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Project Risk Management Assignment
Critique of the Techniques used
The four techniques used for analysis of the Project Risk Management Assignment, SWOT analysis, PESTLE analysis and Gantt chart. Below is the detailed critique of these techniques and their application to analyse the case.
1. Risk Management:
Every project has a certain degree of risk associated with it. Even the best-planned project is subjected to some risks. It is very important to understand the risk associated with the project before venturing into it else all the project planning will go waste if there is no planning for the risk which might lead to the complete fiasco of the project. The impact of the risk increases with the progress of the project as at a later stage the cost involved is very high in order to tackle the risk. Thus, a proactive approach is required to for a project instead of reacting later on the situation. Hence, risk analysis is very important so that contingency planning can be done for the risks. The steps involved in risk management are to first identify the risk and its sources. Then assess the risk by analysing the severity of risk, its impact, its likelihood of occurring and ease of controllability of risk. After the assessment of the risk strategy is formed, implemented, monitored and changed according to the situation. For this, one might have to spend time and resources on this thus delaying the initiation of the project but it saves a lot of costs that might arise due to any uncertain event.
In the case which is to build a new educational annex following risks were identified:
- The risk associated with the price required for the acquisition of the building which might severally impact the budget.
- The price of raw material and equipment could rise.
- The risk associated with the workers. They might get injured, might ask for increase pay, may even go on strike and might leave the project in between.
- Lack of social acceptance of brand is another major risk involved.
- The risk associated with a natural disaster like an earthquake, flood etc.
By conducting the risk management exercise we were able to better plan the project. Below is the table that shows the risk assessment and risk mitigation for every risk.
2. SWOT analysis:
SWOT analysis helps to analyse the internal and external environment affecting the project. Here Strength and Weakness are the internal factors affecting the project whereas Opportunities and Threats are the external factors. Understanding these internal and external factors helps in formulating the correct strategy required for executing the project in a proper way. It can be the best source of information for marketing strategy building by focusing on the opportunities available and playing on the strength to achieve them one can build a strong strategy. Also, by understanding the weaknesses one can understand the areas that need attention for improvement and by planning for the threats one can overall improve the organisation and strengthen themselves. It also helps in identifying the alternatives to a strategy. However SWOT analysis does not cover all the aspect related to strategy building and one has to use another analysis method along with this for strategy building. Also, the scenarios have become very dynamic and one need better tools to remain competitive in the industry.
In the above case, it helped to recognize the opportunities that can be used to overcome the weakness of old people might not be interested in the museum but at the same time we can offer discounts to school and attract children, the commercial opportunities like opening up of shops and cafes might help to attract a young crowd. Similarly, the strengths and threats helped to build up the strategy. Below table shows the SWOT analysis.
|• Developing innovative education and services with the use of computer equipment through the technology •Staff are extremely committed and skilled Funding (legacy) Annex to brand Technology advanced||- Inadequate space to expand the section Energy, Environment. -Occur equipment and tools damages, because Inadequate staffing who they have experience with technology. - Lack of sustainable funding. - Lack of new innovations - Old people not interested in museum science|
|· Schools discount · University links · COMMERCIAL OPPORTUNITIES IE Shops, restaurant, café · Increase of future investors’ Interest in tourism and education · Developing market and opportunities to open Annex science museum in different area · Council support for open new museum||· Other Annex science museum competition · Growing contradictions of the museum’s tourist activity with its main activity in terms of general lack of development of museum structures · Financial dependence of museums income · Tourist can contradict the science museum to be a historic museum. Drop in attendance by school groups; or public reliance on interactive entertainment|
3. PESTLE analysis:
This analysis is basically used to understand and analyse the external environment in more depth. This analysis tool is very easy to understand and simple to use. Like SWOT, it also helps in developing the strategy for the external factors affecting the business. Using this tool one can better understand the future threats and take measures to reduce them. It also helps to locate new opportunities and exploit them effectively especially if the company is trying to operate in foreign countries as doing this analysis can make it easy for one to understand the cultural, economic solution, social and political scenario of that country. However, this tool also carries some disadvantages. It does not take into account the internal factor that will affect the operation of the business. As this tool is very simple the users tend to over-simplify it and there are good chances that they might miss some important information. For effective use of this tool, it is very important to extract proper data like what are the economic policies and social aspect related to business. This can be time-consuming and might be expensive. The tool mostly works on a lot of assumptions and with the dynamic nature of the business environment, these assumptions and even data might become redundant while drafting strategy based on this tool.
In the current project it helped to understand the regulatory bodies, trading policies, legal issues, demographics and advertising strategy for them, the need to educate the people and need to innovation and use of technology so as to operate more efficiently and remain competitive. Thus, this analysis was very helpful in taking a decision on various issues related to the project.
