File Name: adequate monitoring and evaluating a means of mitigating project risk .zip
Cost saving and timely performance are of utmost importance to all stakeholders who are involved in a construction project that is owner, contractor, consultant and subcontractor. The prime causes of risks in construction projects involve delay and failure to complete the work at specified cost and within the agreed time frame.
- Process of Risk Management
- Risk Mitigation Planning, Implementation, and Progress Monitoring
- Accepting Risk
- Risk Mitigation Strategies in Innovative Projects
Definition: Risk mitigation planning is the process of developing options and actions to enhance opportunities and reduce threats to project objectives . Risk mitigation implementation is the process of executing risk mitigation actions. Risk mitigation progress monitoring includes tracking identified risks, identifying new risks, and evaluating risk process effectiveness throughout the project .
Process of Risk Management
Risks are potential future events or conditions that may have a negative effect on achieving program objectives for cost, schedule, and performance.
They are defined by:. The most important decisions to control risk are made early in a program life cycle. During the early phases, the program works with the requirements community to help shape the product concept and requirements. PMs and teams should understand the capabilities under development and perform a detailed analysis to identify the key risks. Where necessary, prioritizing requirements and making trade-offs should be accomplished to meet affordability objectives. Once the concept and requirements are in place, the team determines the basic program structure, the acquisition strategy and which acquisition phase to enter, based on the type and level of key risks.
Defense programs encounter risks and issues that should be anticipated and addressed on a continuing basis. Risk and issue management are closely related and use similar processes. Opportunity management is complementary to risk management and helps achieve should-cost objectives. Risks, Issues and Opportunities may be in areas including, but not limited to, technology, integration, quality, manufacturing, logistics, requirements, software, test and reliability. DoDI Technical risk management is addressed in DoDI Technical, programmatic and business events can develop into risks, issues or opportunities, each with cost, schedule or performance consequences as shown below.
Statute requires PMs to document a comprehensive approach for managing and mitigating risk including technical, cost and schedule risk in the Acquisition Strategy AS for major defense acquisition programs and major systems. Per statute, the approach for major defense acquisition programs and major systems must identify the major sources of risk for each phase and must include consideration of risk mitigation techniques such as prototyping, modeling and simulation, technology demonstration and decision points, multiple design approaches and other considerations P.
The type of contract, cost-plus or fixed-price, fundamentally will affect the roles and actions of the government and industry in managing risk.
Cost-plus contracts are best suited to situations in which the inherent technical risks are greater typically during development. Fixed-price development is most appropriate when the requirements are stable and expected to remain unchanged, where technical and technology risks are understood and minimal and the contractor has demonstrated a capability to perform work of the type required.
Systems engineers support the PM in executing a risk management program. Programs are required to summarize the risk management approach and planning activities in the Systems Engineering Plan. The systems engineer should assess and describe cost and schedule implications of risks, issues and opportunities at technical reviews. The RMB usually includes the individuals who represent the various functionalities of the program office, such as program control, the chief engineer, logistics, test, systems engineering, contracting officer as warranted, a user representative and others depending on the agenda.
While the processes support risk management, the risk mitigation plans, which focus on risk reduction for individual risks i. A good PRP should:. An example of a tool is the Risk Register. Design Considerations. DAG CH 3—4. The associated DoDI Programs should consider these specialized risk processes when creating their program risk process. The Risk Management process encompasses five significant activities: planning, identification, analysis, mitigation and monitoring.
PMs are encouraged to apply the fundamentals of the activities presented here to improve the management of their programs. The planning process documents the activities to implement the risk management process. The program should address risk training, culture, processes and tools. Risk planning identifies risks and develops a strategy to mitigate those risks. The risk assessment will help determine where to enter in the life cycle. The PM could recommend the program enter the life cycle at Milestone A, B, or C, depending on the maturity of the material solution and associated risks.
Examples of TMRR phase risk reduction activities include:. If technologies are mature, the integration of components has been demonstrated, and the requirements are stable and achievable, the PM can consider entering directly at Milestone B to begin Engineering and Manufacturing Development EMD with acceptable risk.
