Information Systems Foundations, Coursework Example

The Importance of Project Risk Management

Information Technology Project Management is a methodology or set of technique that is implemented for identification, analysis and countering risks throughout the project lifecycle and supporting every aspect of meeting the requirements and objectives of the project (Schwalbe, 2010). Moreover, Oracle White Paper pressures over the significance of project risk management and states that, “Projects are becoming increasingly more complex and costly, making it even more difficult to analyze and mitigate risks using informal methods” (Management, Environment, Sciences, & Council, 2005). However, the term fire-fighters are referred by Oracle for the project managers. Project managers are the risk-takers. They can be anyone of them mentioned below:

• Risk-averse: project managers do not achieve contentment if more payoffs are at risk.
• Risk-seeking: project managers contain a complex tolerance for risk and are extra contented if payoff is greater.
• Risk-neutral: project managers preserve stability between payoff and contentment.

For example a case study using Calleam Consulting, Ltd. sites  is observed that contains a number of crucial points and faults related to poor risk management (Gregor, Gregor, & Hart, 2005). The system was collapsed when the electrical fault occurred. This fault accompanied with multiple power failure leading towards roadblock. For this situation, filters are required in order to avoid electrical gushes (Gregor, Gregor, & Hart, 2005). Due to the time consuming process of delivery and installation, testing time was restricted. Therefore this incident study features poor risk management and needs more focused team for project management in order to reduce future faults. They also aspect poor schedule management that includes under develop complete risk management tactic.

Calculating Risks for Business

The PMBOK Guide defines the risk management plan “how project risk Management will be structured and performed on the project.” In addition, Risk management strategies include a number of details such as risk techniques according to the approved budget and timetable effects over the risk chasing events. The effects of risks may hit anyone anytime during the project and can be for short-term and long-term periods. Therefore, it is important to reduce risk successfully. In order to minimize risks, project managers must have good knowledge and comprehensive risk management plan. There is a homogeneous tactic for risk management and is defined as: “A collaborative risk identification process helps create buy-in on project assumptions and spreads awareness throughout the organization.” It is necessary to efficiently connect along with the project associates and stakeholders regarding the risks. Furthermore, new techniques and methodologies also have great impact as stated by the Oracle.

Michael D. Taylor’s Risk Management Approach

The Michael D. Taylor, master project manager and having over thirty years of engineering and project management experience conducts a new technique in order to integrate qualitative and quantitative investigation into risk preparation. In the University of California Extension in Silicon Valley, Taylor is the Project and Program Management Certificate director. In this approach, solutions are given on the basis of organized and suspicions that generates possible risks. However, the risk management plan must be wide-ranging. As mentioned by Taylor “many risk management plans address only foreseeable risks and fail to address the unforeseeable ones” (How to Effectively Manage Project Risks, 2009).

In Taylor’s approach the qualitative and quantitative analyses are separated while in Oracle’s approach these procedures are included in general risk assessment phase. Taylor’s approach contains identify risks during initial procedure. In fact, this procedure is considered as the most typical step in risk management strategies. Moreover, according to the Taylor the procedure related to risk identification is a continuous task for project managers. A project manager uses several techniques.

These techniques are used for the risk mapping and determining the cause of risks. For the project managers, these techniques allow them to get focused on the project and the risks associated with the project. Also, these techniques provide good practical perceptibility for risk in project. The Taylor’s approach regarding qualitative analysis comes into limelight once the risk is identified. (Taylor & Bogdan, 1998) As mentioned by Taylor, “is always to be analyzed by the probability of the event occurring and the consequence if it does occur.” The risk must focus on the project’s schedule, cost, scope, and quality as mentioned by both Oracles’ approach.

Conclusion

We have discussed the prime importance of IT project management and calculating business or project risks for assisting business in every aspect of production or delivering a product at the front office. Likewise, the measurement of key point indicators and key goal indicators are the characteristics of IT project management practices and to achieve business objectives. The different between data and information can be differentiated by comparing data that is utilized by project managers, as they make them usable by adding practical actions items. Moreover, business intelligence and knowledge incorporates experience of employees or project managers who have successfully rolled out project within the specified timelines, available resources and most importantly, within the given budget.

References

Gregor, S. D., Gregor, D. H. S., & Hart, D. N. (2005). Information systems foundations: Constructing and criticisingANU E Press.

Management, C. O. A. U. S. D. E. P., Environment, B. I. C., Sciences, D. E. P., & Council, N. R. (2005). The owner’s role in project risk management National Academies Press.

Monoharan, K., & Mansor, Z. B. (2012). Review on project quality management planning: Software quality planningGRIN Verlag.

Schwalbe, K. (2010). Information Technology Project Management 6E Course Technology/Cengage Learning.

Taylor, S. J., & Bogdan, R. (1998). Introduction to qualitative research methods: A guidebook and resource Wiley.