Identifying and Analyzing Project Risks
Introduction
A project’s risks are those that contribute to the project’s failure. The importance of project risks in project management is primal and should be taken with utmost keenness. Sub-categorizations of project risks can be put on the back burner as: target audience, intricacy involved in the project, project teamwork participants, and project risks on business ground.
With reference to this project, stakeholders refer to all actively involved parties or individuals as well as officialdoms, all of which are either in-house or outside the project’s signatories organization structure. They are:
The Project Team
Benefactors
Customers
Description of Risks
Pure and particular risk: This is the primary form of risk in a construction project as the one Effectual Holdings is involved in. The contract thus undersigned by Globud and Effectual Holdings insures people as well as property from damage by pure and particular risks which include fire or natural disasters or theft.
Fundamental risk: This type of risk is also particular to construction projects. It entails external influences such as: ruins of war, nuke aftermaths, and ultrasonic disturbances that may cause destabilizing vibrations. Other impacting issues captured under fundamental risk are tax policies, labor laws, occupational safety and health, malevolent destruction etc. The above risks are always insured on statutory grounds and thus no insurance cover is necessary.
Speculative risk: Also part of the construction project risks, a speculative risk is one that occurs due to unforeseen events like natural calamities or underestimations of total project time or finances. Shortages in resources such manpower and materials also count under this category.
Performance risk: These occur when the project, in its completion, fails to live up to the expectations of the stakeholders. Performance risks are analogous to the project’s range as well as quality.
Technological problems: These will occur if the project’s framework depends on novel or complex technology whose efficacy is yet to be proven or passed as reliable. Such a risk upsurges the amount of time as well as cost incurred on the project.
Environmental risk: These are the risks whose occurrence cannot be predicted. They affect the project in its natural environment and can lead to very severe impacts. They include natural events such as storms, water runs, landslides, subsidence, and vibrations. Catastrophic environmental risk incidents induce heavy impact on schedule as well as costs.
Scheduled risk: A schedule risk is one where the project will take much more time to complete than was initially predetermined. The main impact of his risk will be on the cost, since the longer the project takes, the more the cost incurred.
Cost risk: The risk involving a project consuming much more in terms of cost, than was initially expected. Cost risk directly induces performance risk because, more often than not, in light of occurrence of a cost risk, reductions will be made in project range and quality. A schedule risk will also likely occur for when the project takes a longer time due to lack of funds.
Loss of support: When stakeholders or members of the project team opt out of the project, the goals hoped to be achieved by the project are dwindled. A performance risk immediately suffices when the project’s objectives weaken.
Risk Identification
The technique employed in identifying the aforementioned risks as they apply to Effectual Holdings’ project is the SWOT analysis.
Project Risks Assessment
Ranking of Risks (2x2 Matrix)
References
Smith, N. J., Merna, T., & Jobling, P. (2009). Managing risk: in construction projects. John Wiley & Sons.
Uher, T. E., & Toakley, A. R. (1999). Risk management in the conceptual phase of a project. International Journal of Project Management, 161-169.
