I’m studying for my Management class and need an explanation.
Please reply to both POST1: (Question to me from the professor) and POST2: in at least 200 words each.
Every day we take risks, and while some we are very noticeable, others are so minor that they hardly make us pause. The same is true in project management; however, risks taken can impact a project in a number of ways, and not always detrimentally. What are the key benefits of integrating risk management into a project? Explain how an effective project risk management process can relate to project success.
As a project manager, one of the most important things
during planning is thinking about what could go wrong. Risks may sound
negative but are not because they are preventable. Many benefits
accompany successful project risk management (PRM). First, risks
originate from the disconnection between deliverables of a tactical
project and strategic vision, which are attributed to poor definition of
projects and ignorance to risk management. PRM, therefore, bridges this
gap, ensuring project delivery corresponds to organizational vision and
needs (Project Management Institute, 2017). Risk identification at the
strategic level enables proactive management hence benefiting the
overall project. Also, it helps in giving useful information in an
uncertain environment to aid in decision-making. PRM minimizes risks and
ensures that opportunities are maximally utilized; hence, an increased
likelihood of accomplish both tactical and strategic objectives (Project
Management Institute, 2017). The final and most important is that a
culture that is risk mature is developed; one that recognizes the
existence of risks at all levels but that can be managed.
So then how does PRM relate to success? First, it is a process that establishes both internal and external risks, occurrence probability, potential impact, and actions (Larson & Gray, 2017). This is what planning for success looks like. Second, PRM enables timely risk communication with stakeholders. Identifying risks and dealing with them in advance ensures effective response and intervention. Third, PRM enables profit maximization and minimized expenses on activities that do not give a return on investment (ROI), hence prioritization of tasks that do (Larson & Gray, 2017). Fifth, PRM is proactive, so when a risk occurs, the steps taken could be used as a contingency plan instead of constantly extinguishing fires. Lastly, PRM gives an entire project evaluation because one is needed to assess how activities in an organization minimize exposure to issues and are exploiting opportunities for company strengths capitalization.
Larson, E. W. & Gray, C. F. (2017). Project management: The managerial process (7th ed.). New York, NY: McGraw-Hill.
Project Management Institute (PMI). (2017). A Guide to the Project Management Body of Knowledge (PMBOK Guide) (6th ed.). Newton Square, PA: PMI Publications. Project Management Institute. (2017). A Guide to the Project Management Body of Knowledge (PMBOK Guide) (6th ed.). Newton Square, PA: PMI Publications.
POST1: Question to me from the professor
Welcome to the class. I agree that project risk management (PRM) bridges the gap to ensure project delivery meets organizational goals. Besides PRM what other project management tactics and knowledge areas assists with achieving the overall organizational strategy? Why is this important to note and understand?
Integrating Risk Management into a Project
Risk is a natural part of every project. Bissonette (2016) states that there are numerous sources of project risk. The sources include external risks such as inflation, market acceptance, exchange rates, and government regulations. Project managers must manage these project risks. To do so, the project managers must integrate risk management into all projects. Successful integration of risk management will aid in the successful completion of the projects (Bissonette, 2016).
There are many benefits to integrating risk management into projects. According to Majeed (2018), the benefits of integrating risk management include:
- Aids in avoiding big disasters
- Enhances project revenues by saving project expenses
- Gives a competitive advantage over competitors
- Helps to ensure successful completion of the project (Majeed, 2018).
Bissonette, M. (2016). Project risk management: A practical implementation approach. Newtown Square, Pennsylvania: Project Management Institute
Majeed, M. (2018, October 16). Risk management: an important part of project management. Retrieved from https://project-management.com/risk-management-an-…