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Deliverable Length: 2-3 pages (not including cover page or Reference page; double spaced 12-point Times New Roman font)Key Assignment DraftNow that the product and promotional decisions have been made for the new product, Michelle is concerned about the pricing of the new product and the distribution channels that will be used to make the product available to customers. She has asked you to write a 2-3 page memo outlining two different pricing strategies that MM should consider. Her voice mail message goes on to say,I want you to recommend which strategy you think should be used for the target market and why. The second part of the memo should outline a distribution plan that will make the product available to the target customers.You are ready for Michelle’s request and begin drafting the memo to her that same day.
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Running head: PROJECT RISK MANAGEMENT
Jolynn Patsy
Creating a New Software Program for a Bank – ATM Deposit
MPM344
Unit 5 – IP
5.6.18
PROJECT RISK MANAGEMENT
2
Table of Contents
Table of Contents ……………………………………………………………………………………………………………. 2
Project Outline ……………………………………………………………………………………………………………….. 3
Project Description ………………………………………………………………………………………………………. 3
Project Deliverables …………………………………………………………………………………………………….. 3
Project Methodology ……………………………………………………………………………………………………. 3
Overall Risk Management Strategy ……………………………………………………………………………….. 4
High Risk Category Levels …………………………………………………………………………………………… 4
Risk Management Justification …………………………………………………………………………………………. 5
Project Risk Identification ……………………………………………………………………………………………….. 6
Risk Register ………………………………………………………………………………………………………………. 7
Qualitative and Quantitative Risk Analysis …………………………………………………………………….. 9
Project Risk Analyses ……………………………………………………………………………………………………. 11
Quantitative Risk Analysis top 3 Risks …………………………………………………………………………. 11
Project Risk Response Strategy ………………………………………………………………………………………. 12
Project Risk Controlling ………………………………………………………………………………………………… 16
Project Risk Communications Plan …………………………………………………………………………………. 19
Memo to the Project Sponsor ………………………………………………………………………………………. 21
References ……………………………………………………………………………………………………………………. 23
PROJECT RISK MANAGEMENT
3
Project Outline
Project Description
Given that the general business environment is quickly evolving, it is imperative that individual
businesses implement strategies that will see to it that they remain relevant in the contemporary
technological environment to be specific. Banks are like the central operating units in any
economy and that is why they are to improve their processes in order to enhance customer
service. This project risk management plan seeks to address the risks that the bank is likely to
encounter in the course of automating its ATM deposit process.
The project will basically entail the installation of check and cash deposit hardware, the
validation and consolidation servers, and installation of the image transfer capabilities onto the
hardware. Lastly, there has to be proofing so that the system corrects any errors made by
customers during their deposits. The overall steps to be taken are conception, initiation, analysis,
design, construction, testing and finally deployment.
Project Deliverables
The major project deliverable is the successful automation of the ATM deposit process. Other
deliverables include creating more convenience and efficiency for the customers, and minimal to
no resistance on the part of the employees.
Project Methodology
The project will take the agile approach. This is a team based approach that is also iterative in
nature. It has been selected because it is customer focused and involves the customer in every
step of the process (Kerzner & Kerzner, 2017). As the work is being worked on and completed in
PROJECT RISK MANAGEMENT
4
phases, it is constantly reviewed by the team working on it that also include the customer. It is
advantageous because the customer develops an ownership of the project through working
directly with the team. Since it is iterative in nature, it leads to the production of a basic version
of the deliverable so that it is tested before it is developed further as per the recommendations of
the customers and the information available in the market as well (Kerzner & Kerzner, 2017).
Overall, agile is the best project methodology to be used especially in software development as is
the case for this project. Just to mention a few, its other advantages include stakeholder
engagement as has earlier been highlighted, transparency, delivery that is early and also
predictable, has room for change, the costs and schedule are predictable, there is an assurance of
improved quality, lays a special focus on the users and the value added to the business (Kerzner
& Kerzner, 2017).
Overall Risk Management Strategy
The overall risk management strategy is mitigation. This strategy involves the reduction of the
probability of risk occurrence or the minimization of the negative consequences of the risk if it
does occur (Bessis, 2015). This strategy will either be implemented through contingency
development where all the negative consequences of risks will be minimized or through risk
occurrence minimization where the chances that the risk will occur are significantly minimized.
High Risk Category Levels
Some of the high risk category levels include technology and employees. Risks that may be
brought about by technology are majorly security issues where the systems may be hacked by
malicious people with the intention of stealing money (Schwalbe, 2015). For the employees,
there may be resistance because they could be afraid of losing their jobs if the deposit process is
automated.
PROJECT RISK MANAGEMENT
5
Risk Management Justification
Every company or project team should implement a risk management plan because it helps the
project team identify the risks that the team is likely to face thus effectively implement strategies
to respond to the risks. Other justifications for the project risk management plan include the fact
that it is fiscally prudent and it ensures that the company resources are utilized well alongside
improving the company brand through an added competitive advantage. By successfully
implementing this project, the bank is certain to gain a competitive advantage over the other
people competing in the market.
PROJECT RISK MANAGEMENT
6
Project Risk Identification
Some of the risks of this project are listed below:

