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Manage project risk

Metharom Construction (MC) plans to become a leading provider of housing construction and renovation services in the South-East Melbourne area. The company's overall strategy will be based on a continuing improvement process of setting objectives, measuring results, and providing feedback to facilitate further growth and progress. They have been involved in large scale construction for 3 years and are now branching out to residential housing.

You will be taking on the role of a risk consultant. Your position involves developing existing risk management strategies, liaising with teams to support risk identification and management, considering client and organisational viewpoints, and performing risk assessments on a per project basis.

For more information regarding Metharom Construction, please see the appendices and company policy documentation.

Appendix A – Project information

Metharom has taken on a new client, Mr. Kavi Albif. He has recently moved to Australia to be with his wife who has recently taken up work here. He has purchased a block of land in Northcote, Victoria.

He has contracted Metharom Construction to build a 4 bedroom home in Northcote, which originally costs $188,000 excluding land which he has already purchased. Mr. Albif has decided that he would like to use a recently engineered Italian concrete that absorbs air pollution, to better protect himself and his family from pollutants. He has a budget of up to $225,000.

The concrete has only begun being used worldwide within the past 6 months. Very few Victorian supply companies stock the product. Mr Albif’s time limit for the build is 9-12 months or 39-52 weeks.

Metharom has accepted the contract because Mr. Zientek and the management team believe that the project would be an impressive addition to the company’s current portfolio of work, within the residential sector.

Project Objectives:

  • To complete the build on time: 39-52 weeks
  • To source the new material
  • To appropriately utilise the material, with as little waste as possible
  • To stay within budget: $225,000

ASSESSMENT 1

Assessment 1: Conduct a meeting with the site supervisor.

A new build is beginning and the work team have been asked by the client to use a new material for the exterior of the house. The new concrete absorbs pollution in the air, and is better for the environment. However, the new resource has only been available for approximately nine months, and is not readily available. Additionally, a company in Sydney has been in the news recently for abandoning a commercial project that was supposed to use the same material. (Additional information about the project is included in Appendix A)

Meet with your site supervisor (to be played by your assessor). The meeting is to assess the potential risks of the build. You must identify at least 3 risks. They have collected surveys from the work team to assist with risk awareness.

Your assessor will be looking for:

a) Knowledge of the risk context, including relevant legislation and regulations

b) Ability to classify risks according to likelihood and severity

c) Justification of your answers

Risk 1 – Xxxx (Include Response / Insert Risk here)

Context of Risk 1 – (Include information on the risk context, including relevant legislation and regulations)

Xxxx (Include Response here)

Classification of Risk 1 - (Include likelihood, consequences and severity)

Xxxx (Include Response here)

Justificaiton for analysis of Risk 1 above (Include Justification of your answer)

Xxxx (Include Response here)

Risk 2 – Xxxx (Include Response / Insert Risk here)

Context of Risk 2 – (Include information on the risk context, including relevant legislation and regulations)

Xxxx (Include Response here)

Classification of Risk 2 - (Include likelihood, consequences and severity)

Xxxx (Include Response here)

Justification for analysis of Risk 2 above (Include Justification of your answer)

Xxxx (Include Response here)

Risk 3 – Xxxx (Include Response / Insert Risk here)

Context of Risk 3 – (Include information on the risk context, including relevant legislation and regulations)

Xxxx (Include Response here)

Classification of Risk 3 - (Include likelihood, consequences and severity)

Xxxx (Include Response here)

Justification for analysis of Risk 3 above (Include Justification of your answer)

Xxxx (Include Response here)

ASSESSMENT 2

Assessment 2: Create a risk plan. (Maximum of 400 words)Please note that the details of this assessment continue onto the next page.

Create a risk management plan for this build. This document will be used by management and the work teams to monitor and control risks, so you will need to use language that is appropriate for a wide audience.

As the document will be used as a reference, you will need to ensure that it is compliant with relevant legislation.

