Note: Sample below may appear distorted but all corresponding word document files contain proper formattingExcerpt from Essay:
Risk Management Plan
A&D High Tech
Introduction to the Plan
Charter, Scope, Plan, and WBS
Scope of the Risk Management Plan
102.2 Risk Management Plan Components
112.4 Expected Monetary Value Analysis
Risk Management Identification
123.1 Determine the Risks
133.2 Evaluate and Access the Risks
133.3 Qualitative and Quantitative Processes
143.4 Compare and Contrast Techniques
144.1 Major and Minor Risks for the Risk Matrix
144.2 Risk Matrix Template
Corrective Action and Monitoring
155.1 Type of Corrective Risk Management
155.2 Corrective Plan
155.3 Corrective Action for Risks
Section 6 -- Results, Conclusion, and Follow-Up
Section 7 - References
Section 1 -- Introduction
Introduction to the Plan
This project involves a company named A&D High Tech which operates within the computer products industry and sells computer products, accessories, and services to consumers and small businesses. The organizations found themselves at a bit of a crossroads due to the fact that they had yet to enter the ecommerce segment of their industry. After identifying this issue with the help of a consultant, A&D High Tech found their executive board pushing with a new dedication to entering this segment in the most expedient manner possible. They had already set the project in motion, however there busiest season for the organization was closing in fast and the company called upon its top project management talent to make recommendations to whether or not crashing the project was feasible.
The two primary objectives, from an organizational standpoint, that A&D is trying to achieve is increased sales and also improving organizational effectiveness. An online store would give the organization greater consumer exposure while simultaneously opening up new markets. With the online store connected to the organization's enterprise resource planning software (ERP) on the backend, the system will also act to reduce costs to the company while streamlining some of the key business objectives and increasing profit margins.
In designing the project, the company chose to build vs. buy an off the shelf platform. This decision was made for a variety of reasons however the main driver of the decision was undoubtedly customization. An off the shelf system would not of been able to accommodate all of the requirements. The original project closure date was projected to be completed sometime in May of the following year. However, since the executive directors are anxious to get the site up and running before their peak Christmas season they have put their top project manager on the case to determine whether crashing the schedule is possible to meet the new deadline. Since most of the programming is outsourced through a third party vendor it would seem reasonable to suspect that the schedule could be significantly reduced by simply putting more people to work on the project. However, this is not always the case; sometimes simply adding more people can actually extend the schedule rather than crashing it. This risk management plan will look at all the relevant potential project paths for the online store and make recommendations to its feasibility.
1.2 Company Background
A&D High Tech is in the pc industry and its primary business is selling computer products, accessories and services to consumers and small businesses. A&D's heritage begins in Lincoln, Nebraska, where Ted Walter, opened his first store in 1988. A&D's custom product line up was considered innovative in the beginning of its history. They were among the first organizations to enter into the personal computer industry. Walter stressed friendly customer service and this sentiment became part of the organizational culture. These values were also deeply entrenched in the culture of the mid-west where Walter had resided his entire life.
A&D's revenues stream developed at a consistent pace and approached $400 million for fiscal year 1998. A&D was a principally a regional player with over 90% of sales coming from customers in the regional areas. However, Walter has been strategically positioning the organization to be capable of distribution nationally. A&D sales were composed predominantly of sales stemming from retail outlets in shopping malls across the Midwest and via phone orders that were processed by its 50-person call center located in Lincoln.
Before the implementation of the organizations ERP system, sales orders at the call center were written on paper and then manually passed to order entry clerks. This added considerable time to order entry, caused delayed shipments and resulted in poor order accuracy. Subsequently, sales representatives repeatedly had to contact customers directly to correct errors or to suggest different options due to the limited availability of inventory. On average, about a third of the orders required customer callbacks, compared to an industry average that was presumably less than ten percent. In 1997, A&D implemented its first enterprise resource planning software.
The software provider that A&D chose was J.D. Edwards and the project was a success. Having the ERP system significantly reduced the operational costs and errors that occurred through order processing. It also reduced costs associated with operational efficiency since it reduced the need to staff people to do manual data entry. The same ERP system went through a variety of upgrades including a customer relationship manager (CRM) module. This system is the same system that will be tied to the backend of the online stores order processing. The executive leadership wanted the online order processing to be handled in a similar manner as all of the other order entry methods and this represented a top priority in the online store's project requirements.
1.3 Risk Planning
Risk is defined as an event that has a probability of occurring, and could have either a positive or negative impact to a project should that risk occur (Northrop Grumman Corporation, 2007). Project risk is one of the hardest project components to plan for; especially when the project is running on a significantly crashed schedule. In this case, the fundamental consideration to be made is whether the costs from crashing the project in such a significant manner exceed the benefits to be gained by having the project completion scheduled before the seasonal sales cycle (Christmas) ensues. Therefore if the project has a significant chance of being behind the crash schedule or if the costs are too great then the reduced schedule may not make financial sense. Additionally, there also exists a trade-off situation between quality and schedule that may pose significant threats to the viability of the finished product. The largest conceivable risk is that the project will increase its budget and resources significantly to try to meet the deadline and still fail. Thus the organization would have to bear both the costs of the project's crash schedule while in turn losing the revenue that would have been produced by the website being online during the peak season.
