Managing Risks in Distributed Teams, Business Plan Example

Introduction

The article[1] discusses the topic of project risk management. The need for managing risks in projects is discussed. The article fills in the existing gap in knowledge regarding risk management in distributed teams. The example of a software project is used to illustrate the proposed method of risk management in practice.

Article synopsis

A wealth of literature was written about the importance of effective risk management in software projects, but no process for managing risks in distributed teams was ever offered (Persson & Mathiassen 20). The fact is in that many present day software projects are geographically distributed, and software project managers need a better understanding of how to manage distributed teams and essential project risks. To develop a solid foundation for the process of project risk management, the authors analyzed 72 scientific articles and synthesized the most common risks into a two-level taxonomy. First, eight risk areas were identified: task distribution, knowledge management, geographical distribution, collaboration structure, cultural distribution, stakeholder relations, communication infrastructure, and technology setup (Persson & Mathiassen 20). Then, specific risk factors for each area were defined. The authors are confident that distributed project environments significantly intensify traditional risks; at times, these risks intensify to the point where traditional project management solutions no longer work (Persson & Mathiassen 21). For example, the members of the distributed project team may have a different understanding of how to use available technological capabilities and to share available information across geographical distances. Language barriers present another serious risk to the success of a distributed team project (Persson & Mathiassen 21). Here, the authors categorize across four different resolution techniques: planning will help project teams to design and organize projects in distributed contexts; control will facilitate monitoring progress across project sites; social integration will help to manage cultural differences in teams; and technical integration will increase technical compatibility and connectivity across sites (Persson & Mathiassen 21). To make the whole process of risk management more comprehensible, Persson and Mathiassen structure the risk management process around the three main steps: identification and analysis of risks; development of risk mitigation plans; and implementation of these risk mitigation solutions (21).

Identifying and analyzing the risks is a multifaceted process. The risks are numerous, and the existing language and communication disparities make the whole process even more problematic. Persson and Mathiassen develop a process that accounts for these difficulties. In the proposed model, team members identify and analyze the risks for each individual site and then discuss the results in a joint meeting, to arrive at an overall risk assessment and to prioritize the risks (Persson & Mathiassen 22). A variety of web-based tools are used to bring the members of the distributed team together and to make the general risk assessment possible.

The development of risk mitigation plans in a project revolves around the high-priority risk areas and involves a variety of risk resolution techniques. Persson and Mathiassen suggest that users of the process develop novel or company-specific techniques; these solutions are being developed during the joint risk management meetings and are based on the results of the overall risk assessment for each particular project (23).

The final step of the proposed model is the development of mitigation plans for each prioritized area (Persson & Mathiassen 27). The plan must address the five basic elements of risk mitigation: the objectives, the deliverables and milestones, the responsibilities, the approach, and the resources (Persson & Mathiassen 28). These principles and recommendations leave enough room for modification and creativity. The basic tasks of risk management in distributed teams are: to keep risk management simple, to promote balanced participation, to adapt taxonomies, and to attract capabilities (Persson & Mathiassen 29). These principles will help project managers to successfully mitigate even the most challenging risks.

Conclusion

That projects are associated with numerous risks is a well-known fact. The question is in how to manage these risks effectively. What Persson and Mathiassen write in their article is just one of many approaches to risk mitigation in project management. However, the article also reflects the realities of globalization, which turns distributed teams into a routine form of cooperation in projects. The proposed model of risk management will speed up the progress of any project and will help managers to avoid failures that result from the misbalanced evaluation of the most important project risks.

Project procurement system selection model

Introduction

The recent years have been marked with significant changes in the technical and economic capabilities of the construction industry. Traditional procurement methods are becoming obsolete, and complex procurement systems are being developed to help the construction industry to meet the demands of the global reality. The discussed paper[2] presents the process of developing a project procurement system selection model (PPSSM), which will help project managers to choose the most appropriate procurement system that fulfills client needs and project requirements.

