Risk Management on a Satellite Development Project - Case Study Example

Satellite Development Project

The success of a risk plan in the execution of specific projects is contingent on several factors. The dynamic nature of risk demands constant comparisons with expected standards, and enables the creation of specific guidelines (Power, 2012). Teams ignoring the planning phase of a project may encounter some serious consequences that could infringe on the final outcomes. However, the resources used for this process must match the expected results, and thus limit the exploitation of resources. This paper reviews the risk management process of the satellite development project and offers solutions to some of the contingent situations it may incur.

Issues without Plan

The absence of a proper risk plan for this project is likely to have led to the occurrence of unpleasant outcomes for this project. According to Kloppenborg (2012) the absence of a clear plan is likely to result in inaccurate goals, and consequently results in a chaotic work environment. The dynamics of a team and the desired outcomes are thus affected by the absence of a clear plan. As such, the absence of a risk plan could cause missed goals and exert heavily on the costs that were allocated for the project (Kloppenborg & Nkomo, 2012). With a risk plan, the team could identify the negative events likely to occur and compare against the existing standards of performance (Kloppenborg T. , 2012). This approach will enable eventual determination of acceptable risk levels. The mitigation of problems before they occur helps the project managers run an efficient process devoid of time and cost wastages.

The risk plan also enables the team to develop suitable strategies for risk management. The strategies are supposed to help the managers overcome any and all challenges that may be faced in the course of the project. The mindset of risk planning is futuristic, enabling the anticipation of possible what-if scenarios and suitable responses (Kloppenborg & Nkomo, 2012). The lack of clarity of team goals, poor communication, and poor clarity regarding the roles of members could hinder project success. These conditions are likely to occur in the absence of a comprehensive risk plan. As such, the team would face misdirection and possible chaos, resulting in underachievement of goals (Kloppenborg & Nkomo, 2012)

The absence of a risk plan implies equal absence of accountability plans. It is reckless when the managers fail to review the potential risks that they could face along the way. As such, in the event of a risk, the team would not know the appropriate responses to the event. Risk plans enable allocation of responsibilities, and eliminate the chaos that could result from undefined tasks (Kloppenborg & Nkomo, 2012). As such, without the plan, communication would be lacking, multiple actions would be taken, and it would be improbable that the project could recover from the effects of a possible risk.

Justification of Risk Plan Resources

A risk plan is a tool that is essential for the management of time, scope, and cost constraints (Frenkel & Hommel, 2001). As such, risk plans for very important and expensive projects usually require heavy dedication of all the resources. Nevertheless, this dedication is expected to yield similarly large results and prevent the occurrence of losses of greater magnitude than the costs of the plan’s development (Kloppenborg T. , 2012). While risk management may be regarded as the prevention of risks, there are alternative approaches to its understanding. The concept revolves around the provision of information to the right people, ensuring their efficient decision-making when it is required (Frenkel & Hommel, 2001). Information is critical to the management of any project and as such relaying it to the relevant parties, is part of the risk planning.

As the project manager for this plan, the development and maintenance of the critical path would require the use of specific strategies. The first step would be recognition of the needs of the project, using a needs analysis, which would enable delimitation of the rest of the plan (Frenkel & Hommel, 2001). The needs could vary, beginning with those relating to the members to potential one that could arise in the course of project completion. The needs also vary with the complexity as well as stage of the project. These needs represent the potential points of failure, and thus risks, which could emerge. As such, approaches such as the SWOT analysis of Delphi technique may be useful for this phase (Power, 2012). Applying renowned business tactics in assessing opportunities and risks will help give a clear image of what can be expected from a project.

Following the identification of exposures, it is critical that they are analyzed in the next step. Here, the risks will be analyzed for their severity and the probability of their occurrence (Power, 2012). This evaluation enables the comparison of the risks, and probable prioritization in a comparative form. Once the risks are prioritized, it is possible to evaluate to possible options for intervention. The project may opt to avoid the entire risk and deviate from the critical path, or develop ways in which to mitigate the effects of the risk once it occurs. The latter option involves minimal changes to the project resources, but it also presents a higher chance of project delays upon its occurrence (Kloppenborg T. , 2012). After this process, the development of the actual plan with filled in templates regarding action planning and the roles of each member would be developed.

