Risk Management Plan for SkyRail construction project

Question

Stage 1A Deliverables: The major elements of Stage 1A report are (but not limited to):

• Introduction
• Objectives
• Risk Management methodology adopted
• Detailed Investigation-
  • Establish the context – internal and external
  • Risk Assessment:
    • Risk Identification
    • Risk Analysis
  • Risk Evaluation
• Risk Register

Stage 2A Deliverables: In Stage 2A, your group would have developed the Risk Management Plan and a final report combining Stage 1 and Stage 2 prepared. The major elements of a Risk Management Plan are, but not limited to:

• Executive Summary
• Table of Content
• Introduction
• Aim/Objectives
• Risk Management methodology
• Establishing the context – internal and external
• Risk Assessment – Identification, analysis and evaluation
  • Tools and techniques employed
• Risk Treatment Schedule and Plan
• Risk Action Plan
• Discussion and recommendations
• Conclusion
• Appendix – Risk Register, Stakeholder Register, Risk Matrixes etc

Answer

Executive summary: Construction industry is full of risks and hazards due to uncertain environment. It is important to ensure the safety of the employees while working on the project. The success of the projects depends upon implementing proper risk management plan. The aim o this report is to prepare an effective risk management plan for the SkyRail construction project. The report identifies the potential risks in the projects by the risk identification process. Further, risk analysis is done by three processes i.e. risk identification, risk analysis and risk evaluation. Along with this, risk treatment and action plan is given for the effective risk management process. The report also provides some recommendations for the effective management of risk process in the project.

Introduction: The concept of risk management is now used by various industries so that they can minimize the impact of risks in business. In the competitive business environment, it is very essential for the organization to implement the safety standards in the production process. In the construction industry, implementation of risk management is important for the safety of the workers. Basically, risk management is the systematic process to eliminate the potential risks during various projects (Shaikh, 2015). Various industries now aware of potential risks and they are taking significant actions to deal with them. In the construction industry, people work in the uncertain environment where projects can be complicated due to various risks. So each and every organization wants to achieve a sustainable position in the market by implementing effective risk management plan (Hillson & Murray-Webster, 2017). This report is a systematic risk management plan for the project of SkyRail. There are various risks in the construction of SkyRail so there is the of effective risk management plan to deal with those potential risks.

Objective : Key objective of the report is to implement the risk management process in the construction project of SkyRail and deal with the potential risks in various situations. In simple words, key aim of the report is use risk management procedure with effective tools and techniques. The objective of the report is discussed below:

• The analyze the specific risks and hazards in the construction projects for the project of SkyRail,
• To develop the risk management plan to deal with the potential risks,
• To develop the model within the organization so that the process of management of potential risks can be explained.

Internal and external context : In the risk management, there are two types of risks in the project of SkyRail i.e. internal and external risks. Both the risks are discussed below:

Internal risk
HR risk- SkyRail construction project can face the risks related to HR practices as effective workforce planning and conducting training session effectively is not an easy task for HR. so, risk can be related to HR factors in terms of recruitment and selection process.

External risk
Environmental risk- The SkyRail construction project has to face external risks in terms of climate change, natural disaster, water quality issue, and change in the environmental regulations. The climate change and sudden changes in weather conations can be the cause of disruption in supply of necessary resources and enhanced labor demands (Fiorino, 2010).

Risk management methodology: The risk management plan basically includes various activities or planned actions affecting the results and outcomes of the project in order to ensure the low level of impact of risk. Every project should an effective plan to manage the risk and achieve the success. The efficient risk management would allow the project team to analyze the level of risk and deal with them. The process of the risk management is given below:

The analysis of potential risks would be done with the specific period of time. The project team needs to have regular updates by the risk matrix so that risk management process can be monitored effectively. By the risk matrix, possible risks can be assessed and quantified in a effective way. The process of risk management includes:

• Identification of risk,
• Assessing the risk in project,
• Reassess the risks by controls,
• Treat the risk,
• Monitoring the risk, and
• Report the movement of the risk

Roles and responsibilities: Person managing the risk plan has some roles and responsibilities and those are as follows:

• Embed the risk statement and risk limits in to the activities of management so that risk can be managed effectively,
• Act on timely manner to manage and deal with the identified risk,
• Ensure that the employees have effective process to identify, measure, monitor and report the risk profile on continuous basis,
• Develop an appropriate risk management plan to meet the needs of the projects

Funding and timings: For the effective risk management plan, fund will be needed. The budget for proper risk management is as follows:

Risk categories: The key objective of the process of risk category analysis is to analyze the potential risks on the basis of project that can enhance, delay or degrade the progress of the projects. For the SkyRail construction project, some of the risks are strategic risks i.e. technological changes and other business risks, operational risks like fewer staff and human errors and financial changes like large amount of credit and financial loss (Hopkin, 2017).

