Strategies for managing project risks and implementation challenges

Project Management

The part one of this project discusses several challenges that can affect the success of a project. Ineffective project management and inefficient project planning are part of the top challenges of project implementation, which consequently lead to project failures if these challenges are not effectively managed. In the contemporary project environment, one of the major challenges facing project implementation is the project's risks, typically, every project carries risks and bigger projects carry more risks than smaller projects. Understanding the strategy to manage the project risks is very crucial in delivering a project that meets stakeholder's goals and objectives (PMIS, 2013). Risks are uncertain events that can cause negative effects to a project. However, it is the responsibility of the project manager to identify potential risks before the project starts, the risks such as change in project requirement or equipment malfunction can be identified before the project start, however, some risks appear as the project continues and if not properly managed, they could escalate the project costs.

Objective of this project is to provide solutions to some of the challenges facing modern projects. The study reviews the literatures to enhance a greater understanding on the strategies to arrive at effective solutions to the project's challenges.

Literature Review

This section provides different solutions to challenges facing project managers when managing projects. The study recommends solutions such as effective project planning, implementation of risk management, stakeholder's management, and effective project communication plan. These solutions when effectively implemented will assist project stakeholders to achieve their project goals and objectives.

Shelmerdine, (1989) identifies project planning as an effective method to achieve a project's success. The author argues that many projects end with failures because the project stakeholders do not integrate effective planning in the project lifecycle. Typically, planning entails a systematic procedure to achieve a business objective. Similar to other business organizations, a project requires an effective planning to achieve project success. A project planning involves a procedure of defining strategies that a project manager should follow when executing, controlling, monitoring and finishing a project. (Melton, 2009). The project manager is required to set the project goals, creating the project schedule as well as creating the project-supporting plan. Shelmerdine, (1989) argues that the work of a project manager is to identify the project objectives and break the objectives into the subset tasks. Moreover, the general manager must identify all tasks that are required to be performed for the successful completion of a project. The next step is to assign costs and timeframe to all tasks and subtasks. This strategy will assist the project manager to monitor the costs and time assigned to each tasks in the project lifecycle. Using this strategy, the project manager will be able to complete the project on budget and time, and the project manager will be able to avoid cost escalation associated to project failures.

Melton, (2009) identifies a Gantt chart as an effective tool to assign costs and time to all the project's tasks and subtasks. The Gantt chart will assist the project manager to monitor the progress of the project based on the time and costs assigned to each task. This technique will assist project manager to complete the project on costs and schedule.

Risk Management

Project risk management is very critical to achieve successful completion of a project and risk management process is an effective method to manage project risks. Typically, risk management is the processes of identifying many events that can cause project risks and devise risk response reduce these risks (Lam, 2003). The risk register is one of effective methods to manage risks. The first method in managing project risk is to use risk identification, which involves listing all the potential risks in the risk register. Typically, the project team can use technique such as brainstorming to identify all the potential problems that can cause project failures.

Risk assessment is the next step in the risk management process. Risk assessment is the process of analyzing all risks and stratifying all the risks based on their level of importance. Typically, some risks are more important than the other is and the probability of occurrence of individual risks may be higher than the other risks. One of the methods of risk analysis is to use numerical scale to list all the risks and use the scale to identify the probability of the risks to occur. (Virine, and Trumper 2007).Using the risk assessment matrix, organizations can categorize risks based on their severities to a project outcomes. As being revealed in Fig 1, the impact of risks to a project outcome are categorized as very low, low, moderate, high and very high.

Fig 1: Categorizing Risks based on its Severity

Source: Larson & Gray, (2011)

Larson & Gray, (2011) agues that the project manager can use NPV (net present value) to assess a project's cash flow risks, and the cash flow risks can be assessed using a correlation between "PERT (program evaluation and review technique) and PERT simulation can be used to review activity and project risk." (Larson & Gray, 2011 p 219). Typically, PERT is an effective tool to evaluate the project cost and schedules. Using this technique, the project manager will be able to evaluate likelihood of a project to be completed on budget, time, and resources.

Risk response is also the strategy of managing project risks, which include "avoiding, mitigating, transferring, retaining or sharing." (Larson & Gray, 2011 p 219). Mitigating risks is to reduce the adverse event of project risks. For example, the project manager can mitigate the adverse risks effects on information system project by testing the new system on smaller network before launching the entire project. Using this strategy, the project manager will be able to identify variety of project problems and come up with the solutions to the problems before launching the entire project. (Project Management Institute, 2013).

Risk avoidance is a risk management process that involves changing the entire project plan; the risk avoidance strategy can be used when the adverse effect of the risks is very high on the project outcome. In a case of a project that requires specific suppliers of materials, the project manager may change from choosing a Pakistan supplier to an Australian supplier and avoid the risks that could emanate from political unrest that could delay or disrupt the entire project.

Risk transfer could also be used to pass the risk to a third party. For example, the project manager can pass the risks to another subcontractor who accepts to implement part of the project. Using this strategy, the project manager will be able to avoid the risks because the subcontractor will be responsible to bear the risks. . Another strategy is to pass the risk to an insurance company, however, this strategy is impractical and costly because the insurance company can take the advantage of the gravity of the risks to charge high premium. (International Standards Organization, 2012). However, the project manager can decide to accept some risks because it is not feasible for a project manager to transfer the risks such as flood and earthquake to other party because the likelihood of the risks occurring is very small.

