Effective Risk Management in Projects Research Paper

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Anticipated Implementation Issues and Opportunities

Effective risk management is crucial for ensuring project success. This is true for not only large, complex projects, but also small and less complex projects such as renovating the kitchen at one’s residence. Kitchen renovation is a project that may involve substantive expenditure, hence the need for proper identification and mitigation of the associated risks. To this end, it is acknowledged that the major risks associated with kitchen renovation revolve around aspects such as contractor and project manager incompetence, budget overrun, delivery delays, theft of supplies, accidents and injuries, unfavorable weather, insurance inadequacy, and poor communication between stakeholders. With low to moderate likelihood of occurrence, these risks can be mitigated using strategies such as thorough evaluation of the contractor and project manager before selection, selection of a sufficient home insurance package, employment of a security guard, and ensuring effective communication. Nonetheless, implementing the formulated risk management plan may not be a straightforward endeavor as unexpected issues may emerge. This paper highlights the critical success factors as well as issues and opportunities associated with implementing the identified risk mitigation measures.

Critical Success Factors

Critical success factors (CSFs) are factors that must exist or go right for project success to be achieved (Project Management Institute [PMI], 2008). Most of these factors are usually beyond the project manager’s control. As must-haves, CSFs should be closely monitored throughout the implementation process (Kendrick, 2009). Three CFSs in this case include project funding, stakeholder commitment, and effective communication. Project funding basically denotes the financial resources required to accomplish the kitchen renovation project. For instance, funds will be required to procure construction supplies and hire sub-contractors. The project owner should ensure the required resources are available whenever required. This will be crucial for avoiding or minimizing delays in project completion.

Stakeholder commitment refers to the dedication of stakeholders to the project. The importance of strong stakeholder commitment cannot be overemphasized (Dinsmore & Cabanis-Brewin, 2011). It takes several stakeholders to accomplish a project: the client, the project manager, the general contractor, subcontractors, and so forth. In this case, key stakeholders involved in the project include the homeowner, the project manager, the general contractor, the insurance agent, and the security guard. Commitment from every one of these stakeholders will be important to the success of the project. Basically, commitment means that every stakeholder fulfills their obligations, duties, and responsibilities without fail. For instance, the homeowner should hire a competent project manager and general contractor to mitigate the risk of contractor and project manager incompetence. Equally, the project manager and general contractor are responsible for ensuring all safety precautions are followed all the time to avoid or minimize the occurrence of accidents.

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Without every stakeholder fulfilling their roles effectively, it will be difficult to complete the project successfully.

The other CSF is effective communication. This is an especially overlooked factor when it comes to project risk management (Kendrick, 2009). Communication essentially denotes the flow of information from one entity to another. Information must be effectively communicated to ensure everything goes as planned. The significance of effective communication in project risk management particularly stems from the fact that projects usually involve a multiplicity of stakeholders (PMI, 2008), like in this case. For example, it will be important for the project manager and the general contractor to communicate with suppliers in a clear and sound manner to ensure construction materials are delivered in the specified quality and quantity, and within the stipulated timeline. Also, the project management and general contractor should have a clear understanding of the homeowner’s expectations. This can be achieved through effective communication between the homeowner, the project manager, and the general contractor. Effective communication will also be vital for effective conveyance of duties and responsibilities, relevant precautions, as well as unexpected changes in aspects such as project scope, budget, and duration.

Implementation Issues and Opportunities

Risk management is not just about identifying risks and formulating measures to mitigate the risks. It also involves anticipating issues (Kendrick, 2009). Indeed, though often used interchangeably, the terms risks and issues do not mean the same thing (Kelly, 2015). Risks are essentially events that may or may not occur (PMI, 2008). In risk management, focus is specifically on what could go wrong. The project manager identifies events that could hinder the commencement, progress, and/or completion of the project. In other words, risk management is a “what if” analysis. In this case, for instance, what could happen if the general contractor does not have the prerequisite competence and qualifications, or what could happen if a fire accident occurs? The project manager explores all the possible scenarios and develops a plan to mitigate the identified risks.

Issues are, however, different, meaning that risk management and issue management are not exactly the same. While risks are events that may occur or may not occur, issues are events that have actually occurred (Kelly, 2015). In spite of a robust risk mitigation plan, some of the listed risks may turn out to be actual problems – issues. Often, there are unexpected or unknown events that catch everyone by surprise. Traditionally, risk management involves predicting possible risks mostly on the basis of past events (Kendrick, 2009). The problem with this approach is that history may not always correctly predict the future. This means that until an issue actually occurs, it cannot be said….....

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