriad of reasons. The unexpected lack of necessary resources that arise from anomalies such as overestimation and underestimation in the budgetary allocations, serves as the key contributors of the uncertainty principle, of the critical chain method of project management (LAM, 2012). In addition, the idea of task durations based on this criterion, becomes handy due to the urgent need by the relevant planning stakeholders to estimate the quantitative figure that a certain task requires, for it to reach completion. As a result, an informative calculation takes course to ensure that a projects’ decided completion schedule is professionally determined and strictly adhered. However, there are exceptions that are always provided for in project undertakings. This allows for safety durations that are merely included in schedule management, just in the event of anomalies. As such, projects are required to be concluded within these safety periods by extension. To sum up, the successor tasks are included in this methodology since the project completion dates are not correctly determined. Therefore, in case the projects are completed earlier than expected, and there is availability of resources for the successor project, then it may start almost immediately, but the otherwise is not necessarily true (GOLDRATT, 1997). On the other hand, the relation of the above mentioned aspects to the choosing and undertaking of various events with respect to the appropriateness of decisions involved in such events, are of crucial essence in this perspective. Concerning event and decision-making, we need to look at practical situations to facilitate a more in-depth comprehension of the situation. Considering the example of an event in which an airport terminal is to be constructed. It is imperative to note that the project require skills of multidimensional nature. Consequently, a direct implication of this is that the project will encompass multitasking and complex schedule networks, which according to the critical chain methodology cannot be handled within its domain. Thus, the most likely decision that will be handy is to employ a method that involves multitasking and drop the application of chain methods. Additionally, let us look at a second example say the construction of a residential apartment. In this case, the skills required all of them revolves around the architectural and construction field (NICHOLAS & STEYN, 2008). Thus, there exists uniformity in planning and execution of tasks as opposed to multitasking in the former example. Therefore, the application of the critical chain method as a decision is ideally relevant and productive in this event. In essence, the critical chain method is a key constituent in project management and its applicability of this concept is only constructive in projects, in which there is no multitasking. Additionally, in selection of the appropriate decision, a closer look at the quantitative risk analysis based on this concept is inevitably crucial QUESTION THREE: Evaluate and critical the principles of both waterfall and agile methodology and then be able to apply these theoretical approaches to a practical situation. The usual question is what would you choose as a PM methodology for such and such (type of) projects and why? The principle of methodology entails the System Development that analyzes, creates implements as well as maintains information systems in order to improve their applications. The Agile and Waterfall models focus on specific techniques that are essential relative to the people’s perspectives as well their practices. Agile methodology for instance, imply that the models used in the system advancement arena whereas Waterfall methodologies are sequential software design and development process models, which are assigned to enhance greater projects that are essential in time project delivery (DAVIS, 2013). The principle of Waterfall methodologies in most cases advance downwards whereby it is operations are in series particularly in the production and manufacturing processes. This model is effectual in its application but it has been criticized more especially in the software advancement industry. In terms of design adjustment and requirement, this model lack elasticity that is vital for developers as well as programmers (DAVIS, 2013). This is because it helps in incorporating design adjustments of the model in their submission. Some of the principles of Waterfall methodology was applied successfully towards the development of the software include the following; Confirmation of the human work If the problem is clearly defined, the likelihood of solving the problem is high Large amount of code are easily tracked if they are structure-oriented A good project life-cycle plan, helps in advancing the development procedure Agile methodologies are organized in such way that they deliver products in a quicker, better as well as cheaper ways. The process of improving the development of this model has paved way for new software developments. Similarly, Agile Software Development has changed diverse operations of organizations by providing solutions more efficiently as well as successfully. In essence, this model offers a wide range of new approaches that are indispensable towards customer satisfaction. The foundational principle of agile method is based on the platform of software engineering, information systems as well as production management (DAVIS, 2013). The principles behind the agile methodology include the following; Quality work hence enhancing sustainability in terms of development It embraces variation in their models Assume minimalism The highest precedence of this methodology is to satisfy the needs of the customers through earlier and regular delivery of precious software The most efficient and successful in conveying information within a development team or an organization The Agile and Waterfall methodologies are applicable when evaluating the results of the ultimate project through urbane documentation of work thus allowing the breakdown of coding into stages. They are related with project management in terms of familiarizing with a number of tools that are crucial in acquiring skills and knowledge in managing their methodologies (LARMAN, 2004). The Agile methodology allows the test and advancement of the programs more easily through understanding of the concepts of project management. This methodology has been demonstrated to be the most effectual model in delivering skills in a dedicated manner. Therefore, the approach of this model enables people to make informed decisions due to quality of information that is based on exactness (HIBBS, JEWETT & SULLIVAN, 2009). List of references CHAPMAN, R. J. (2013). Simple tools and techniques for enterprise risk management. Hoboken, N.J., Wiley. http://rbdigital.oneclickdigital.com. CHOUDHURY, S. (1988). Project management. New Delhi, Tata McGraw-Hill. COVELLO, V. T., & MERKHOFER, M. W. (1993). Risk assessment methods: approaches for assessing health and environmental risks. http://dx.doi.org/10.1007/978-1-4899-1216-9. DAVIS, B. (2013). Agile practices for waterfall projects: shifting processes for competitive advantage. Plantation, FL, J. Ross Pub. GOLDRATT, E. M. (1997). Critical Chain. Great Barrington, North River Press. HELDMAN, K. (2011). Project management jumpstart. Hoboken, NJ, Wiley. HESTER, R. E., & HARRISON, R. M. (1998). Risk assessment and risk management. Cambridge, Royal Society of Chemistry. HIBBS, C., JEWETT, S., & SULLIVAN, M. (2009). The art of lean software development. Sebastopol, Calif, OReilly Media, Inc. KENDRICK, T. (2009). Identifying and managing project risk essential tools for failure-proofing your project. New York, AMACON. http://public.eblib.com/choice/publicfullrecord.aspx?p=420626. KLOPPENBORG, T. J. (1990). Contemporary Project Management. Place, South-Western College Pub. LAM, G. E. A. (2012). Framework for Adapting Critical Chain Methodology to Construction Project Management. Thesis (M.A.)--National Cheng Kung University Department of Civil Engineering. LARMAN, C. (2004). Agile and iterative development: a managers guide. Boston ; London, Addison-Wesley. MEREDITH, J. R., & MANTEL, S. J. (2012). Project management: a managerial approach. Hoboken, NJ, Wiley. NICHOLAS, J. M., & STEYN, H. (2008). Project management for business, engineering, and technology: principles and practice. Amsterdam, Elsevier Butterworth Heinemann. PITBLADO, R. (1995). Risk assessment in the process industries. Institution of Chemical Engineers. Read More