Communication Plan

The part one of the project identifies ineffective communication as one of the factors leading to a project failure. This study recommends an effective project communication plan to guide against project failure. Planning for the project communication is very critical to achieve a project success, and inadequate flow of information among stakeholders can lead to several problems such as a delay in delivering message, misinterpretation of the message and communicating the project information to a wrong person. (Larson & Gray, 2011).

A robust communication plan can go a long way to mitigate against project problems. A robust communication plan assists team members, customers as well as other stakeholders to have required information to carry out their jobs effectively. Thus, this study suggests the integration of a project communication management in the project lifecycle to guide against a project failure. Communication management is the process of ensuring timely retrieval and distribution of project information among the project's stakeholders. In the project lifecycle, the project managers spend most of their time communicating to stakeholders and team members about the project outcomes Thus, effective communication bridge the gaps among stakeholders and remove any conflict that could have emanated due to stakeholders' cultural different backgrounds. (Field, & Keller 2007).

Larson et al. (2011) argue that project communication plan is an important tool that assists the project manager to coordinate project stakeholders as well as tracking project schedule. "The essence of a project communication plan is to express what, who, how, and when information will be transmitted to project stakeholders so schedules, issues, and action items can be tracked." (Larson et al. 2011 p 19). However, effective communication method is still essential for sharing information among stakeholders. Suggested methods of project communication include:

Interactive communication: An interactive communication is the most efficient and effective method of communication to assist all participants to understand specific information about the project. Tools for carrying out the interactive communication include phone calls, instant messaging, video conferencing, and meeting.

Push communication: A push communication is a communication tool to ensure that specific recipients receive necessary information distributed, and the information is actually received and understood by the audience. Examples of push communication include memos, letters, emails, reports, voice email and faxes. (Cooks, 2002).

Pull communication: A pull communication assists the project manager to communicate information to a large number of people; however, the stakeholders may decide to receive communication at their own discretion. This type of communication method includes lessons learned from databases, e-learning, intranet sites and knowledge repositories. Generally, the stakeholders agree upon the effective communication method to use in disseminating and receiving information. (Project Management Institute, 2013). Fig 2 provides the examples of project communication strategies that a project manager can use to guide against project failures.

Fig 2: Sample Communication Plan

Discussion

The factors responsible for project failures include inefficient planning, lack of effective communication among project stakeholders and inefficient stakeholder's management. All these issues can lead to a project failure if not properly managed. (Larson et al. 2011). Planning is an effective tool that the project manager can use to prevent a project's failure and arriving at a project objective. One of the planning methodologies is to use the Gantt chart to assign costs and time to each of the project tasks. Using this strategy, the project manager will be able to manage project based on cost and time.

The stakeholder's management is also very critical in the project management because influence of the stakeholders is vey important in the project outcomes. It is the responsibility of the project manager to manage all the stakeholders to achieve the project success. Risk management is another technique identified to achieve project success. Risk management technique includes risk avoidance, risk transfer and risk response goes a long way in enhancing a project success.

The study also identifies the project communication plan as an effective method that the project manager can use to avoid a project's failure. Free flow of information among the project stakeholders and the project team will assist the project manager in reducing the project conflicts and achieving a project success.

Conclusion

The study recommends the strategies that the project manager can use to militate against a project failure. Some of the strategies include an effective communication plan, risk management plan and stakeholder management plan. Implementing this recommendation will assist the project manager to achieve a project success.

Reference

Field, M., & Keller, L. (2007). Project management. London: Thomson Learning. Heerkens,

G.R. (2002). Project Management. New York. McGraw-Hill.

International Standards Organization. (2012). ISO 21500:2012 Guidance on Project Management. Geneva, Switzerland: ISO.

Koehle, T.C. (1983). Project Planning and Management Technique. Public Administration Review, 43 ( 5): 459-466.

Lam, J. (2003. Enterprise Risk Management: From Incentives to Controls. (First edition) new York Wiley.

Larson E.W. & Gray, C.R. (2011). Project Management: the Managerial Process.(5th Edition). New York. McGraw-Hill International.

Lewis R.I. (2006) Project Management. McGraw-Hill Professional.

Melton, T. (2009). Perfect project management and planning. Process & Control Engineering (PACE). 62 (9): 42-42

PMIS (2013). Hints and Tips for Managing Projects. PMIS Consulting Limited.

Project Management Institute (2013). A Guide to the Project Management Body of Knowledge (Fifth Edition). Project Management Journal.

Project Management Institute. 2013. Organizational Project Management Maturity Model (OPM3) (Third Edition). Newtown Square, PA: PMI.

Shelmerdine, E.K. (1989). Planning For Project Management. Journal of Systems Management; 40 (1): 16.

Virine, L. And Trumper M. (2007) Project Decisions: The Art and Science. Management Concepts. Vienna, VA

Project Management Institute. (2013). Organizational Project Management Maturity Model (OPM3) (Third Edition). Newtown Square, PA: PMI.

Cooks, S. (2002). A Guide to the Project Management Body of Knowledge, PMI, 3rd Edition (PMBOK Guides)