One study that surveyed over eight hundred IT project managers found that sixty two percent of software projects failed to meet the planned schedule (Asay, 2008). Other data cited suggests that:
49% suffered budget overruns
47% had higher-than-expected maintenance costs, and 41% failed to deliver the expected business value and ROI
Given the fact that the disciple of IT project management has had ample time to mature, the data presented indicates that several projects today still produce the same type of results that was presented when the profession was still in its infancy. Recent studies have indicated the of the PMBOK Guide's nine Knowledge Areas that risk planning is among the top that have the greatest impact upon effective project management (Zwikael, 2009).
Therefore, in this particular project, risk management may be the most important component of the entire project. It is critical that the project manager prepare a risk management plan that depicts the challenges faced with crashing the project as accurately as possible so that the project's champions can base their decision on the most reliable data possible. Accelerating the project's schedule will undoubtedly require significant increases in the budget and in the resources and thus an accurate estimate, including risks, is needed to compile an effective cost-benefit analysis in light of the new requirements. Obviously, if there is a reasonable amount of doubt that the project could be crashed feasibly then management may want to take a different course of action. The top rated risks identified in the literature are as follows (Tesch, Kloppenborg, Frolick, & Mark, 2007):
Table 1 - Risks Overview (Tesch, Kloppenborg, Frolick, & Mark, 2007)
Section 2 - Charter, Scope, Plan, and WBS
2.1 Scope of the Risk Management Plan
The scope of the risk management plan should include an analysis of all activities that could be crashed and the related costs of doing so. Not only should the costs be represented, but also the risks to the schedule and quality requirement should also be considered. Consequently, this makes for a rather complex analysis since projects can be rather dynamic in nature. Thus it is also suggested that the crash schedule include alternative scenarios that could play out. Fortunately, the previous project manager…[continue]
"Risk Management Plan A& D High Tech Introduction" (2011, August 21) Retrieved December 9, 2016, from http://www.paperdue.com/essay/risk-management-plan-a-amp-d-high-tech-introduction-51872
"Risk Management Plan A& D High Tech Introduction" 21 August 2011. Web.9 December. 2016. <http://www.paperdue.com/essay/risk-management-plan-a-amp-d-high-tech-introduction-51872>
"Risk Management Plan A& D High Tech Introduction", 21 August 2011, Accessed.9 December. 2016, http://www.paperdue.com/essay/risk-management-plan-a-amp-d-high-tech-introduction-51872
Risk Analysis Capital Budgeting Risk Analysis in Capital Budgeting Capital budgeting entails making various decisions in the management of an organization with the aim of determining expenditures on assets. In most cases, these particular expenditures are those that the management expects that their cash flow might extend within a period of about one year. Capital budgeting is a significant process in the management of an organization because it acts a control tool.
Risk Management Applications in Hospitals The concept, usage and learning of risk management phenomenon are important for all institutions in healthcare industry. The most important purpose of risk management in healthcare industry is learning from errors, it is these human errors that pave the way for us to learn prepare and not repeat these errors again. These errors can lead to a medical incident and the learning from them occurs when these
Management Development Techniques All business organizations seek to maximize the profitability using the least available resources. The bottom-line in realizing such coveted success is by making their management processes efficient. In this regard, managers will often employ various techniques in developing and improving their existing management styles. This is because new issues always would come up and have to be addressed through the necessary change management initiatives. This study will look
Management accounting is an important factor that helps organizations to map their future directions through providing managers with necessary information for the establishment of strategies that ensures all inputs, processes, and outputs are in line with the organizational goals. Through the information provided by management accounting, managers access information that is critical in formulating policy, making comparison between alternative situations, and evaluate and examine performance. While management accounting has similar
Planned Change in a Department Change within the Medical surgery department There are various factors that occasion change within any organization, some may be due to change in the operations of an organization, some due to expansion, relocation, takeovers, mergers, external forces in economies, internal changes in operation modes or even unprecedented needs as unforeseen at the initial stages. This last one seems to be case within the medical surgery unit in
The technological environment might be the most important environmental factor for organizational development going forwards. In particular, advances in communication have increased the pace at which business operates today. In addition, the increase in communication speed and intensity has resulted in the evolution of the knowledge economy. When a company's success depends almost wholly on its knowledge base, organizational development becomes critical to the company's success. This is because organizational development
Of great benefit is the accompanying activity sheets that can be easily copied for use in the classroom setting. The work also goes even further by informing users through a presentation of the most important language skills to be learnt. This is supported by an excellent bibliography and answers to the questions. This book is an excellent resource for teachers and may even be used by some students based