It must include:

a) Completed risk register, with a minimum of 5 risks (refer to template in appendix B)

b) A job safety analysis (refer to appendix C for a template)

c) Explain how people can submit feedback on the document

d) Risk treatments for the identified risks

(Maximum of 400 words)

Project Risk Management Plan Template

This Project Risk Management Plan Template is free for you to copy and use on your project

and within your organization. We hope that you find this template useful and

welcome your comments. Public distribution of this document is only permitted

from the Project Management Docs official website at:

ProjectManagementDocs.com

Risk Management Plan

<Project Name>

Company Name

Street Address

City, State Zip Code

Date

Introduction

This section explains why risks exist and highlights the purpose and importance of the risk management plan. It provides a general description of why risk management is essential to effectively managing a project and describes what is needed before risk management can begin.

(Include Response here)

Xxxx

Top Three Risks

It is important to explicitly state the top three risks to the project in the Risk Management Plan. This will make management aware of the top risks for the project and the nature of the risks.

(Include Response here)

Xxxx

The top three high probability and high impact risks to this project are:

Eg. Delay in Server Equipment

Due to a manufacturer’s production backlog, the servers are not available for large scale application testing causing a delay in the project schedule. The project manager will mitigate this risk by using servers from the backup data center if needed.

Risk 1 (Include Risk here)

Xxxx (Include Response here)

Risk 2 (Include Risk here)

Xxxx (Include Response here)

Risk 3 (Include Risk here)

Xxxx (Include Response here)

Risk Management Approach

This section provides a general description for the approach taken to identify and manage the risks associated with the project. It should be a short paragraph or two summarizing the approach to risk management on this project.

Xxxx (Include Response here)

Risk Identification

This section explains the process by which the risks associated with this project were identified. It should describe the method(s) for how the project team identified risks, the format in which risks are recorded, and the forum in which this process was conducted. Typical methods of identifying risks are expert interview, review historical information from similar projects and conducting a risk assessment meeting with the project team and key stakeholders.

Xxxx (Include Response here)

Eg. Expert Interview

Two Expert Interviews were held for this project. The interviews revealed several risks which were then mitigated by making changes to the project plan. The remaining risks are included in the Risk Register.

Insert Identification Method

Xxxx (Include Response here)

Insert Identification Method

Xxxx (Include Response here)

Risk Qualification and Prioritization

Once risks are identified it is important to determine the probability and impact of each risk in order to allow the project manager to prioritize the risk avoidance and mitigation strategy. Risks which are more likely to occur and have a significant impact on the project will be the highest priority risks while those which are more unlikely or have a low impact will be a much lower priority. This is usually done with a probability – impact matrix. This section explains risks were qualified and prioritized for this project. For more information on how to qualify and prioritize risks refer to our Risk Assessment Meeting Guide.

Xxxx (Include Response here)

Risk Monitoring

This section should discuss how the risks in the project will be actively monitored. One effective way to monitor project risks is to add those risks with the highest scores to the project schedule with an assigned risk manager. This allows the project manager to see when these risks need to be monitored more closely and when to expect the risk manager to provide status updates at the bi-weekly project team meetings. The key to risk monitoring is to ensure that it is continuous throughout the life of the project and includes the identification of trigger conditions for each risk and thorough documentation of the process.

Xxxx (Include Response here)

Risk Mitigation and Avoidance

Once risks have been qualified, the team must determine how to address those risks which have the greatest potential probability and impact on the project. This section explains the considerations which must be made and the options available to the project manager in managing these risks.

Xxxx (Include Response here)

Risk Register

Every project must maintain a risk register in order to track risks and associated mitigation strategies. This section describes the risk register criteria as well as where the risk register is maintained and how these risks are tracked in the project schedule.

Xxxx (Include Response here)

Sponsor Acceptance

Approved by the Project Sponsor:

_________ Date:______

<Project Sponsor>

<Project Sponsor Title>

This free Project Risk Management Plan Template is brought to you by www.ProjectManagementDocs.com

To complete Appendix B Risk Register

To complete Appendix C for Job Safety Analysis.

Task 2 Part C

Explain how people can submit feedback on the document

Xxxx (Include Response here)

Task 2 Part D

Risk treatments for the identified risks

Xxxx (Include Response here)

Risk

Risk Treatment

ASSESSMENT 3

Assessment 3: Consult with the client.

