Project Risk Management Mitigating Project Risks

Question: Describe about the Project Risk Management for Mitigating Project Risk? Answer: Risk response and contingency plan when vendor is not performing The particular risk response to be undertaken when vendor is not performing must be Risk Mitigation. For the present project i.e. Building a House, the project manager should take stronger measures and reviews to ensure adequate control based on the policies and procedures for mitigating this risk (Pritchard PMP, 2014). To be more precise, the key areas that the risk response strategy for mitigation should focus are as follows: Vendor selection: The risk response plan should carefully review and possibly reconsider revising the due diligence steps in vendor selection process. The steps may include asking the vendor to provide appropriate references for their performance, introduce data backup systems, obtain audited financial statements, researching their backgrounds, reputation, lawsuits to be able to determine the level of satisfaction. Vendor contract: The project manager should ensure that the following issues are addressed adequately in the vendor contract: Contingency and business recovery plans and strategies Issues regarding human resources Right to retail other third parties Terms of the agreement and accurate description of the scope of services Written procedures and payment schedules Warranties, disclaimers and liabilities Accurate description of factors constituting termination, remedies, cure and default Customer complaints and identify the person that has the responsibility to respond to the complaints Vendor management and monitoring: The vendor management and monitoring process is very important after the vendor selection process is sealed with signed contract. The project manager should involve the senior management in the process of policy and procedure approval as well as monitoring the performance and activities of the vendor. The different activities that should be performed by the senior management are as follows: To ensure vendor compliance with customer protection regulations and laws To research and assess the financial condition of the vendor, conduct periodical quality assurance audits To review and compare the actual performance metrics with the service level agreements, test the contingency plans, call meetings to review contract performance Contingency planning: Contingency plan intended to mitigate poor and unsatisfactory vendor performance should primarily focus on significant and reasonable efforts for resolving the performance degradation issues. If these measures do not work, ultimate measures can include changing the service providers or returning the task to the organization or even exiting the business (Zhang Fan, 2014). Apart from that, another measure can be taken to establish a test period to check whether the vendor performs satisfactorily and only after positive results are received, the contract can be expanded. Risk response and contingency plan when equipment arrival is late In this particular scenario, the risk response planning for the House-Building Project should be Risk Acceptance (Hwang, Zhao Toh, 2014). In this case, the senior management should be notified in an immediate basis about the major increase of threat because of the one-month delay that already occurred in the delivery of the ordered equipment. The Contingency Plan includes developing appropriate action plans to identify the accurate loss caused by the delay in delivery to be able to quantify the loss in a real time basis (Teller, Kock Gemunden, 2014). Furthermore, instant notice should be provided on the impact as well as support the costs to the extent of the measured impact. The contract scope and potential losses are reviewed with contemporaneous documents (invoices, timesheets and daily reports). Risk response and contingency plan for hurricanes in the project location The House building Project should consider Risk Avoidance and Risk Mitigation for responding to the risk involving possibilities of hurricane occurrence (Kendrick, 2015). For Avoidance, adequate and appropriate measures to take prior protection for preparedness should include the following: Confirm insurance including windstorm coverage, flood insurance, loss of use coverage Form a hurricane planning team that should be responsible for taking necessary protective measures against possible hurricanes if might occur Recovery Team formation should be formed by project administrators Several hurricane awareness levels and readiness actions should be sincerely considered by the managers For risk avoidance Hurricane Awareness Levels and Readiness Actions are undertaken For risk mitigation Hurricane Recovery Levels and Corrective Actions are taken The response plan should concentrate on establishing strong, efficient and effective warning mechanism Risk response and contingency plan for unexpected increase in task effort In this case, the project manager should consider responding to risk by adopting a Risk Mitigation strategy. The contingency plan should focus on integrating risks with the effort estimation process (Hopkin, 2014). To be more specific, mitigation and contingency plan should involve detail review of the duration, costs and resource allocation. PERT chart can be used for expected, optimistic and pessimistic duration for each task subjected to be analyzed. References Hopkin, P. (2014).Fundamentals of risk management: understanding, evaluating and implementing effective risk management. Kogan Page Publishers. Hwang, B. G., Zhao, X., Toh, L. P. (2014). Risk management in small construction projects in Singapore: status, barriers and impact.International Journal of Project Management,32(1), 116-124. Kendrick, T. (2015).Identifying and managing project risk: essential tools for failure-proofing your project. AMACOM Div American Mgmt Assn. Pritchard, C. L., PMP, P. R. (2014).Risk management: concepts and guidance. CRC Press. Teller, J., Kock, A., Gemunden, H. G. (2014). Risk management in project portfolios is more than managing project risks: a contingency perspective on risk management.Project Management Journal,45(4), 67-80. Zhang, Y., Fan, Z. P. (2014). An optimization method for selecting project risk response strategies.International Journal of Project Management,32(3), 412-422.