Risk identification involves the process of coming up with a list ofrisks that are likely to encounter a project. All the team members ina project must be involved in identifying the risks to the project.The project manager also be involved in this process. It is alsoprudent to involve the sponsors of the project in the processing ofidentifying the potential risks (Kendrick, 2009). The projectassessors are also a vital team that should be included the processof identifying the risks that the project might face. Although thecustomer has been viewed as a major stakeholder in a project, it maynot be necessary to include him in the risk identification process.Every stakeholder has some level of interest in either the executionof the end results of a project (Kendrick, 2009). Therefore, thelevel of interest that a stakeholder has in the project should beused as the criteria for selecting stakeholders to assist in riskmanagement plan.
Risk management ensures that the project team has put in placemeasures to mitigate or control risks when they occur. The otherproblems that Mulcahy is referring to may include the financial andlegal problems that are associated with the losses resulting fromrisk occurrences (Mulcahy & Diethelm, 2011). For instance, in asoftware development project, the team may outsource the softwaredevelopment process to an external firm. This reduces the risk ofrepeating the development the software if the client is dissatisfied.In instances where the client seeks legal advice, the project team isspared the problem. Risk management ensures that these other problemsare mitigated through various measures such as risk, reduction,avoidance and sharing (Mulcahy & Diethelm, 2011). Outsourcing andinsuring are the main strategies of mitigating these problems.Elimination of risks may first mean withdrawing from a project. Thiswould imply that there is no work to be done. Secondly, eliminatingrisks would imply that the work of mitigating such as risks isavoided. For instance the installation of sprinklers for mitigatingfire risks.
It is evident that risk identification may result in the realizationof both opportunities and risks. Risk management should focus onenhancing the positive effects of opportunities identified. Riskidentification could find out that there will be an increase indemand of a particular product or service in the future. Equally, theidentification process may find out that some competitors will pullout of the business in future hence reduced competition. The riskidentification team may also foresee an opportunity in the technologysector (Mulcahy & Diethelm, 2011). The development of atechnology that would reduce the cost of undertaking a particularproject is an opportunity that can be identified through riskidentification. These opportunities are vital to the success of aproject. For instance, a project to develop a software may immenselybenefit on a new technology that would enhance error elimination inthe software. An anticipation of increased demand would inform theproject team of increasing production hence reaping profits (Mulcahy& Diethelm, 2011).
It is definite that it is impractical to consider price alone whenselecting a vendor. It is evident that a vendor is vital in aproject, and also in the achievement of a project’s objectives. Thequality of the product or the service that a vendor supplies iscritical (Marchewka, 2009). It is imperative to ensure that thevendor selected supplies high quality product or service. Timemanagement is another essential factor to put in mind when selectinga vendor. The vendor must be in a position to deliver the material orservice on time if the project is to achieve its objectives. In otherwords, the reliability of the vendor must be assessed. Failure toselect a vendor who would live to the expectations and obligations ofproject can have dire consequences (Marchewka, 2009). To start with,such a vendor may slow down the pace of the project due to the latedelivery of the materials. Secondly, the vendor may cause an entireproject to collapse. For instance, when a vendor fails to deliver acritical component of a project dealing with temporary products, theproject may fail (Marchewka, 2009). More often than not, the managerof the project team is largely to blame for the failure of a vendor.It is considered that he or she is solely in charge of the entireproject.
It is essential to outsource parts of a project that must beoutsourced (McIvor, 2010). Failure to do this may result in highcosts of outsourcing than the cost that would have been incurred ifthe portion was undertaken internally. As a manager, it is paramountto assess various factors before deciding to outsource a portion of aproject. It is essential to consider the scope of the portion you areoutsourcing (Marchewka, 2009). The project team must not have thecapacity to handle the scope of the portion, either due to timeconstraints, cost or lack of expertise. It is also the role of themanager to assess the cost implications of outsourcing a particularportion of a project. Lastly, the manger must consider the capacityof the external team of completing the portion successfully and ontime (Marchewka, 2009). The manager must take responsibility if he orshe failed to outsource portions of a project properly.
Procurement management is critically essential for every project. Itenables the project manager to assess the reliability of thesupplier. It is worth noting that the actions of the supplier affectsthe performance of the entire project. The processes are essential toensure that the supplier delivers what the purchase order requested(PMI, 2013). The process involved eliminates any errors as to theproducts or services ordered. The supplier is also able to negotiatewith the project team on when to deliver the products or services.This process is well streamlined and should not be made any simpler(Bower, 2013). Failure to follow the six steps described inprocurement management may result in various misunderstandings. Forinstance, the supplier may fail to deliver products or services atthe required time since there was no agreement. Additionally, thesupplier may demand for payment prior to or immediately afterdelivering the products or services (PMI, 2013).
Mulcahy, R., & Diethelm, L. (2011). Rita Mulcahy`s pmp examprep. (7th Ed.). Minnetonka, MN: RMC Publications, Inc.Retrieved from http://www.rmcproject.com/index.aspx
Marchewka, J. (2009). Information technology project management.(3rd Ed.). Hoboken, NJ: John Wiley & Sons, Inc.
PMI. (2013). A guide to the project management body of knowledge(pmbok guide). (5th Ed.). Newtown Square, PA: Project ManagementInstitute, Inc. Retrieved from http://www.pmi.org/
Bower, D. (2013). Management of procurement. London:Thomas Telford.
McIvor, R. (2010). Global services outsourcing.Cambridge: Cambridge University Press.
Kendrick, T. (2009). Identifying and managing project risk:Essential tools for failure-proofing your project.New York: AMACON.