The management of risk is providing tp be one of the most difficult tasks for the project management profession. How can risk be managed effectively and who should be responsible for this task?

You are required to critically analyse the concept of risk; discuss how it can be measured and ranked and outline how a project risk management strategy may be constructed for a project of your own conception. In completing this assignment, you should address how appropriate practices can assist in minimising risk for your project.

Project risk management is gaining growing importance due to large number of projects being executed across industries. With a tight deadline and large number of resources working, slippages also become common. It is important to understand and mitigate these risks beforehand to prevent wastage of resources and time. The example chosen for this paper is an Enterprise Resource Planning (ERP) implementation project which is basically a large-scale IT solution. This type of project has been chosen since ERP implementations have a very high failure rate. According to Gartner Research, 75% of ERP project fail (Deloitte, 2016). The project management strategy suggested uses risk management tools such as Project planning according to the waterfall model, defining tasks in detail with a WBS ID and allocating resources for each task clearly so that there are no overlapping tasks. The next step is creating a risk matrix in which all the risks that the project might encounter are listed and a mitigation plan is devised too. An important strategy suggested is the constitution of a Change control board which will help in managing new changes to the original scope and prevent issues due to scope creep. Few other risk management techniques such as devising a management checklist and setting up a clear roles and responsibility matrix, COBIT data quality assessment have also been suggested to prevent milestone slippages. With these risk management tools and strategies, the project can be implemented on time and there would be a much lesser chance of failure.

Introduction

The aim of this paper is to outline the risks in project management, understand these risks in depth and come up with a strategy to manage the risks. The chosen type of project is an ERP project that would be implemented by an IT company for a customer's business. ERP or Enterprise Resource planning is an IT system which aims to tie the various business processes of an organisation together. This is achieved by making data flow seamlessly between the various departments. 

An ERP system helps to cut down redundancy of data and improves data accuracy and speed tremendously. The operations become much more robust and the overall efficiency of the operations increase. Various risk management tools and theories have formed the basis of the suggested strategy to mitigate risks and to manage the project efficiently. For instance, WBS ID (which stands for Work breakdown structure ID) has been added to the project plan. This is a unique identifier for each activity and task which helps to track each sub-task and also to identify predecessors accurately.

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