4. Gantt chart:
Gantt chart is basically used for planning and scheduling of the project and resources. It helps in defining the milestones and time required to achieve them. It also helps to keep a track of amount of work completed and how the project is progressing. It also helps to understand the critical activities and the available slack time for various activities. By having various colour coding one can use it as an effective presentation tool for laying down the complete project in a chart form andresearch report. However, the basic prerequisite for the Gantt chart is to first of all finalize all the activities and its estimations. It becomes difficult to incorporate any changes in activities in between the execution of the project as the whole chart might need to be changed and accordingly the scheduling is also required to be done. If proper slack time is not provided them one might land into trouble with working according to this chart in case any new activity is required to be inserted. Though it shows the relation between various activities like dependencies of the activity but it becomes difficult to show all the aspect related to the dependency in the same chart and all kind of dependencies might not be feasible to represent. Number of financial resources required to complete the task decide the duration of the activity but these resources are not represented in the Gantt chart and this chart fails to show the activity which is having the maximum risk of delay.
In the current project, Gantt chart was of very help in planning the entire project and scheduling the resources. It also helped in representing the dependencies and various milestones that are required to be achieved and finally in providing the estimation of the total number of time required to complete the entire project. Thus, this was the most important tool that we used for the project planning.
Reflection on PRM Skills Used:
Working on this project helped me to actually put into practice various classroom learning. This, in turn, helped me to strengthen my concepts on the subject topic. The project management skills that were used are strategising for the project using various analysis, creating work breakdown structure, estimating time and cost involved in the project, Sustainable development, managing risk, scheduling of resources and identifying the key performance indicators to improve the project efficiency. For strategising the analysis used includes SWOT analysis, PESTLE analysis and stakeholder analysis. It helped me to learn various aspect to keep in my while crafting strategy. Defining the project was the most important thing it required to chalk out the project objective and decide the project priorities. Without this step it would have been difficult to move ahead with the project.
Another project management skill that was used was creating work breakdown where we divided the project into different elements and further divided these elements into smaller elements thus making an outline of the project. This helped to identify the deliverables at every stage of the project. Development of project plan and scheduling of resources was done with the help of Gantt chart. It not only helped in deciding the duration of the project and scheduling of the resources but also helped to identify the dependent activities thus listing down constraint for an activity. Though it does not explicitly mention the critical path but helped in identifying the path with least slack time available. Critical path analysis was separately done.
The key performance indicators identified for both short term and long terms helped in deciding what to focus upon in short term and long term to improve the operational efficiency. The short-term factor indicated that timely and under budget launch of the project is very important and also it is very important to focus on the quality. Failing to do so will not only lead to high cost but will make it very difficult in future to sustain the project. From long term performance indicators, we concluded that a number of visitors and retention of these visitors are more important for which branding and marketing are essential. Thus, this helped to strategies the project.
As this was the group project we all were involved at each and every step of the project. However we also divided the task among ourselves. My personal contribution was there in each and every step of the project but what I focused upon was the risk management. I was assigned to identify the risk, assess the risk, and risk mitigation by developing the contingency plan for it. This was very important step as without it any amount of planning is of no use. I analysed that it is required to cover risk subjected to building, loss of revenue, legal liabilities and natural calamities. It was very important to retain the skilled workers as if they are gone then additional cost will be incurred. Timely service was another factor as failure to comply with it might weaken the creditability of the organization. It is important to constantly monitor the work of the contractor as if he fails to complete the task on time then additional cost will be incurred. The software and IT infrastructure required for the project have the potential risk of virus attack which will destroy all the content and database. The content and the database are very important to the project especially when it is related to the education sector. Of course the natural calamities like flood, wildfire and earthquake can not only destroy the building but valuables in the building as well as in the museum. It will also destroy the IT infrastructure and thus will lead to heavy losses. To mitigate this on should keep data at multiple servers and should get the building insured.
Apart from the usually operational skills required to plan the project other skills like knowledge of financial planning and marketing were also used. Financial skill was used to estimate the cost involved in the project. This is very important to do as it will further help to decide the breakeven point for the project and would help in deciding that whether the project is financially feasible or not. Marketing skills were used in deciding the advertisement and branding strategy.
Working in a team was the biggest skill used in doing this project. Project management is not only about how the project is planned but also about how the project is carried out. This assignment was in itself a project and required working with a team. It required patience to listen to others point of view, identifying the roles and responsibility of each member, deciding milestones for the project and coordinating with each other to complete the project. I believe these skills were the most important skills that were implemented in the project.
Key Learning from the Project:
- The application of the classroom learning in a real life situation and understanding various concepts of the project management in depth like SWOT analysis, PESTLE analysis, stakeholder and management analysis, work breakdown structure, Gantt chart, critical path analysis, risk analysis, project budgeting, resource scheduling and key performance indicators.
