Homework Question on Risk Management
- Read the Forbes article, “Managing Capital Projects in a High-Risk World.” Based on the content presented in the article, describe some of the risk management techniques and tools available to a PM.
- Explain how you would apply them to assessing the risk involved with implementing a service or product improvement, or to the design of a new service or product.
- http://www.forbes.com/sites/steveculp/2012/05/29/managing-capital-projects-in-a-high-risk-world/ Comments: Category changed from ” Project Quality Assurance ” to “Marketing” by Rory
Homework Answer on Risk Management
According to Steve Culp, a global finance and risk consultant, capital projects involve a high level of risk and as a result subject their reputation on spot (Steve, 2012). Evaluating inherent risk involved in capital projects is difficult because of market volatility and transparency when things fail to work out. Factors that increase the risk in capital projects include the high cost of financing, partnership challenges, environmental factors, and possible industrial unrest.
Applying effective risk management practices in capital projects is worthwhile and adds value in areas, such as monitoring, risk assessment, and measurement. These practices are useful as they help organizations to make better decisions in selecting worthwhile projects and completing them successfully (Steve, 2012).
When designing, improving or implementing a new product or a service, setting up a strong governance structure is an effective risk assessment practice for project managers. Strong governance is necessary at all stages of the project regardless of its size (Steve, 2012). It is useful as everyone in both the operational and management level becomes accountable. In addition, strong governance helps the decision makers to make accurate decisions taking into account the risk involved.