Final - Project and Program Risk Management

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FINAL EXAM MGT 5088 Project and Program Risk Management
Susan H. Davenport August 6, 2009

1. Discuss Risk Process and Practices. Why do professionals mandate Risk Management? a) Discuss Risk Process and Practices.
Project Managers must determine the success criteria for managing a project to identify risks that could possibly impede customer requirements. Risk Management is a disciplined, systematic process to obtain the maximum benefits associated with such a management channel. Every project needs some type of documentation related to risk management activity. This type of management may take on an informal or formal approach, but risk management is essential for every project. Risk Management is not a well accepted standard practice since it points out negative aspects of projects, and there are numerous inhibitions that restrain the dynamics of risk management.

According to the Wikipedia, a free web-based encyclopedia, the Project Management Institute (PMI) is a non-profit professional organization with the purpose of advancing the state-of-the-art of project management. The company is a professional association for the project management profession. The PMI sets standards, conducts research, and provides education and professional exchange opportunities designed to strengthen and further establish professionalism.

The Project Management Institute, Inc. (PMI() has established a six-step set of processes and practices for the risk management process as documented below:

1. Risk Management Planning: project risk infrastructure is established and a project-specific

risk management plan is generated.

2. Risk Identification: events with potentially positive and negative impacts are clearly

described.

3. Risk Qualifications: risks are evaluated according to nonnumeric assessment protocols.

4. Risk Quantifications: risks are evaluated according to numeric assessment protocols.

5. Risk Response Planning: strategies to deal with or precluded risks are evaluated and

communicated.

6. Risk Monitoring and control: risk management and response plans are put into action.

b) Why do professionals mandate Risk Management?
Professionals mandate Risk Management in organizations since risk sometimes becomes a secondary issue. This secondary issue occurs since the hope that Project Managers will be able to handle issues and problems as they occur. Since risk remains a secondary issue until an organization’s luck runs out or a profitable opportunity is missed, professionals take a more proactive approach to risk identification and mitigation by applying Risk Management Process and Practices. Based on statistical information, unfavorable risk events eventually occur in good projects without a way to identify and mitigate risk. The Project Manager suffers the repercussions of such type of failure; therefore, professionals mandate Risk Management and support its practices in effort to mitigate risk.

2. Explain the Delphi Technique and steps for effective application. a) Explain the Delphi Technique.
When expert interview techniques are not an option, the Delphi Technique provides an alternate means for extracting information from subject matter experts (SMEs) without pressuring or forcing them to provide much needed information. Many SMEs prefer not to participate in data-gathering processes; therefore, the project manager (facilitator) applies the Delphi technique to collect information directly from the SMEs without infringing on their schedules. This technique allows the facilitator with directed follow-up capability from experts after peers have been consulted so the highest quality of information is extracted from the experts. b) Steps for Effective Application.

To obtain effective information from the Delphi Technique, the Project...
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