Addis Ababa University

Collage of Business and Economics

School of Commerce

Project management

TMA 2

Question 1: a) Projects are often completed late. Describe the techniques you would use as a project
manager to improve the accuracy and reliability of your project schedule. In responding to the
above points, be sure to: Critique project theory based on your experience and understanding. This
is important –don’t just “regurgitate” the theory Provide examples, data or other relevant
information to support your discussion. Examples can be from work experience, research, study
group experience, for example. They should demonstrate the theoretical points you are asserting
in the questions.

Understand What's Required

Start by identifying all of the work that needs to be done within the project. Use tools such as
Business Requirements Analysis, Work Breakdown Structures, Gap Analysis and Drill-Down to
help you do this in sufficient detail.

Order These Activities

list all of the activities you identified in the order in which they need to happen. At this stage, you
don't need to add in how long you think activities are going to take. However, you might want to
note any important deadlines.

Decide Who You Need to Involve

Involve the relevant project team members and expertise for the accurate estimation of the project
timeline.
b) Identify five common project risk strategies employed to address threats that your project may
face. Give an example of each.

Transfer the Risk

Risk can be transferred partly or fully from the customer to the contractor, or vice versa, using
contractual incentives, warranties, or penalties attached to project performance, cost, or schedule
measures. The contractor and customer may decide to split the risk through a contractual
agreement in which each manages the risks they can handle best. Different types of contracts split
the risks in different ways.

For example, to minimize the financial risk associated with capital cost of tooling and equipment
for production of a large, complex system on a mass scale, the manufacturer might subcontract the
production of major portions of the system to suppliers who must then assume the financial risk
of tooling and equipment. However, the prime manufacturer must now rely on many suppliers,
increasing the risks associated with managing quality control and production scheduling. Should
the manufacturer feel more capable of handling management risks than financial risks, however,
the trade-off will be accepted.

Avoid Risk

Risk can be avoided by altering the original project concept (e.g., eliminating risky activities,
minimizing system complexity, and reducing end-item quality requirements), changing
contractors, incorporating redundancies and safety procedures, and so on. Even though many risk
factors can be avoided, not all can be eliminated, especially in large, complex, or leading-edge
projects. Attempts to eliminate risk usually entail adding innumerable management controls and
monitoring systems that increase system complexity and introduce new sources of risk. Also,
avoiding risk can diminish the payoff opportunities. Research projects and innovative, new-
product development projects are inherently risky, but they offer potential for huge benefits later.
Because the potential benefit of such a project is proportionate to the size of the risk, it is better to
reduce risk to an acceptable level rather than completely avoid risk.

Reduce Risk
Among the many ways to reduce risk associated with technical performance are

 Employ the best technical team.

 Base decisions on models and simulations of key technical parameters.
 Use mature, computer-aided system engineering tools. • Use parallel development on high-
risk tasks.
 Provide the technical team with adequate incentives for success.
 Hire outside specialists for critical review and assessment of work.
 Perform extensive tests and evaluations.
 Minimize system complexity.
 Use design margins.

Accept Risk (Do Nothing)

Not all impacts are severe or fatal, and if the cost of avoiding, reducing, or transferring the risk
exceeds the benefit, then “do nothing” might be advisable. Of course, this response would not
be chosen for risks where the impacts or consequences are potentially severe.

Contingency Planning

With contingency planning you identify the risks, anticipate whatever might happen, then
prepare a detailed plan of action to cope with it. The initial project plan is followed, yet
throughout execution the risks are closely monitored. Should a problem arise as indicated by
an undesired outcome or risk symptom, then the contingency course of action can be adopted.
The contingency action can be a post-hoc remedial action to compensate for the risk impact,
an action taken in parallel to the original plan, or a preventive action initiated by preliminary
risk symptoms to mitigate the risk impact. Multiple contingency plans can be developed based
upon “what-if” analyses of possible outcomes for multiple risks.

Question 2: During the execution of a project, a risk is identified by a team member. This newly
identified risk is currently not in the Risk Register. As a Project Manager, what is the first action
you would take after being notified of the risk?