Technology: The bank has to implement the latest and most efficient technology and at
the same time put in place strong security measures to curb criminal and malicious
activities (Schwalbe, 2015).

Resources: It is noteworthy that the purchase or sourcing of the necessary and genuine
resources to make this project a reality is expensive. It, therefore, becomes imperative
that the company hires the best software developers to source for the best hardware on
which the software can easily be executed. This is to make sure that all the investment
that will be put in the project does not go to waste.

Employee Resistance: Once any process in an organization is automated, employees that
used to perform that job are usually laid off. Similarly, teller employees, in this case, may
resist the move to automate the deposit process which may be a challenge in the
implementation phase if not well handled at the beginning of the project.

Usability by all customers: The bank may have to promote the new process vigorously so
that the customers can adopt it. There may be cases when some customers will find it
difficult to use the ATM deposit feature which will render the whole project useless
because the main aim is to improve customer experience. Training on the part of
customers is thus an option the company can consider.

Fraud: Some of the fraudulent activities which are a threat to the successful project
implementation of this automation system may be the use of fake notes and cheques
among others.
PROJECT RISK MANAGEMENT
7
Risk Register
A risk register is one of the regulatory compliance measures that have to be put in place during
any given project management process (Kendrick & Dawsonera, 2014). It involves the
identification of all the potential risks a project is likely to be exposed to, the category to which
the risk belongs, risk description, and the potential impact the risk has on the project. The five
recognizable risks of this project are recorded in the project risk register below alongside their
descriptions and potential impact.
Risk
Category
Risk Description
Potential
Impact
on
Project
Cause
Condition
Technolog
Operation
Failure to
Proper feasibility analysis
Poor project
y
al Risk
invest in the
has to be done so that the
outcome thus
latest
most fitting technology
poor
technology.
system is used to automate
customer
the banking ATM system.
service.
Resources
Operation
Inadequate
All the project resources
Inferior
al Risk
resources
must be available at each
resources
and trained
phase of the project to avoid
may damage
staff.
compromising on quality by
the primal
using available low quality
performance
PROJECT RISK MANAGEMENT
8
resources.
of the project
output.
Employee
Operation
Lack of
Employees have to be
Failure to
Resistance
al Risk
Communica
informed and trained as well achieve
tion
in advance. Also, the
project
amount of staff has to be
objectives
correspondent to the work
within the
required to be done
stipulated
(Kendrick & Dawsonera,
time
2014).
System
Reputatio
Failure to
The Agile project
Less use by
Usability
n Risk
involve the
methodology should be
customer
customers to implemented to the later so
thus
know what
that customer satisfaction is
customer loss
is best for
achieved (Kendrick &
to other
them.
Dawsonera, 2014). The UI
competing
should be basic for all types
brands.
of individuals to be able to
easily navigate
Fraud
Financial
Inexperienc
The system developers
Significantly
Risk
ed system
should have enough
reduced
experience to install all the
company
PROJECT RISK MANAGEMENT
developers
9
needed security measures so
revenues.
that the resulting financial
risk to the project is
mitigated.
Qualitative and Quantitative Risk Analysis
Qualitative risk analysis involves establishing the chance of occurrence of a risk event and the
impact the risk may have on the overall project in the occasion that the risk event is not mitigated
or avoided (Kendrick, 2015). The qualitative risk analysis matrix is an important tool for this
project as it will enable the team leaders to know what specific risks they are to develop a
response for by categorizing their impact alongside their probability of occurrence (Kendrick,
2015).
Risk
Probability of Occurrence
Potential Impact
[1- Lowest; 5 – Highest]
[1- Lowest; 5 – Highest]
Fraud
4
5
Technology
3
4
Resources
3
4
Employee Resistance
2
4
System Usability
1
4
PROJECT RISK MANAGEMENT
10
From the qualitative and quantitative risk analysis matrix above, it can be noted that fraud has
the highest probability of occurrence and potential impact as well. This is because bank ATM
machines usually deal with cash and the chances of a criminal hiding their self as a customer is
very high. There are times when customers have robbed banks using fake identification and this
should be the first prime concern of the project team. The system being installed should be able
