Trans LAN Project Trans Systems is a small, information systems consulting firm located in Meridian, Louisiana. Trans has just been hired to design and install a local area network (LAN) for the city of Meridian’s social welfare agency. You are the manager for the project, which includes one Trans professional and two interns from a local university. You have just finished a preliminary scope statement for the project (see below). You are now brainstorming potential risks associated with the project. 1. Identify potential risks associated with this project. Try to come up with at least five different risks. 2. Use a risk assessment form similar to Figure 7.6 to analyze identified risks. 3. Develop a risk response matrix similar to Figure 7.8 to outline how you would deal with each of the risks. FIGURE 7.6 Risk Assessment Form Risk Event Likelihood Impact Detection Difficulty When Interface problems Conversion System freezing Start-up User backlash Postinstallation Hardware malfunctioning Installation FIGURE 7.8 Risk Response Matrix Risk Event Response Contingency Plan Trigger Who Is Responsible Interface problems Mitigate: Test prototype Work around until help comes Reinstall OS Not solved within 24 hours Nils System freezing Mitigate: Test prototype Still frozen after one hour Emmylou User backlash Mitigate: Prototype demonstration Increase staff support Call from top management Eddie Equipment malfunctions Mitigate: Select reliable vendor Transfer: Warranty Order replacement Jim Equipment fails Potential Risks Risk identification is the first and foremost process of risk management. Risk identification should focus not only on objectives but also the events that could cause consequences. Critical thinking is the key factor in risk identification.

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EXPERT ANSWER

  1. Risk management is an important piece to any project. Risk management is more a proactive approach than a reactive one which:
  • Reduces surprises and negative consequences
  • Project managers are prepared to take advantage of possible risks
  • Provides better control over the future
  • Improves chances of meeting project performance targets within budget and on time

The first step in identifying risks is to create a list of potential risks by brainstorming, problem analysis and risk profiling

  • Schedule Risks
    • Imposed duration dates
    • Compression of project schedules due to a shortened project duration date
  • Technical Risks
    • Networked sequence constraints in which project tasks will take place
    • Backup solutions if the technology chosen fails and if Windows systems are not available
    • Assessing how technical problems can be overcome
  • Resource Constraints
  • The absence, shortage, or unique interrelationship and interaction characteristics of resources that require a particular sequencing of project activities
  • Manpower availability of two college interns could be affected by between school session issues. i.e. grades, tuition payments, or personal issues preventing return for spring semester
  • Mardi Gras Event runs Jan 16 thru Feb 21 and could impact clients personnel’s availability for training
  • Costs Risks
    • Time/cost dependency links: costs increase when problems take longer to solve than expected.
    • Price protection risks (a rise in input costs) increase if the duration of a project is increased.
  • Funding Risks
    • Changes in the supply of funds for the project can dramatically affect the likelihood of implementation or successful completion of a project.
    • Meridian Social Services fall under the state of Louisiana and could be impacted by state budget reduction.

Risk Assessment Matrix

RISK EVENTLIKELIHOODIMPACTDETECTION DIFFICULTYWHEN
Hardware Delay453Scheduled installation date
Backup Failures344After installation users can not access old system files
Resource Constraints333Intern schedule conflicts during project installation.
Technical Malfunction of new Hardware255Occurs at installation.
Budget Cost Risk224Unplanned costs or delays create Budget overrun due to time/cost dependency
Funding255State Agency has risk of losing funding

Risk Response

RISK EVENTRESPONSECONTINGENCY PLANTRIGGERWHO IS RESPONSIBLE
Prepare design and installation of Local Area Network(LAN)Avoid: Review DesignIdentify the Critical Path and make the necessary changes to prepare for a delayBehind scheduleProject Manager
Review HardwareMitigate: Select reliable vendorTransfer: WarrantyOrder replacementMonitors not working and CPU’s not loadingTwo interns
System Performance MonitoringMitigate: Test SystemCorrect errors accordingly and work on issues until assistance is neededNot solved within 48 hoursProject Manager and Peak professional
User CriticismMitigate: Review the Peak Systems training methods for possible tweaksCreate a troubleshooting logic treeCall from DirectorProject Manager and Peak Professional