Examples of EMD phase risk reduction activities include:. If a materiel solution already exists and requires only military modification or orientation, the PM can structure the program to enter at Milestone C with a small research and development effort to militarize the product. Developmental testing should demonstrate the ability to meet requirements with a stable design. Example production phase risk reduction activities include:. Answers the question: What can go wrong? Are there emerging risks based on TPM performance trends or updates?
Risk identification involves examining the program to identify risks and associated cause s that may have negative consequences. While various formal or informal methods can be used to identify risk, all personnel should be encouraged to do so. Risk statements should contain two elements: the potential event and the associated consequences. If known, the risk statement should include a third element: an existing contributing circumstance cause of the risk.
If not known, it is a best practice to conduct a root cause analysis. Risk statements should be written to define the potential event that could adversely affect the ability of the program to meet objectives. If the 90 percent of target power level achieved by the existing ram air turbine design during the TMRR phase cannot be improved, then reduced jammer effectiveness may result.
Answers the question: What is the likelihood of the undesirable event occurring and the severity of the consequences? Products: 1 Quantified likelihood and consequence ratings, should the risk be realized, 2 Approved risks entered and tracked in a risk register. Risk analysis estimates the likelihood of the risk event occurring, coupled with the possible cost, schedule and performance consequences if the risk is realized in terms of impact to the program.
Approved risks should then be entered into a risk register and a risk reporting matrix, as shown below. Notes: 1 Consider fielding of capability to interdependent programs as well. Answers the question: Should the risk be accepted, avoided, transferred, or controlled?
After conducting a risk analysis, the PM should decide whether the risk should be accepted and monitored , avoided, transferred or controlled.
PMs should alert the next level of management when the ability to mitigate a high risk exceeds their authority or resources. Control seeks to actively reduce risk to an acceptable level in order to minimize potential program impacts. Risk control activities often reduce the likelihood of a risk event occurring, although consequences associated with a risk may be reduced if the program changes the design architecture or addresses binding constraints.
Products: 1 Status updates of mitigation activities to burn-down plan, 2 Risk register updates, 3 Closure of mitigated risks. After the PM approves the mitigation strategy, the program should systematically track and evaluate the performance of risk mitigation plans against risk burn down plans as well as assess performance achievement through associated TPMs.
The PM should update leaders with the current risk status at least quarterly, before major reviews and whenever there are significant changes. Programs should integrate risk management with other program management tools. Programs should use appropriate Technical Performance Measures TPM and metrics to aid in monitoring the progress of mitigation plans. Risk Management Overview What are risks? Work-arounds required to achieve mission tasks 2 Minor Impact Costs that drive unit production cost e.
Costs expected to meet approved funding levels Minimal schedule impact Minimal consequences to meeting technical performance or supportability requirements. Design margins will be met; margin to planned tripwires Notes: 1 Consider fielding of capability to interdependent programs as well.
Consequence 2 In general usage, something in dispute or to be decided. On this page What are risks? Program Risk Process Likelihood and consequence criteria Risk tools Tailored program risk training material. List of potential risk statements in an "If Quantified likelihood and consequence ratings, should the risk be realized Approved risks entered and tracked in a risk register. Should the risk be accepted, avoided, transferred, or controlled? Status updates of mitigation activities to burn-down plan Risk register updates Closure of mitigated risks.
Schedule slip will require a major schedule rebaselining Precludes program from meeting its APB schedule threshold dates. Schedule deviations will slip program to within 2 months of approved APB threshold schedule date Schedule slip puts funding at risk Fielding of capability to operational units delayed by more than 6 months 1.
Degradation impairs ability to meet a KSA. Work-arounds required to meet mission objectives. Work-arounds required to achieve mission tasks. Costs that drive unit production cost e. Reduced technical performance or supportability; can be tolerated with little impact on program objectives Design margins reduced, within trade space 2. Minimal consequences to meeting technical performance or supportability requirements.
