Question

Project Risk Response

Risk responses and action steps are defined during the risk response planning phase. Here the project team must plan the actions that will be taken should any identified risk actually materialize. This is typically done for some subset of the total population of risk issues identified—most likely those that are of the highest probability and/or impact. Risks can be both negative (threats) and positive (opportunities). The possible strategies for responding to negative risks include the following: avoid, transfer, mitigate, and accept. The possible strategies for responding to positive risks include the following: exploit, enhance, share, and accept.

QUESTION

Based on the below risk register regarding the Pepsi Refresh Program

Summarize the approach for developing risk response strategies. For example, which risks should one first attempt to avoid? Should they do it based on the risk factor score (P*I) or EMV?

Describe the process to use to determine risk triggers (the event that tells someone that the risk event is imminent).

A

B

C

D

E

F

G

H

I

J

K

L

M

Risk No.

Risk Name

Risk Event Description

Risk Impact Description

Risk Type

Risk Source

Risk Trigger

Impact Score 1 to 5

Prob. Score 1 to 5

Risk Factor P*I

EMV*

Response Type

Response

1

Sales Decline

Not having the direct brand tie-in to project decreased odds of driving sales

Brand declined to quantify the project's effect on sales

Financial

Project Success

0.8

5

4

$99,099

2

Internet

Disruption of Internet services prevents idea submissions and voting

Decreases the participation level engaged in the project

Operational

Technology

0.9

5

4.5

$25,000

3

Unsatisfied Vendors

Vendor(s) may not support ideas presented by participants

Loose vendor support

Reputation

Environment

1.0

2

2

4

Nonuser-friendly website

Target audience finds the website user interface confusing

If participants find it hard to interact with the website, they may go away and never try again

Operational

Technology

0.4

4

1.6

5

Participants being treated fairly

Organizations participating in project feeling that votes are not properly/fairly being collected

Being accused can cause claims fraud out of the contest

Compliance

Reputation

0.8

2

1.6

6

Project testing produce unsatisfied results

The board is not satisfied with the results after analyzing data from the 1-year pilot

The board decides to put a halt to the program

Strategic

Project Success

0.3

5

1.5

7

Participant Behavior

There is unwanted or inappropriate behavior on website that brings negative views about the project cause

Resulting in negative influences on potential grantees and/or interested voters to support the cause

Reputation

Environment

0.3

4

1.2

8

Insufficient Resources for traditional marketing

Printing advertisements can be very costly

Resulting in not having enough people to distribute this type of advertisement

Financial

Staffing

0.6

2

1.2

9

Scattered results

The program Supports numerous organizations across various issues/geographies so ideas are all over the place.

Makes it hard to concentrate on an impact of a specific issue

Strategic

Project Success/Reputation

0.3

2

0.6

Answer 1

Project Risks: Project risks are defined as the potential risks which can have adverse impact on the project and its completion, in terms of project high timelines, project high cost, lack of project resources, non-availability of staff, lack of government support etc.

Thus all key factors which can have significant impact on the project quality, cost and lead time, are known as the risks to the project.

Process for risk identification: The project leader along with project risk manager will frame the process for risk identification in the project execution. The process will run as below

• Major Risk is lack of awareness of key project deliverables and their agreement with the senior managements.
• Risk in improper estimation/ assumptions/ simulations of the project.
• Risk in dealing with Government approval and sanctions
• Risk in cost management for the project and money disbursement to subcontractors and labors.
• Risk in management of project lead time and adherence to project timelines.
• Risk in managing the contracts with the sub-contractors and their ontime support
• Risk in managing the surprise event in the projects.

Approach for developing risk response strategies:

The following approach will be adapted for developing risk response for each risks of the project as below

• Prioritize the risks based on the prioritization criteria. The prioritization criteria will be based on the risk factor score = P*I. This can be further prioritized based on the EMV, if this information is available for all the risks.
• So in the given case the prioritization criteria will be based on the risk factor score = P*I. Because this information is available for all the risks and EMV is not available for all the risks.
• The highest priority risk will be acted/worked in the first/starting and lowest priority risk will be acted in the last/at ending time.
• Risks will be reviewed for suitability and will be acted accordingly during their order of priority.

The prioritized risks list is as below

A

B

C

D

E

F

G

H

I

J

K

L

M

Risk No.

Risk Name

Risk Event Description

Risk Impact Description

Risk Type

Risk Source

Risk Trigger

Impact Score

Prob. Score

Risk Factor

EMV*

Response Type

Response

1 to 5

1 to 5

P*I

2

Internet

Disruption of Internet services prevents idea submissions and voting

Decreases the participation level engaged in the project

Operational

Technology

0.9

5

4.5

$25,000

1

Sales Decline

Not having the direct brand tie-in to project decreased odds of driving sales

Brand declined to quantify the project's effect on sales

Financial

Project Success

0.8

5

4.0

$99,099

3

Unsatisfied Vendors

Vendor(s) may not support ideas presented by participants

Loose vendor support

Reputation

Environment

1

2

2.0

5

Participants being treated fairly

Organizations participating in project feeling that votes are not properly/fairly being collected

Being accused can cause claims fraud out of the contest

Compliance

Reputation

0.8

2

1.6

4

Nonuser-friendly website

Target audience finds the website user interface confusing

If participants find it hard to interact with the website, they may go away and never try again

Operational

Technology

0.4

4

1.6

6

Project testing produce unsatisfied results

The board is not satisfied with the results after analyzing data from the 1-year pilot

The board decides to put a halt to the program

Strategic

Project Success

0.3

5

1.5

8

Insufficient Resources for traditional marketing

Printing advertisements can be very costly

Resulting in not having enough people to distribute this type of advertisement

Financial

Staffing

0.6

2

1.2

7

Participant Behavior

There is unwanted or inappropriate behavior on website that brings negative views about the project cause

Resulting in negative influences on potential grantees and/or interested voters to support the cause

Reputation

Environment

0.3

4

1.2

9

Scattered results

The program Supports numerous organizations across various issues/geographies so ideas are all over the place.

Makes it hard to concentrate on an impact of a specific issue

Strategic

Project Success/Reputation

0.3

2

0.6

Describe the process to use to determine risk triggers: The process use to determine the risk triggers is as below

• Define the risk trigger process for the project in the organization.
• Involve the right people in the organization who will involve in risk trigger process for the project.
• The cross functional team should be formed for risk trigger process for the organization.
• The cross functional team needs to be made responsible for risk trigger identification, reporting, analyzing and initiating corrective action for risk mitigation.
• The project to be reviewed periodically to identify the project risk triggers, so that timely actions can be initiated.
• The CFT team to develop the tracker for reporting of all risk triggers of the organization.
• The CFT team needs develop the action plan and implement the solution to address the risk triggers in the organization.
• The risk trigger program / process would be run on periodically like monthly or quarterly in the organization.