- Understanding the various issues to keep in mind while developing a project plan. After the presentation, I realized that the problem that one can encounter in today’s scenario are very dynamic in nature and one has to keep in mind the possible change in the external environment in order to do better risk management. This will help me to conduct project planning in a better way in future.
- Application of finance and marketing in the project management thus integrating different management disciplines in one project and understanding the dynamics of it. I realised that for cost estimation it is very important to understand the nature of business first as this will help to understand the cost incurred. Also, a thorough research is necessary in order to identify the actual cost involved for a particular element. This will help in making a close estimation of the actual cost.
- Working in a group as a team was the biggest learning. It taught me to have the patience to listen, to understand others point of view, to collaborate and coordinate, to take responsibility and to learn from each other. It also taught me to handle a team and people from different background thus helping me to improve as a manager. It helped me to improve upon my communication and other soft skills.
Critique on Articles from Journals of Project Management
The first article is on project management second order and its usage in managing the complexities and changes in the project (Manfred Saynisch, 2010). Project management second order or PM-2 integrates the traditional approach to project management along with new ideas and insight on natural and social science. The author states that the need for globalization and innovation has lead to increased complexities. These complexities have led to various changes which are dynamic in nature and the traditional approach to project management are not designed to handle these dynamic changes. It is very important to incorporate certain new theories in traditional approach such as the theory of evolution and chaos, the theory of complex system, synergetic etc in order to tackle these dynamic changes. It defined various types of complexities and suggested systematic architecture to solve those complexities. It basically talks about the integration of the technology with social theories and suggest implementing the project in a transparent manner and having a separation view on personal and organizational competency to achieve success. This article helped to understand how to practice project management keeping in mind the future changes and complexities in the project.
The second article discusses the stakeholder theory in project management (Paul Littau et. al, 2010). It analyses the changes in the stakeholder theory over a period of 25 years. It develops a pattern of its changes and recognizes various drivers of the theory. Thus, it helps in gaining an in-depth understanding of the stakeholder analysis so as to better implement it during project planning. They found that this theory was applied across various nations for project management purpose and its usage is increasing in this field. The stakeholder theory was found to be mainly used in project strategy, project evaluation, project risk assessment and project performance. This theory is widely used and applicable in project management. It is very important to keep these points in mind before conducting stakeholder analysis for project management as the motive behind the analysis influences the outcome of this analysis. This article helped to have a broader perspective in mind while applying this strategy tool.
The third article is on risk management in construction project (Martin Schieg, 2006). As our project is on creating a new education annex this I believe was most relevant article. It specifically discusses the implementation of risk management in a construction project. It identifies six steps that are involved in the risk management in a construction project. These six steps are the identification of the risk, analysing the risk involved in the project, assessing the risk identified, controlling of the risk, monitoring the risk and controlling goals i.e. based on risk monitoring the risk strategy is again checked and if required changed. This article actually helped me to carry out the risk analysis as it gives the broader heads for identification of the risk namely: quality risk, personal risk, cost risk, deadline risk, strategic risk and external risk. It also helped to understand various parameters required for monitoring the risk and suggested ways to implement the risk management.
The fourth article discusses various project planning styles that are applicable in the dynamic environment (Simon Collyer, 2010). As the nature of the business is getting highly dynamic due to rapid change in the external environmental condition thus it is very important to understand the different project management styles that can be used to effectively carry out a project. Due to dynamic environment various problem can arise like short time span, high level of interdependencies and customization, uncertain outcomes, need for flexibility and need for quick decision making. It studies ten industries and based on it suggest different approaches. It also recommends stage release and emergent planning keeping in mind to minimize the risk involved. Thus, this article is very useful in practically implementing a project. In our assignment, we have mostly discussed various tools to analyse and build a strategy but have not actually discussed on how to implement and execute those strategies. This article will help us to actually decide upon the style of implementation of the strategy and will help us to cope up with dynamic nature of the external environment.
Saynisch, M. (2010) Mastering Complexity and Changes in Projects, Economy, and Society via Project Management Second Order (PM-2). Project Management Journal, Vol. 41(5). 4-20
Stieg, M. (2006) Risk Management in Construction Project Management. Journal of Business Economics and Management. Vol. VII(2). 77-83
Littau, P., Jujagiri, N.J., Adlbrecht, G. (2010) 25 Years of Stakeholder Theory in Project Management Literature (1984–2009), Project Management Journal. Vol. 41(4). 17-29
Collyer, S., Warren, C., Hemsley, B., Stevens, C. (2010) Aim, Fire, Aim—Project Planning Styles in Dynamic Environments. Project Management Journal. Vol. 41(4). 108-121