Synopsis

Alhazmi and McCaffer suggest that the choice of an appropriate procurement method in projects has a potential to reduce construction project costs by 5% (176). Each project is specific in terms of goals and requirements, and to guarantee any project success, the procurement system must address the technical features of the project, as well as contractor and client needs (Alhazmi & McCaffer 176). Throughout the history of project management, numerous procurement systems were developed to help the clients to use procurement systems that meet their specific needs; however, times are changing and new procurement systems are required to enhance the quality of projects in the construction industry. Given the multitude of project procurement systems, project managers need to operate objective criteria, which will help them to choose the most appropriate system of procurement for each particular construction project.

In the process of designing the project procurement system selection model (PPSSM), the authors constructed a framework “to be used in evaluating the activities associated with the design and construction of a project in relation to various procurement systems” (Alhazmi & McCaffer 176). The second step was to design a comprehensive methodology which would be used in the process of selecting the most appropriate procurement system (Alhazmi & McCaffer 176). The proposed model is a unique combination of the analytic hierarchy process and Parker’s model of value engineering (Alhazmi & McCaffer 176). The model of procurement system selection will lead project teams to discuss and evaluate the existing procurement system against a set of criteria. The model comprises several evaluation methods and screening stages, which help to evaluate potential procurement systems prior to subjecting them to further analysis (Alhazmi & McCaffer 176). As a result, the model allows choosing the most efficient forms of procurement for each construction project.

The first stage of the selection model is feasibility ranking: here, project managers will develop a set of criteria to judge the feasibility of the potential procurement systems (Alhazmi & McCaffer 177). Each procurement system is to be ranked on a 0-5 basis, with 5 used to mark the highest probability of implementing with the most benefit, the least time, and the required quality (Alhazmi & McCaffer 177). It is important that no procurement system is discarded without being scored: the aim of the first screening is to define the procurement systems that are feasible and non-feasible for each particular project (Alhazmi & McCaffer 177).

The second stage of the model is evaluation by comparison – the comparison of feasible procurement system is performed by listing their advantages and disadvantages (Alhazmi & McCaffer 177). Once the process of comparing advantages and disadvantages of each procurement system is completed, these systems can be ranked according to the decision-makers’ preferences, to define the higher ranked systems for further analysis (Alhazmi & McCaffer 177). The third stage of the selection process is weighted evaluation, which employs the benefits of paired comparisons and matrix analysis, to define the optimal procurement systems according to the most important factors in the selection process (Alhazmi & McCaffer 177). Paired comparisons and matrix analyses are used to choose the most relevant procurement systems that meet clients’ needs. Finally, during the final stage of the procurement system selection, the decision support software is used to structure the PPSSM: the software chooses the most appropriate procurement system based on the information obtained from the previous stages of the selection process (Alhazmi & McCaffer 178).

Conclusion

The choice of the best procurement system is one of the most important and complex project management tasks. While old procurement systems are gradually becoming obsolete, new procurement systems are developed to meet new project management requirements in the construction industry. Whether project managers can meet clients’ needs and construction project requirements largely depends on what procurement system managers choose to use for each particular project. The proposed selection model can assist clients and project managers working in the construction industry. Unfortunately, the authors do not offer their model for the projects in industries other than construction; however, given the benefits and overall simplicity of the model, it could be potentially used in other projects.

Works Cited

Alhazmi, T. & McCaffer, R. “Project Procurement System Selection Model.” Journal of Construction Engineering and Management, May/ June (2000): 176-184. Print.

Persson, J.S. & Mathiassen, L. “A Process for Managing Risks in Distributed Teams.” IEEE Software, January/ February (2010): 20-29. Print.

[1] Persson, J.S. & Mathiassen, L. “A Process for Managing Risks in Distributed Teams.” IEEE Software, January/ February (2010): 20-29. Print.

[2] Alhazmi, T. & McCaffer, R. “Project Procurement System Selection Model.” Journal of Construction Engineering and Management, May/ June (2000): 176-184. Print.