Risk Identification and Evaluation Processes

1.
Discuss Risk Identification and Evaluation Processes
Risk Identification can be an extremely daunting and tedious task. With all of the
potential risks involved with IT projects, the potential for such risks is greatly increased.
With that said, some of the categories of potential risks include “technical, cost, schedule,
client, contractual, weather, financial, political, environmental and people” (Saylor
Academy, 2012). By crafting a checklist for possible risks is a more disciplined approach
to evaluating the potential that certain events may occur during certain projects (Saylor
Academy, 2012). However, it is important to note that this checklist can assist project
managers, as well as the project team in identifying risks associated with the project and
possibly even bring about a discussion regarding risk input from team members as well.
Furthermore, the team’s past performance and experience, experience with the company,
and even “experts in the industry can be valuable sources for identifying potential risks
on a project” (Saylor Academy, 2012). However, creating a risk breakdown structure,
versus a work breakdown structure can assist in organizing such risks into categories, as
previously discussed.
With that said, after the risk identification process is complete, then the risk
evaluation process takes place. This is the point in which the project team evaluates each
risk using a rating scale to help determine the potential for each risk to discern which
risks are more probable to occur during the project versus those with the least potential of
occurring (Saylor Academy, 2012). Furthermore, the purpose of carrying out the risk
evaluation process is to determine not only the potential cost for each identified risk, but
also to help the project manager and the team understand which potential risks have the
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highest and lowest potential to arise during a particular project (Saylor Academy, 2012).
Additionally, the risk evaluation process also assists in determining which risks have the
greatest potential to cause the most problems and have the highest potential for a negative
impact on the project.
2. Discuss three ways to mitigate Risks in a Project
Risk mitigation plans are established in order to craft a plan that would decrease
the potential impact on an organization in the event that an unexpected risk arises, as well
as those risks already identified. While there are ways of mitigating risks in a project,
three of which include risk avoidance, risk reduction, and risk transfer (Saylor Academy,
2012). Risk avoidance encompasses the development of alternative strategies that have
higher potential for success, although this will usually increase the overall cost of the
project (Saylor Academy, 2012). The most common way to avoid risks is to use tools and
vendors with a proven track record of success and optimal performance. In addition to
drug testing team members to ensure no one is under the influence of drugs (Saylor
Academy, 2012).
Meanwhile, one of the most important risk reduction practices is to hire experts
that are equipped and skilled to “manage high-risk activities” since they are often able to
make predictions concerning future problems that may have a negative impact on the
project (Saylor Academy, 2012). Risk transfer, on the other hand, is a “risk reduction
method that shifts the risk from the project to another party” (Saylor Academy, 2012).
With that said, risk transfer would come in handy in the event of weather disasters, labor
strikes, and even political unrest (Saylor Academy, 2012). Since all of these events are
unpredictable and the team has no control over such potential events, it is important to
consider risk transfer, especially in the event of say, a tornado, in which the risk would
then be transferred to the insurance company.
3. External Complexity and Internal complexity risk profiles
External complexity risk profiles contain the projects that rank high on the risk
score and are much “larger and longer than usual for the project management group and
the project manager” to handle (Saylor Academy, 2012). This goes without mentioning
the lack of resources available. Considering the lack of the team’s experience in dealing
with highly complex risks and larger projects than the team is used to working on, there is
even more potential for significant risks to be overlooked due to the inadequate
experience and thus causing more potential for project failure.
Internal complexity risk profiles, on the other hand, refer to the projects with high
scores as well, only for internal complexity versus external complexity (Saylor Academy,
2012). These complexities, however, include elements that are internal to the project,
such as “risks to the budget, schedule, and quality” due to the organization’s complexity,
as well as possible changes to the scope of the project as a result of “lack of clarity in
project and scope statements” (Saylor Academy, 2012). Essentially, high scores for the
external complexity implicate “high risks to the schedule, budget, and quality” as a result
of limited resources and/or other unknown factors, while internal complexity high scores
imply the same risks to the same elements, only due to the complexity of the organization
and/or “changes to the scope” as previously discussed.
References
Saylor Academy. (2012). Project Management from Simple to Complex. Retrieved from
https://apus.intelluslearning.com/lti/#/document/44163004/1/34539a6d0ff5633418e6855a
7ee817a1/9d6923b30764c63caf26d67c25a0cf03/browse_published_content/11534/48945
/92189/3/lesson/lesson?
hideClose=false&tagId=65146&external_course_id=411639&external_course_name=IT
MG624%20I001%20Sum%2019
Hello James,
Once again you provided another thorough and informative post, which is much
appreciated. You did a great job explaining risk identification and evaluation processes, as well as
methods of risk mitigation, and external versus internal complexity risk profiles. While each of these
elements are critical components to project management, if the risks are not identified appropriately
then the project team will likely encounter unforeseen risks during the project's lifecycle (which could
potentially lead to the project being terminated). With that said, without identifying all potential risks
from each category including "technical, cost, schedule, client, contractual, weather, financial,
political, environmental, and people," then the risk evaluation and mitigation processes are virtually
impossible to carry out (Saylor Academy, 2012). However, once all the risks have been identified
then they must be evaluated in such a way that they are ranked based on the level of severity of
impact on the project, on a scale from low to high or some other type of scaling system. Then, at this
point, the risk mitigation strategy must be crafted. Great work again this week!
Shawn
References
Hello Kevin,
Once again you provided a very thorough and informative post on this week's topic of risk
identification and evaluation processes, as well as methods of risk mitigation, and external versus
internal complexity risk profiles. I would like to focus on risk identification because without properly
identifying risks, then evaluating and mitigating them would be virtually impossible. Risk identification
is an extremely important and complex process. In fact, there are so many potential risks that they
have their own categories. The potential risk categories include "technical, cost, schedule, client,
contractual, weather, financial, political, environmental, and people" (Saylor Academy, 2012).
However, there are countless risks that could potentially fall into each of these categories. For
instance, the people category is one of the highest risk potential due to the fact that all it takes is for
an employee to click and email on the company netowrk and spread a virus throughout the entire
system. However, there are many others that fall into the other various categories as well. Great
work.
Shawn
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1.

Discuss Risk Identification and Evaluation Processes

client, contractual, weather, financial, political, environmental and people” (Saylor

on a project” (Saylor Academy, 2012). However, creating a risk breakdown structure,

impact on the project.

2. Discuss three ways to mitigate Risks in a Project

then be transferred to the insurance company.

3. External Complexity and Internal complexity risk profiles

experience and thus causing more potential for project failure.

and/or “changes to the scope” as previously discussed.

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