Overview of Project Life Cycle and Risk Management
Discuss about the Risk Management for Project Life Cycle.
Project life cycle interacts with risk management to assess and manage any risk associated with development and execution of the project. Project life cycle entails four major phases or stages except for professional service projects that has five major stages. Risk management is essential at every stage of project process as it prevents or reduces any risk that may affect the project. Risk management or control plans entails stages of risk identification to risk management or control strategy. The aim of this paper is to discuss project lifecycle and risk management with an example of a hybrid passenger vehicle.
Project life cycle can be described as a combination of various phases of the project from the point of commencing to the completion. Project life, in essence, comprises of four stages of the project that is used by many project managers. Study of project life cycle is important for project risk management as it allows proper development of risk management strategy. A close understanding of project life cycle requires an understanding of the four stages of the project development (Method123 2018).
Project initiation or conceptualization refers to the first phase of project process that entails development of the project idea. This point shows the strategic importance of the project and with emphasis placed on a problem that the project solves. This first stage, therefore, allows project goals setting and the required resources for the project. This can be summarized in a statement of work, presenting the business case and creation of a business contract (Serra & Kunc 2014, pp 53–66).
The project planning phase of the project management entails planning various elements of the approved project. At this stage, the project life cycle involves the setting of the strategic plan for the project and this requires the setting of mission, vision and project purpose. Planning stage also ensures that the project objective and elaboration of risk associated with the project. Lastly, the planning phase allows determination of the project budget and required resources (Cogan 2013).
The third stage of project process is execution stage that majorly entails the actual work of the project. Within this project life cycle, the project resources and tools are coordinated to achieve the project goal. Some of the consideration at this phase is time factor of the project, budget of the project, and any risk that may require a change of strategy to prevent or manage risk. Two most important project management aspect of execution is strategic management and implementation planning (Lock & Lindsay 2013, p. 398).
The final stage of the project process is the termination phase that begins upon completion of the project. Termination or closure of the project process entails various activities and these include disbanding of the project team, project assets and tools may be reallocated to other projects or duties, releasing resources that were used in the project and last the project is handed over to the intended management or users. At the termination stage, the project manager determines the need for project report and any other artifacts that may have been collected archive (Serra & Kunc 2014, pp 53–66).
Project Life Cycle Phases
Professional service project life cycle is a new project life cycle that entails those projects that majorly involves services delivery. The professional service life cycle differs from project life cycle since service has a different approach as compared to standard project life cycle. The service project has five stages that include selling, planning, deliver, account and bill and analyze phase. Firstly, sell phase of service project involves service demand by the customer and entails thinking forward especially on factors that may affect service delivery (Life Cycle Engineering 2018). Secondly, plan phase includes allocation of resources and service providers within the project. Thirdly, deliver phase that is the service delivery of the service to customers and this phase has three aspects such as execution, completing task and risk management. Fourthly, account and bills phase ensures that the project team keeps track of revenue and financial opportunity for the project. Lastly, the phase includes analysis of data and forecasting future service performance (Picariello 2015).
Project life cycle has vast implication on the effective risk management. The implication of project life cycle on the effective risk management can be divided into risk assessment, risk mitigation, and contingency plan.
Firstly, project life cycle provides the basis for effective identification of risk with the project management. Project life cycle offers the framework for identification of challenges that may act as risk management. In addition, the project life cycle gives an avenue to foresee various risk that is associated with the project since the project life enable assessment of the risk with the view to reduce the likelihood of those risk occurring (Cogan 2013).
Secondly, the project life cycle gives the basis of risk management process. According to Haimes (2009), project life cycle offers an opportunity for systematic understanding of the risk from definition to management. This implies that risk management process relies on the project life cycle for effective risk management. This contradicts the notion that that risk management should focus on each stage of project life cycle since it gives a view of the whole project lifecycle.
