Acme Corporation
Question #1: Risk Management Plan
The document given to the sponsor was not a risk management plan. The information contained in this document was a rough draft about the potential risk events that could affect the final product’s final product. Besides, the project manager recognized that the organization did not provide guidance on the process of developing a risk management plan. The plan contains potential business threats, possible solutions, ways of communicating the strategies to all stakeholders.
Question #2: Effective Risk Management
The project did not perform effective risk management. Effective risk management involves identifying business threats and developing mitigation to ensure the attainment of the intended outcomes. However, the project manager had only prepared a list of the potential risks that could affect product development. From the case study, the project manager recognizes that his team did not assign probabilities and forecasted damages and outcome of the risks. The team requires to complete the remaining steps of risk management to ensure the project achieves the desired goals.
Question #3: Benefits of Risk Identification
The work of risk identification that the team has already carried out is beneficial to the company. Risk identification involves determining the threats that could hinder the project from accomplishing its objectives. The project manager had also documented the project risks and communicated them to the sponsor. Although identifying risks is the first step in risk management, it enables a business to identify events that will affect the project’s performance in the future. Early identification of risks empowers the project team to develop mitigation strategies that would prevent these events from occurring. Besides, the project team prioritizes the risks depending on their impact on the organization. Risk identification can also allow project management to identify opportunities for improving performance.
Question #4: Assigning Probabilities of Occurrence and Expected Outcomes to 100 Risk Events
The project team can successfully determine the impact and outcomes of risk events. The first step would be to categorize the risks to reduce the time that would be required in analyzing the implications and outcomes. The effects of threats can be either positive or negative to the achievement of project objectives. Apart from impacts, the risks are assigned numerical values corresponding to their likeliness of occurring. The risks that have higher probabilities are given priority to prevent losses. Therefore, risk analysis guides the management in resource allocation.
Question #5: Categorization of Risk Events
The project manager should have categorized the 100 risk events. For the project manager to classify the risks, he should start from higher levels and move forward to the finer level threats. For example, the level 1 events can comprise of management risk, external risk, technical risk, and scheduling risk. Then for each category of risk in the level 1, the project manager narrows down to specific threats and opportunities. I selected the 2-level risk breakdown structure because it enables individuals to cover all the relevant points. Through this structure, the team analyzes all the risk events associated with the project. After the risks are categorized into different levels, they are given scores according to their impact and probability of occurrence. The process also allows the project team to prioritize the risks depending on the severity of their outcomes. Therefore, categorizing project risks into a 2-level RBS enables the team to manage them effectively to attain the desired results.