A Risk Register is a tool for documenting risks, and actions to manage each risk. The Risk
Register is essential to the successful management of risk. As risks are identified they are logged
on the register and actions are taken to respond to the risk. Risk is evident in everything we do.
When it comes to project management, understanding risk and knowing how to minimize its
impacts (or take full advantage of its opportunities) on your project are essential for success.
(Heldman, 2013. chap 6). The Risk Register is essential to the management of risk. As risks are
identified they should be logged on the register and actions should be taken to respond to the risk.

Tracking tasks is a day-to-day job for each project manager. Integrating risk tasks into that daily
routine is the easiest solution. Risk tasks may be carried out to identify or analyze risks or to
generate, select and implement responses.
So, if I got newly identified risk currently which is not in the risk register: -

 Discuss the risk with the team to ascertain the impact and probability of the risk
 Analyze the risk.
 Hold a meeting with the team leads to determine dependency and secondary risks.
 Update the Risk Register

Question 3: Case study questions: Read the case critically and answer the questions given at
the end.
a) Referring to the extract, the company reorganized to include project management in its
operations. With this in mind, justify why companies have an increased interest in project
management in recent times?

Most companies recently aware of the importance of project management due to:-

 Clearly defines the plan of the project before it begins: The importance of planning in
project management cannot be ignored. The more complex project, the more scope there
is for chaos. One of project management’s primary functions is to tame the chaos by
mapping out a clear plan of the project from beginning to end.
 Establishes an agreed schedule and plan: Schedules help to eliminate delays or overruns
and provide a plan to be followed for all those involved with the project.
 Creates a base for teamwork: People are required to work in a team on a project. This is
due to team synergy benefits through the sharing and support of knowledge and skills.
 Bringing people together in this way inspires team members to collaborate on a successful
project.
 Resources are maximized: Both human and financial resources tend to be expensive.
Project tracking and project risk management ensure that all resources are used efficiently
and are accounted for economically.
 Helps to manage integration: Projects that are completed within an organisation are
generally integrated with wider business processes and systems. Integration forms the
value aspect of projects and their management.
 Helps to keep control of costs: Depending on the scope of the project, some projects can
incur organisations significant costs. It is important therefore to keep on budget and to
control spending. Project management greatly reduces the risk of budget overruns.
 Helps to manage change: Today, more than ever, change is something which all
organisations face. Projects, during their running, also face changes and must be prepared
to face such deviations from the original plan. Project management allows for effective
change management and makes it less of a complex task.
 Quality is continuously managed: More so than ever, it is important to produce quality
results. Project management helps to identify, manage and control quality. Quality results
make clients happy, which is a win-win situation for all involved.
 Knowledge: The more projects a business undertakes, the more knowledge it will acquire
over time. This will serve as an asset to any business and project management helps to
capture and retain knowledge.
 Creates an opportunity for learning: Sometimes, projects work out perfectly and other
times, project fail miserably. Either way, much can be learned from previous experience
and past mistakes can be avoided in the future. Project management ensures that these
lessons are learned and applied in the future.

b. Over time, the IBM PMCOE has driven the transformation and integration of project
management into the fabric of the organization”. Evident from this assertion is that this
company has and continues to align projects to its strategy.

i. Discuss (in a paragraph) the importance of aligning projects to strategy (2.5 pts)
It is important for organizations to focus aligning their business strategy and project to create
successful direction for both projects and strategy. This alignment is challenging due to the
business strategy goals are not clear or well-communicated between the business strategy and the
project management or consistent with the project management actions. One of the major tasks of
effective project management process is to understand the alignment. To understand the alignment,
large projects need to be executed within formulated strategy’s implementation and with the
involvement of project managers and not only managers at high management levels.

Aligning projects with strategy has both intangible and tangible benefits for the organizations

the tangible benefits the organizations:

1. Saved money and resources

2. Increased profitability
3. Retained customers
4. Increased market share

Among the intangible benefits, the organizations:

1. Attained strategic goals

2. Improved corporate culture
3. Innovated
4. Improved quality of life of their community

ii) Justify with real life examples why the project manager should understand the strategic
position of the firm. (2.5 pts)

Project Managers must have full comprehension of the bigger picture of an organization Business
Strategy and its functional level game plan. This would help them with project operational level
decision making as well alignment of projects alignment with corporate mission.