The project life cycle involves various risk mitigation that is used to determine the risk at different stages. The risk management strategy may include avoidance, risk transfer, risk reduction and risk sharing. The risk mitigation strategy enables the project management team to applies risk management to prevent any risk that may come along in the course of implementation of the risk. Risk mitigation may involve collaboration with the project team to minimize risk. In addition, the project team can also transfer part of the project to another stakeholder as risk transfer strategy which is a risk mitigation strategy (Project-Management-Skills.com 2018).
The project life cycle gives the risk contingency plan strategy that can be used to prevent risk. The project life cycle forms the basis of prevention and addressing these risks before they affect the project. After predicting the risk based on the project life cycle, risk can be addressed at an early stage before actual occurrence. Moreover, the risk management process is developed based on the framework of project life cycle. Assessment of risk allows development of risk prevention and this is important for effective risk management (Hubbard 2009, p.46).
Professional Service Project Life Cycle
The process of designing hybrid passenger vehicle involves many different risks. And some of these risks include health risk on developers, environmental risks, and economic risk. The design and development of hybrid passenger vehicles present health risk that may affect not only the developers but also end user or consumer (Pound, Bell & Spearman 2014). These risks are associated with the electromagnetic fields created due to the dual nature of the vehicle power system. In addition, the designing of the vehicle presents an environmental risk that needs to be identified and risk management developed to prevent this risk being passed to end user. The environmental risk may be due to a battery that impacts on the environment and any other risk associated with pollutions (Matt 2015). Lastly, the economic risks are some other risk that is most likely associated with the development and used of the hybrid vehicle. The economic risks can be felt on the developers’ side and the end user side (Lock & Lindsay 2013, p. 398).
Design and development of hybrid passenger vehicle require the development of risk that is present in every project life cycle. Risk management plan for the designing and development of hybrid passenger vehicle include risk assessment and identification, risk analysis, and risk management strategies.
Risk assessment and identification is the process where those risks that are most likely to affect the vehicle development project. At this stage of the risk management, those three risks are analyzed and risk identified with the intention to manage or control those risks. Various project aspects such as health risk and impact of the economic cost of the development of the firm are assessed and risk identified (Hass 2010).
The impact of risk is assessed and the overall implications of the risk in the project are determined. The project team does the analysis of the project at every stage to reduce the impact of these risks on the production of hybrid vehicles (Mesly 2017, pp 546).
The final stage of the risk management or control plan is based on the management team ability to develop management strategies. There are many different risk management or control strategies to help prevent risks. Some of these include risk control, risk avoidance, risk share and risk transfer. Firstly, risk control or mitigation are strategies that are used to control those risk in every stage of development. Secondly, risk share involves bringing other stakeholders in the process to share the cost of risk. Thirdly, risk avoidance strategy involves avoiding avenues that are most likely to cost risk to the development project. Fourthly, risk transfer strategy is another risk management strategy that allows transferring part of the vehicle development process to other departments to prevent risk occurring within that department (Motavalli 2008).
Risk management strategy has direct and indirect implications on the design team since the team is part of the implication of the plan. Firstly, risk controls enable design team becomes conscious of the likelihood of the risk occurring. Some risk control strategies such risk avoidance makes the project team aware of the risk and avoid causal factors for those risk. Secondly, risk control measures such as risk transfer strategy can make the design team be splinted since some part of the project may be transferred to another department within the vehicle production line. Lastly, the risk control or management plan make design team takes control of the design process since it offers the team opportunity to foresee design and development process and risks (Hopp & Spearman 2011, pp. 289).
Conclusion
In conclusion, the project lifecycle and risk management interact at every stage of project or service. There are four different stages of standard project life cycle as compared to five stages of service project life cycle. Risk management takes a course of every stage of project life cycle and requires proper risk management plan. Project life cycle has an impact on the effective risk management in the project process. As a designer and developer of a hybrid passenger vehicle, three major risks are environmental risks, health risks, and economic risk. Risk control plan is divided into risk identification, risk impact analysis and risk management strategies with high impact on the design team.
References
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