Assessment of Suitable Level

The assessment of the most appropriate level of management that suits a project is dependent on several contingencies. The dynamic nature of risks implies that the project must contain flexible attempts at countering any risks imposed by changes in the course of its development (Power, 2012). As such, in order to develop the most suitable level of management, it must begin with the assessment of probabilities. This determination begins following the needs assessment, where each risk identified is prioritized comparatively. From the prioritization, it is possible for the project to determine the resources that should be dedicated for each risk.

The implementation of the actual risk plan will reveal the suitability of the approaches to risk management. It is essential for project management approaches to be assessed in terms of the way that they undertake or help in the completion of certain tasks. This is only achievable through assessment of the approaches before implementation. Furthermore, in the course of implementation, it may occur that some of the highly prioritized risks are unlikely to occur and compel the re-arrangement of tasks. On the other hand, the level of resources dedicated to the task of risk planning and management may be insufficient to meet the demands of the project (Kloppenborg T. , 2012).

Notably, the milestones and critical path of the entire project are integral to this assessment. The risk management plan must be integrated into this overall project plan (Frenkel & Hommel, 2001). As such, the outcomes expected from the project activities can be associated directly with the possibilities of risk. This comparison enables determining whether the resources implemented at each turn match the outcomes of the milestones. There is, therefore, a continued assessment of opportunity cost following resource exploitation in the risk management process (Frenkel & Hommel, 2001). Regular review, however, will be necessary to maintain the desired levels in the course of the entire project.

Virtual Team Scenario

The Satellite Development team could complete the project from different geographical locations. The situation could yield a set of complexities that are uncharacteristic of the normal work environment. For instance, communication is more limited in this situation, as the effectiveness of direct exchanges is eliminated. Teams working in the normal environment can meet physically, and intimately discuss the issues surrounding the project (Kloppenborg & Nkomo, 2012). The close communication also brings them together and increases their bonds as friends, which makes them more efficient as a team (Kloppenborg & Nkomo, 2012).

The virtual team could also face problems in their risk planning. The problems are considered part and parcel or integral to the project management process. For instance, the day-ling clinic would have been impossible under these conditions. The physical distance would mean some would be unavailable for the phase, while others would have had to incur additional expenses to be present. The understanding of risks would also be different, implying different perspectives to the management process and therefore extending the time required for completion. As such, the risk management element would be compromised, causing a threat to the effectiveness of the overall plan.

However, the problems could be solved with alternative methods of handling the project. For instance, communication could be improved through the use of teleconferencing or videoconferencing facilities (Kloppenborg & Nkomo, 2012). Here, review meetings could be held occasionally, enabling the evaluation of risks and any contingencies the project may encounter (Power, 2012). Further, the meetings are useful in measuring the effects of the risk management efforts and developing alternative interventions. This approach, taking place through the video conferenced meetings, will enable team cohesiveness and limit the negative outcomes of physical distance (Power, 2012).

Another option for the team would be the creation of a virtual risk management review tool (Kloppenborg T. , 2012). This tool would include all the risks as they have been recognized and classified. Further, it should feature all the qualifications of team members and the roles they play in the risk management process (Frenkel & Hommel, 2001). The presence of this tool virtually will allow for consultation on the expected results and the display of the team’s performance with regard to the risks. It will also assess the ability of various individuals to manage and mitigate any risk factors. Through the program, the management will have the ability to hire only the necessary workforce.

Conclusions

For the maintenance of the current goals in risk management, it is important for the team to recognize that risk is not static. Without a risk plan, the team could compromise their communication, as well as the achievement of goals. It is also highly likely that they will exceed their costs in risk management. Despite the risk plan requiring heavy resources, the level of costs and scope should match the outcomes. The opportunity cost, in form of the loss they avoid in the future from the costs of the plan, essentially justifies any resource use. In order to understand the level of risk management, the comparison of probabilities and severity should elaborate the order of priorities. Even in a virtual environment, where communication would be hindered, risk review tools and meetings will ensure the maintenance of efficiency.