How Do Project Risks Influence Multi-Project Risks - Coursework Example

Task 2.

How do project risks influence multi-project/program risks? Considering the Programme Management Exercise discuss the impact of the project risks on the programme risks and how all types of risk could have been managed more effectively when compared to a typical Risk Management process.

The management initiatives that involve shifting the paradigm in project management from a single project at a time to multiple projects at the same time come along with some certain risks. The various projects are used as a vehicle which would successfully deliver the needed improvements in unpredictable economic conditions in a particular region (Raftery, 2005). The managers take on this initiative to expand the capacity of their firms in marketing, sourcing as well as the creation of new infrastructure. The emergence of challenges and risks that face multi projects bring about considerations by the managers to adopt new measures to curb the risks. This necessitates the firm to take different dimensions in the coordination of each particular project and do an Interco ordination with other businesses. The conditions as well as the moderators in the management o0f various projects (Chapman, 2003).

Uncertainties surround the selection of the project due to the many risks that appear at later stages and frustrate projects. Business managers are afraid to select projects and thus will first need to evaluate the choices that they have at hand critically. Careful selection of the projects rules the process. There is a problem in understanding the priorities of the project and syncing them with the aims of the project. Also, the ability of the project appears to be of a concern when it comes to the implementation plan. In implementing, only the priorities which seem to match the capabilities of the project are executed. In matching the project assignments, there is a consideration that also comes along with the task.

Resource allocation appears to boost or hinder the multi projects. In most situations, the resources that are available fall short of the resources needed for the actual period of implementation. The economic fluctuations are partly responsible for the shortcomings that are mostly financial. According to most researchers, the resources that a firm has are always limited and scarce thus giving a limited chance to any changes of the project by the managers. This corners the project managers between a hard place and rock. They find it tough to reverse the project as it has already taken up financial resources that could have been put somewhere else. The organizational input comes up as the challenge that presents itself in this case.

Another challenge is the management process whereby the uncertainty lying here is the lead group of projects and their future. Communication seems to be the risk that grasps the whole process, threatening to bring it down to nothing. The complexity that comes in 5the management of multiple projects puts managers in a position that they would not like to find themselves in. The complexity associated with projects has always been there. It is not a new challenge that has come with projects that are of multiple types (Elkington, 2006, pp. 51). However, although it is a challenge, it is key to improved performance and promoting the understanding of the management of such multi projects.

The multi-project management is faced with more risks than a single project. This comes from the complexity of the systems and the processes involved together with the inter-combination failures that attach themselves to the progress efforts of such projects during the lifecycle process. The complexity arising from the interdependence is affected by other impacts that depend on the individuals and or their systems. Little evidence has however been presented on the dependence whereby little research has shown the proof of interdependence complicating the whole string of projects.

As a result of the risks, there has been a change in the organizational input in the management of multiple projects. Managers have come to realize that one cannot separate the project selection with the resource allocation. This is because the two processes are intertwined in a manner that one cannot be done without referencing the other. The process will be somehow confused if one of the processes was carried out in total disregard of the other. Also, it has come to the attention that implementing too many projects without sufficient financial sources can lead to a backlash of the decision that has resulted in the establishment of such plans.

The allocation of resources presents a grave risk to the managers calling for sourcing of sponsors and funders as starting a project without a good source of funding is a waste of the available scarce resources which could have been put to an alternative use to produce something of economic value to the owner. Interdependency brings about the highest stake. They present serious challenges in the whole exercise (Hillson, 2003, pp. 94).

Projects outputs are of the highest quality due to the carefulness and effective decision making taken by the implementers of the project. The risks offer a motivation because the standards that are set are meant to be affected to see the highest value pumped out of the system. The high standards that are fixed in a bid to overcome the challenges associated sometimes go above the expected results which were the original targets of the management. When the attributes are all put in place, they become the conditions and moderators of the risks in the administration of the multi projects. The interdependence accompanied by the uncertainty is the judges that force themselves into the project management process of the many projects. It should be noted that dependence only occurs at one stage; that is the process step during the execution whereby each single project is taken and managed single-handedly yet simultaneously in a bid to bringing the schedules to match the expectations as per the available resources.

The core competence is enhanced as well as the establishment of the project management, assisting in identifying the risks that may come in the future. A comparison guideline is also developed for the sake of making comparisons in formulation and execution of multiple projects. The risks concerned have also raised awareness of the roles of MPE development (Jaafari, 2007).

Impacts of project risks on programme risks

The risks that are facing the project manager as well as his team are categorized into several categories. Due to the fact that the program is made up by a number of related projects put together, any effect on project management in one way or the other affects the program managements’ risks. On the budgeting segment of project risk, there might be loop holes for mismanagement of funds set for a certain project. As a result, the budget for a project fails to sustain it to its completion/ therefore, as a result there is an increase in the budget for the project.

