PM FPX 4060 Assessment 6 High-Risk / Complex Project Management PM-FPX4060 Risk Management in Project Management Adapting an approach to quantitative risk analysis to suit a high-risk project
One of the key responsibilities of a Project Manager (PM) is to recognize and evaluate potential risks that may affect the project’s outcomes. Quantitative risk analysis (QRA) plays an essential role in this, as it allows for the estimation of how risks could impact the scope, schedule, and budget of a project. This analysis helps to provide a clearer picture of the project’s performance and the likelihood of its success or failure. The process of QRA involves evaluating the team’s estimates for cost and time against historical records and lessons learned from previous projects. Additionally, conducting interviews with project stakeholders and subject matter experts (SMEs) helps to identify potential risks through their expertise. A project manager must be proficient in recognizing known risks and uncovering unknown risks to ensure project success (Thamhain, 2013).
Furthermore, it is important to carry out a SWOT analysis to assess potential risks, as well as create and maintain a Risk Matrix or Log. This document should be regularly updated and include details such as the risks, their complexity, responses, categories, causes, mitigation strategies, and the roles and responsibilities of team members. Adapting to these potential risks, the project manager can identify factors that could delay the project, such as those seen in CapraTek’s Alfred! Personal Security Device project. In this case, Brandon Matthews, a Software Architect, raised concerns over the lack of resources, particularly personnel, which could lead to scheduling delays and scope creep, potentially resulting in project failure. Additional risks included the compatibility of new software with existing systems, the effectiveness of QA and testing, and product reliability. Competitive pressures also presented risks, as the company’s partners might develop similar products, potentially affecting product alliances (CapraTek, n.d.).
Risk audit report strategy
Assessing and identifying all project risks, regardless of their severity, is a key element of a risk audit or review, which is conducted by project managers to ensure that the project remains on schedule and within budget. Risk audits are carried out periodically throughout the project to maintain its trajectory toward success. Both risk auditors and project managers objectively evaluate potential risks through team interviews, the development of a scoring system, and identifying critical success factors that reflect the project’s health. They also collect and analyze evidence, offering recommendations for improvements. It is essential to conduct follow-up audits to verify that recommendations are being implemented and to determine if further analysis or adjustments are necessary (Wooten, 2020).
In CapraTek’s case, interviews with SMEs highlighted several issues that could be addressed in future risk assessments. For example, the lack of market analysis conducted in innovative ways and whether the market for Alfred! Personal Security Device was already saturated. While communication between teams had improved, some project requirements remained unclear, resulting in launch delays (CapraTek, n.d.).
Best practices in preparing for a high-risk task
The best approach for managing high-risk tasks begins with thorough analysis from the project’s outset. PMs must consider all potential weaknesses, strengths, and opportunities for improvement as the project progresses. Known and unknown risks, including technology, commercial, management, and external risks, should be identified and documented in the project plan. These risks are best managed through team interviews conducted early in the project and throughout its lifecycle. Additionally, risks should be documented in a risk register to facilitate ongoing monitoring and assessment.
In the CapraTek case, interviews with SMEs revealed several high risks, including inadequate resources, unclear communication, insufficient market analysis, and concerns about post-delivery customer support. While some of these issues were addressed, others persisted, suggesting that a risk audit, possibly conducted by an external auditor, could provide a more objective assessment and help resolve outstanding challenges (CapraTek, n.d.).
Effective risk management is a fundamental aspect of project management and is critical to the success of any project. Failure to adequately identify and address both high and low risks from the beginning can lead to unmet objectives or, in some cases, project failure.
References
CapraTek Activity (n.d.). Quantitative Risk Analysis. Retrieved from:
https://media.capella.edu/CourseMedia/pm-fpx4060element236967/wrapper.asp#
Thamhain, H. J. (2013). Managing risks in com