Risk can be defined as uncertainty of outcome, whether positive opportunity or negative impact. Some amount of risk-taking is inevitable, whatever the project. There has to be a deliberate acceptance of some degree of risk because the value to the business makes it worthwhile. Project risk management includes the processes concerned about conducting risk management planning, identification, analysis (both qualitative and quantitative), responses, and monitoring and control on a project; most of these processes are updated throughout the project.
Risk management in projects involves identifying and assessing the risks in terms of impact and probability, establishing and maintaining a joint risk register, agreed by the integrated project team, establishing procedures for actively managing and monitoring risks throughout the project and during occupation on completion, ensuring that members of the team have the opportunity to engage in a dialogue that will promote agreement of an appropriate allocation of risk, updating risk information throughout the life of the project, ensuring control of risks by planning how risks are to be managed through the life of the project to contain them within acceptable limits, allocating responsibility for managing each risk with the party best able to do so. Management of risk is an ongoing process throughout the life of the project, as risks will be constantly changing. Risk management plans should be in place to deal quickly and effectively with risks if they arise.
Risks should be allocated to individual risk owners within the integrated project team, who should fully understand the risks for which they are responsible.… Read the rest
A feasibility study is an important tool for decision-making in project management. Accurate and adequate information about the project like technology, location, production capacity, demand, and impact on existing operations, cost and benefits to the company, time span for execution, resources needed should be included in the report. Alternatives if any should also be suggested.
Feasibility Study in Project Management can be defined as: “A tool for transforming the initial project- A tool for transforming the initial project-idea into a idea into a specific hypothesis of intervention, through the identification, the specification and the comparison of two or more alternatives directed to achieve the defined objectives, by producing a set of information helping the Project manager to take the final decision”
Market research or demand analysis, technical viability studies, financial or commercial feasibility studies are other wise known as functional or support studies to aid the decision-making. A preliminary feasibility study and the detailed project report later prepared would aid the management to appraise the project in different aspects. Project is appraised generally in the following areas. If one can remember the acronym METRE, then he can remember the various aspects of project appraisal easily. METRE stands for
- M – Management
- E – Economic viability (this includes market, commercial and financial aspects)
- T – Technical feasibility
- R – Risk and returns
- E – Environment
1. Management Appraisal
A project may be acceptable in terms of the market potential, technical feasibility, financial viability and returns. The risks associated with the project may be acceptable. … Read the rest
An issue is something that has happened and either threatens or enhances the success of a project. Issue management is the process for recording and handling any event or problem. Some of the issues can be dealt within the project. However strategic issues may require a change in order to keep the project viable. The concept of “strategic issues” has emerged as a way to identify and manage factors and forces that can significantly affect an organization’s future strategies and tactics. Project owners need to be aware of the possible and probable impacts of strategic issues. The project team leader has the primary responsibility to focus the owner’s resources to deal with project strategic issues. In a project, a strategic issue is a condition of pressure, either internal or external, that will have a significant effect on one or more factors of the project, such as its financing, design, engineering, construction, and operation.
One of the basic steps in deciding about a project is to confirm that it is driven by benefits, which support strategy. Strategic fit should be assessable from the beginning. The less clear the strategy, the more likely projects are to pass the initial screening; so there will be more projects competing for scarce resources resulting in the company losing focus and harming overall performance. In this regard the types of strategies that are implemented through project management are required to be understood.
Managing Project Strategic Issues
Project strategic issues often are nebulous, defying management in the literal sense of the word.… Read the rest
Projects have a distinct life cycle, starting with an idea and progressing through design, engineering and manufacturing or construction, through use by a project owner. Project life cycle is a collection of generally sequential project phases, whose name and number are determined by the control needs of organization or organizations involved in the project. A project phase is collection of logically related project activities usually culminating in the completion of major deliverable i.e. any measurable, tangible, verifiable outcome, result or item that must be produced to complete a project or part of project.
The project originates as an idea in someone’s mind, takes a conceptual form and eventually has enough substance that key decision-makers in the organization select the project as a means of executing elements of strategy in the organization. In practice, the project manager must learn to deal with a wide range of problems and opportunities, each in a different stage of evolution, and each having different relationships with the evolving project. Thus a project manager can effectively and efficiently plan and execute his decisions if he were able to identify these stages in the evolution of a project which is called life cycle of a project.
Read More: Project Life Cycle
A product grows through several phases in its life cycle, starting with an idea, progressing throughout production or construction and passing on to sales and distribution and through to after-sales logistic support. In the same way a project passes through the following stages:
- Develop an idea something which is something new.
… Read the rest