Meet with the client to discuss the risks associated with their build. Consult with the client to discuss risk treatments, and allow the client to participate in deciding the importance of the risks.

Your assessor will be looking for:

a) Customer service and interpersonal skills

To submit meeting notes of the above meeting below and to complete role play in class. If you have missed class and failed to attend role play you will need to submit a video recording performing the role play with another person with your submission.

Meeting Notes recording discussion between you and client. (This should cover discussion on the risk, the importance of each risk and risk treatment for each risk on your risk register.)

Task 3 - Meeting Notes

Xxxx (Include Response here)

Risk 1 – (This should cover discussion on the risk, the importance of each risk and risk treatment for each risk on your risk register.)


Risk 2 – (This should cover discussion on the risk, the importance of each risk and risk treatment for each risk on your risk register.)


Risk 3 - (This should cover discussion on the risk, the importance of each risk and risk treatment for each risk on your risk register.)

ASSESSMENT 4

Assessment 4: Monitor and control new risks by updating risk plan. (Maximum of 600 words)

One of Metharom’s previous suppliers has started to stock the new concrete. The store is in Cheltenham, and offers competitive pricing. However, the two companies severed their partnership in 2014 on bad terms. Henchmann Supplies frequently made late deliveries without notice or compensation.

Considering this information, you must modify the plan from assessment 2 to include:

a) New risks

b) Changes to already established risks

c) A minimum of two risk treatments

d) Who is responsible for managing the new risk

(Maximum of 600 words)

To copy your Risk Management Plan from Task 2 here and make updates to it. To highlight the updates in a different colour. You will include the information (highlighted in green above) on the Updated Risk Management plan and highlight the updates in a different colour.

To make a copy of your Task 2 Appendix B Risk Register on the Appendix document and label the copy Task 4 Appendix B1. You will then include the information below (also highlighted in green above) on the Task 4 Updated Risk Register Appendix B1. To highlight the updates in the risk register in a different colour.

  1. New risks
  2. Changes to already established risks
  3. A minimum of two risk treatments
  4. Who is responsible for managing the new risk

ASSESSMENT 5

Assessment 5: Review and evaluate existing processes, and make recommendations via a written report. (Maximum of 750 words)

Create a report to evaluate risk management processes. Your report must include:

a) A minimum of 3 suggestions for improving risk management processes

b) A list of at least 5 risks that affect Metharom’s future

c) A suggestion for a process that would improve all future projects

d) Justification of your opinions

Report on Risk Management Review

Executive Summary

xxx (Include Introduction/brief summary here)

Findings

Suggestions for improving risk management processes (minimum of 3 suggestions)

Xxxx (Include Response here)

A list of at least 5 risks that affect Metharom’s future

Xxxx (Include Response here)

Suggestion for a process that would improve all future projects

Xxxx (Include Response here)

Justification of opinion (Include your justification/reasoning of your opinions for all of the above headings here)

Xxxx (Include Response here)

Conclusion/Recommendations

xxx (Include conclusion and recommendations here)

ASSESSMENT 6

Questions

1

List 4 pieces of information that must be included in a risk management plan.

2

Explain the following:

Risk responsibility

Risk management includes decisions about what risks are acceptable and the devising of regulations, procedures, and the like to ensure that risks remain within the limits of what is acceptable.

Risk register

A risk register is a document used as a risk management tool and to fulfil regulatory compliance acting as a repository for all risks identified and includes additional information about each risk.

Risk criteria

Risk criteria is the terms of reference used in making a judgement or a decision on the significance of risk to be assessed, and also include associated cost and benefits.

3

Outline the steps for developing a risk management plan.

Identify risks

Minimise or eliminate the risks

Determine and plan your recovery contingencies

Communicate the plan to all the people it refers to

Prepare a risk management plan

4

Define the following:

Known/known

Known/unknown

Unknown/unknown

5

What is an unknowable risk?

6

Label this diagram appropriately.

Label this diagram appropriately

7

What are 5 ways that you can consult with employees regarding risk?

8

Why are stakeholders included in risk management processes?

9

Compare and contrast qualitative and quantitative risk assessment methods.

10

Label this diagram of a risk matrix, including what the different shades of grey represent.

diagram of a risk matrix
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