Stakeholders’ appetite: The project must be engaged with all the stakeholders in order to ensure the risk managing activities. All the stakeholders must be considered while setting risk appetite. For this process, there are some steps:

• Obtain all the risk register for the project,
• Sort the risk in the sequence of high to low,
• Determine from stakeholders how much risk taking capacity the project has,
• Formalize the result by the risk appetite of the project

Reporting format- communication and Tracking : The process of communication and tracking of risk management plan with the key stakeholders is given below:

Risk treatment schedule and plan: Treatment of the identified risk includes various ranges of options to manage the risk in the project of SkyRail, analysis of the options and then develop and execution of these actions. For minimize the potential risks in the SkyRail construction project, it is important to implement the risk treatment schedule and plan in the effective manner (Miller & Bromiley, 2010). Risk treatment will be done in the risk register which is given in the appendix part.

Risk action plan: For eliminating the impact of potential risks on the SkyRail construction project, risk action plan is necessary to implement by the responsible team. It is analyzed that there are five major risk i.e. environmental risk, HR risk factors, Strategic risks, Operational risks and financial risks that can be harmful for the success of the project. In the appendix part, proper risk action plan for SkyRail construction project is given (Forostenko, 2014).

Discussion and recommendation : The process of the risk management is very crucial part of the successful project. In the SkyRail construction project, key risks are Environmental risk (climate change, natural disaster), HR risk factors (Hiring of personnel), Strategic risks (Technological changes and changes in the requirements), Operational risks (Fewer staff and small human errors), and Financial risks (Loss of revenue, having too much debt) and for this, the action plan is given. Based on above discussion, some recommendations can be given for the success of SkyRail construction project.

• The project management team should focus on the risk response planning for managing the risk effectively,
• The project contractor should identify various opportunities in the business and risk management plan to deal with all potential risks,
• Hr managers should conduct the training sessions for the employees so that they understand the harmful impact on the risks in the project.
• The project team should focus on enhancing risk intelligence by clearly communicate the responsibilities to the responsible team.

Conclusion: Based on the above analysis, it is observed that in the competitive business environment, it is very essential for the organization to implement the safety standards in the production process. Implementation of risk management is important for the safety of the workers. In the construction industry, people work in the uncertain environment where projects can be complicated due to various risks. So, risk management plan would be helpful in managing various potential risks in the projects. Every project should an effective plan to manage the risk and achieve the success. Further, for the risk identification, planning and survey stages will be used and risk matrix will be able to analyze the potential impact of the risk in overall construction project. Risk action plan will also be given for eliminating the impact of potential risks on the SkyRail construction project.

References : Fiorino, D. J., 2010. Citizen participation and environmental risk: A survey of institutional mechanisms. Science, Technology, & Human Values, 15(2), 226-243

Forostenko, P., 2014. Risk action plan (online). Available from: http://www.skillmaker.edu.au/risk-action-plan/ (accessed on 14th May 2018)

Hillson, D., & Murray-Webster, R., 2017. Understanding and managing risk attitude. Routledge

Hopkin, P., 2017. Fundamentals of risk management: understanding, evaluating and implementing effective risk management, Kogan Page Publishers

Miller, K. D., & Bromiley, P., 2010. Strategic risk and corporate performance: An analysis of alternative risk measures. Academy of Management Journal, 33(4), 756-779

Mustafa, D., 2014. Project Risk Management: An initiative towards opportunity management (online). Available from: http://publications.lib.chalmers.se/records/fulltext/202861/202861.pdf (accessed on 14th May 2018)

Shaikh, M. M., 2015. Risk management in construction projects. International Journal of current engineering and scientific research. 2(2). 2393?8374

Appendix
Risk Register
Risk Analysis (Risk matrix)

Risk action plan