Also, something else that leads to the increase in the budget of a project is the lack of utilization to the resources as well as the raw materials required for the success of a certain project. Therefore, additional budget is required for the success of a project thus imposing as well as stimulating risk on the management of the program as well. In conclusion, the mismanagement as well as the increase in the budget of a project also impacts a risk of increased budget for a program as well.

The rick of increased duration for a project also has an impact of the duration required for the delivery of a certain program. Due to the delay in the presentation of the projects, a risk is identified on the duration to be taken too for the completion of the projects in the program management. Also, there might be a risk of the increase in the planning m=network’s activities.

The increase is directly transferred to the program management department thus being viewed as a risk to the performance of the program manager. As a result of the delayed duration for the completion of a project as well as a program, chances for the experience in the delay of the submission of the final design are highly increased. As a result, the blame will be upon the program management for the unpromising achievement of the plans laid down on the performance of the projects as well as the presentation of the projects to the respective organizations or department (Chapman, 2001, pp. 149).

The programme management risks have been impacted greatly by the occurrence of the risks in the project management office. The increase in the number of reviews of design is a risk that is common in the project management office. It is transformed to the programme management office where a great impact on the risk is recorded. The reviews develop the loss of trust to the programme thus the number of projects allocated to a certain programme being reduced to a lesser number. Also, the design cycle as a result gets increased too as a result of the risks in the project managers’ desk as well as the increase in the cycle of the work performance of the programme manager.

There is a probability of the project management facing a risk of new requirement by the project supervisors as well as the owners. This calls for a rampant change in the previous requirements thus formulation of an updated budget as well as a list for the required resources and raw material for the project. The approval and implementation of this is done by the programme manager. Therefore the performance of the programme manager is greatly exposed to the risks of incurring additional expenses in the process of reaching the required standards for the projects. The team members in the programme management may get involved into conflict due to work related disagreement thus resulting to poor designing of the projects, poor communication in the management office. This fuels the availability of errors in the strategies laid since the rate of consultation from one another has been dragged to zero percent. Besides, the contractors in the management teams and up not delivering the components they were to deliver the components required according to the duration given or agreed upon (Williams, 2005).

Other impacts on the programme management risks are as a result of the change or the alteration of the priorities given to the programme that are existing. The alteration is majorly conducted at the project management level. Also, the programme manager faces risks of providing many resources at a go in the occasions where various projects require common resources as well as time for their completion. Besides, only little authority is given to the project management manager in the structure of the progress thus the personal power towards the impaction of influence on decision making being low as well as lowering of the influence in resource demanding.

How to manage all types of risks on comparison to the typical Risk Management process.

The risks in the project management are the primary causes of risks in the management of the programme (Williams, 2005). Therefore in conclusion, the curbing of the project management risks is the major initiative in the reduction of the negativities in the results of the projects as well as programme. Therefore, several steps are to be taken in the management of all types of risks comparing to the usage of typical Risk Management process (Wipplinger, 2007, pp. 398).

The identification of the context of the risk Is the frontline initiative to take in risk manage (Froot, 2013, pp. 1636). Several activities are involved in the identification of the context which includes the identifying the domain of interest, then recognizing the risks that can probably result. The management scope of the risk is mapped together with the objectives and the options from the stakeholder as well as mapping the constraints to be evaluated (Dowd, 2008). Agendas on the risk management are laid down as analysis and development on the risk to manage are made. Use of technology helps in the selection of the appropriate solution to go by in the risk management.

Reference list

Chapman, R.J., 2001. The controlling influences on effective risk identification and assessment for construction design management. International Journal of Project Management, 19(3), pp.147-160.

Chapman, C. and Ward, S., 2003. Project risk management: processes, techniques, and insights. Wiley.

Dowd, K., 2008. Beyond value at risk: the new science of risk management.

Elkington, P. and Smallman, C., 2006. Managing project risks: a case study from the utilities sector. International Journal of Project Management, 20(1), pp.49-57.

Froot, K.A., Scharfstein, D.S. and Stein, J.C., 1993. Risk management: Coordinating corporate investment and financing policies. The Journal of Finance, 48(5), pp.1629-1658.

Hillson, D., 2003. Using a risk breakdown structure in project management. Journal of Facilities management, 2(1), pp.85-97.

Jaafari, A., 2007. Management of risks, uncertainties, and opportunities on projects: time for a fundamental shift. International journal of project management, 19(2), pp.89-101.

Raftery, J., 2005. Risk analysis in project management. Routledge.

Williams, C.A. and Heins, R.M., 2005. Risk management and insurance. McGraw-Hill Companies.

Wipplinger, E., 2007. Philippe Jorion: Value at Risk–The New Benchmark for Managing Financial Risk. Financial Markets and Portfolio Management, 21(3), pp.397-398.