Design margins will be met; margin to planned tripwires. AWQI Documented identification, analysis, mitigation recommendations and mitigation implementation plans incorporated into the program risk management plan. Identify critical technologies and other areas of risk within the program.
Evaluate technical program risks based on lower level integrated product team IPT risks from both within the government program office and the contractor. Develop and document mitigation recommendations for each identified risk.
Identify technical risks to the program. Determine recommended mitigation approaches and resources required to implement them. Submit risk mitigation plan to the decision maker for approval and assignment of resources to implement it. Implement the approved mitigation plans. Track risks in accordance with the risk management plan.
Risk Mitigation Planning, Implementation, and Progress Monitoring
Risk mitigation strategies are designed to eliminate, reduce or control the impact of known risks intrinsic with a specified undertaking, prior to any injury or fiasco. To anticipate the business future, it is first essential to comprehend both the historical and actual business performance. Cumulative business data will indicate what is practical, what has been implemented, and what has worked effectively in the past. Some risks will continue to occur and recur, such as dependencies, modifications in necessities, environment and conditions and skill set gaps. Business analytics can be used to describe what is happening in the business, track performance, recognize issues that need to be addressed, and convey accurate information for analysis, planning and forecasting.
Not a MyNAP member yet? Register for a free account to start saving and receiving special member only perks. The ultimate purpose of risk identification and analysis is to prepare for risk mitigation. This chapter discusses the importance of risk mitigation planning and describes approaches to reducing or mitigating project risks. Risk management planning needs to be an ongoing effort that cannot stop after a qualitative risk assessment, or a Monte Carlo simulation, or the setting of contingency levels.
This chapter discusses the challenge imposed by the dispersed innovation that shifts toward replicating the positive traits of co-location and coupling it with the unique advantages of the global initiative. Key concepts in this chapter include project risk, risk pertinent to the innovative projects, importance of risk mitigation in innovative projects, different risk categorization involved in mitigating risk in innovative projects, risk mitigation planning, risk mitigation strategies in innovative projects, and risk evaluation and mitigation strategies REMS in various types of innovative projects including the lesson learnt from the innovative projects to handle project risk by adopting risk mitigation strategies. Key Issues for Management of Innovative Projects. Edited by Bernardo Llamas Moya, M. Dolores Storch de Gracia and Luis F.
Definition: Risk mitigation planning is the process of developing options and Risk mitigation progress monitoring includes tracking identified risks, identifying new risks, and evaluating risk process effectiveness throughout the project . These guidelines are appropriate for many, but not all, projects and programs. Risk.
According to its definition, Risk Treatment is the process of selecting and implementing of measures to modify risk. Risk treatment measures can include avoiding, optimizing, transferring or retaining risk. The measures i.
Risk Mitigation Strategies in Innovative Projects
Risks are potential future events or conditions that may have a negative effect on achieving program objectives for cost, schedule, and performance. They are defined by:. The most important decisions to control risk are made early in a program life cycle. During the early phases, the program works with the requirements community to help shape the product concept and requirements.
In the context of the scope, time, cost, and quality constraints, failure is not uncommon in project management. While there is no dearth of research on project risk management, the manifestation of barriers to project risk management is a less dwelt topic. This paper represents various risk categories and barriers to risk management in domestic and international projects through literature survey and feedback from project professionals. After analysing the various modelling methods used in project risk management literature, interpretive structural modelling ISM and MICMAC analysis have been used to analyse interactions among the barriers and prioritize them. The analysis indicates that lack of top management support, lack of formal training, and lack of addressing cultural differences are the high priority barriers, among many others.
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This is known as project risk. Very simply, a risk is a potential problem. Risk is the possibility of suffering loss, and total risk exposure to a specific project will account for both the probability and the size of the potential loss. Guesswork and crisis-management are never effective. Identifying and aggregating risks is the only predictive method for capturing the probability that a software development project will experience unplanned or inadmissible events.
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