According to Pritchard and PMP (2014), a risk management strategy is a manuscript set by a project manager to establish and evaluate hazards and present risk management approaches. It permits the development’s managers to handle probable threats by defining the probable mitigation approaches rate. The risk management strategy elaborates on how the dangers of delayed supply and privation of technical competences linked with the project may be evaluated and achieved.
Management of risks is achieved through four techniques. They include averting, mitigating, transferring, and accepting. This signifies that risks can be averted by ignoring the proposal. If the threat is inevitable, mitigation may be applied, which lessens the threat or transfers the risks to another individual to consent on behalf of another individual. Also, ultimately accepting the risks if the first three techniques may not be avoided. Risk management entails the identification of risks and assessing the possible impacts. Identifying is often the initial step of the procedure. This is achieved by identifying the risks’ sources by risk classification. In this project, the identified risks include delayed supply of a prototype from the merchant and non-existence of technical knowledge by the salesperson.
The second phase is the assessment of risks. This step is founded on the possibility of the risk-taking place and the possible effects. Standards to establish high-quality impacts is vital in narrowing the emphasis of several threats that need mitigation. Delayed prototype delivery may ultimately result in a rise in the theoretical project’s financial plan. The danger is rated as a great prospect with significant impacts. Delayed delivery threats require a significant amount of attention and considerations that may diminish the impacts mainly if it involves unavoidable risks.
Addendum to the risk management plan
The affirmation credentials for the development are adjusted, as stated in the addendum. The initial documents and each addendum issued earlier are still valid, apart from the modification by the addendum, which is now integrated as part of the agreement. The merchant will ponder on the addendum during the planning and supply of the prototype and will identify the acknowledgment of the Addendum in the area presented in the supplied form.
Deadline for Prototype delivery
The deadline for the supply has been adjusted as documented here and amends the time limit in the initial segment of the requirements. The new supply time limit is:
Date: __________________ Time: __________________
Competent merchants are compelled to have gone through teaching to streamline the needed essential skills required. Merchants should have the fundamental expertise adequate to handle operations when the chief engineer is absent.
Failing to adhere to the set deadline will result in an eighteen percent deduction of the payment agreed between the vendor and the contract provider.
Lack of technical skills amongst the vendors will compel a third party to complete the tasks stated in the contract agreement.
END OF ADDENDUM
According to Hillson (2012), a risk is considered an indefinite event that may have a positive or negative impact. An example of a definite risk includes devising easier ways of doing something that can be beneficial if the plans succeed. Undertaking this type of risk may be viewed as an opportunity. This is because it becomes less costly if the operations are conducted swiftly. Opportunities and project success are attributed to innovations. Recognizing opportunities enhances a project manager’s ability to manage effectively instead of cautiously as a danger to the development.
According to Kliem and Ludin (2019), it is essential to incorporate a strategic change of project plan to generate opportunities. This necessitates management skills that aids in the identification of opportunities that may be implemented to advance the project economically. Management of opportunity is a mechanism that emphasizes the tangible outcomes that enhances association amongst members of a project team. Also, the procedure entails three aspects: generation of ideas, differentiating opportunities, and observing the opportunities.
Changes in the Project
The changes I may incorporate in the project is integrating more vendors in the project. To create opportunities, the number of vendors ought to increase. Integrating more vendors is considered a risk with the hopes of creating opportunities to bring the invention to the project. Alteration of the project plan may require managerial proficiency and aptitude for identifying risk impacts and probable consequences. The plan to integrate the changes will impact the project outcome, therefore making it a risk.
The opportunities brought about by the changes include reducing the operation schedule, therefore reducing the cost of operation. When project duration is extended, it may involve the use of more resources. Because the existing merchant is known for late delivery, the work may be reassigned to other vendors. This signifies less burden for the merchants and therefore guarantee the early delivery of the prototype. Early delivery denotes enhanced project completion and saving more resources.
The chances of occurrence of the opportunities are high. This is as a result of the early arrival of the prototypes. The additional vendors should meet the required standards, as stated in the addendum. This enhances project effectiveness, therefore increasing the opportunity probability. The effects of the changes will be affirmative despite the existence of several risks. The project will be deemed successful if the planned changes yield positive results and saving additional resources.
Nonetheless, there are certain risks attributed to the changes. The integration of additional merchants may mean that the wages are likely to increase. Despite money and resources being reserved, extra resources may be utilized. Besides, the level of wage increment and created opportunities vary distinctively. More resources and funding may be reserved rather than utilized. Failure of the opportunity may result in considerable losses in the project.
Conveying information regarding the plans is done officially through a review of the contract and the addendum. This will be done by attaching the addendums to the contracts to illuminate every component of the planned changes. Effective communication will result in a positive outcome for the project. The losses and justifications are generated and recorded as part of the project documentation.