to safeguard against such instances. The other four risks that follow very closely in the order of
technology used resources, employee resistance, and system usability. It is also noteworthy that
all the risks have a potentially high impact thus the need to carefully ensure that they are well
taken into consideration throughout the project management process.
PROJECT RISK MANAGEMENT
11
Project Risk Analyses
The method that will be utilized to conduct a qualitative risk analysis for this project has been
established as a sensitivity analysis. This process will essentially determine the identified project
risks that have the most potential impact on the whole project management process and the
project itself (Iloiu & Csiminga, 2009). The potential project risks are evaluated on the basis of
their financial impact and then ranked to make mitigation or rather avoiding the risks much
easier through prioritization. This brings us to the conclusion that only the risks that are most
probable and have the potential to cause adverse effects on the project are considered (Iloiu &
Csiminga, 2009). The purpose of sensitivity analysis to evaluate the consequences of any
changes in the project’s key variables, to investigate whether or not any key project decisions
will be affected by any changes made, and to timely identifies all the actions that may lead to
effective mitigation of the project adverse effects (Iloiu & Csiminga, 2009).
The two major steps I will be taking while completing the sensitivity analysis are identifying the
key variables of the project, calculating the effects of the variables that are changing and lastly,
perform the analysis of the effects brought about by the differences that happen in the key
variables (Iloiu & Csiminga, 2009; pp. 34-37).
Quantitative Risk Analysis top 3 Risks
Risk
Numerical Value ($)
Fraud
200,000 and above
Technology
20,000
Resources
15,000
PROJECT RISK MANAGEMENT
12
Project Risk Response Strategy
The identification of risks during the project management process has to be followed by
strategies meant to respond to the risks in order to ensure that the risks do not end up having a
negative impact on the project outcome or even interfere with the whole project schedule. Project
managers, therefore, have to see to it that each identified risk has a response strategy in place if
the project is to deliver the desired results. According to López and Salmeron (2012), risk
response basically involves the development of strategic options and determination of actions
that will be meant to significantly reduce threats to the goals and objectives of a project while
enhancing the opportunities of the same.
There are various risk response strategies and they can be categorized into those that respond to
threats and those that respond to opportunities. For the threats, the risk response strategies are
avoidance, transfer, mitigation, and acceptance (Kendrick & Dawsonera, 2014). Under
avoidance, the cause of the risk is removed or gotten rid of. For instance, the project may be
carried out in a different way that will still achieve the project objectives. The next strategy is
transfer where another party that is willing to bear liability if the risk occurs is given the
responsibility to deal with it. As for mitigation, early measures are put in place to reduce the
impact or probability of the occurrence of a specified risk (Kendrick & Dawsonera, 2014).
The response strategies for opportunities include exploitation of the opportunity, sharing,
enhancement, and acceptance as well (Kendrick & Dawsonera, 2014). For exploitation, the
specified opportunity is identified and realized after the elimination of any uncertainty so that it
becomes definite for the opportunity to happen. The sharing strategy involves allocation of risk
ownership to another party that has the capability to increase the benefits of the opportunity if it
occurs. Enhancement involves the modification of the risk size of the risk especially if it is a
PROJECT RISK MANAGEMENT
13
positive risk so that its impact and probability are increased. The last risk response strategy is
acceptance which is applicable to both the opportunities and threats (Kendrick & Dawsonera,
2014). This strategy is applied if the other strategies cannot be productively applied to the
specific risk. Acceptance of risk means that the risk will be addressed by the project team and
manger when and if it occurs. To prepare for such an eventuality, a contingency plan has to be
developed so that the risk does not significantly impact the project in a negative manner.
The risk response strategy table below gives the response strategies for the identified risks for
this project.
Risk
Risk Response Strategy
Description of Risk Response
Fraud
Mitigate
This will include installing complex security software
that will be difficult to crack thus ensuring that the
bank’s cash is safe for withdrawal and deposit only
by the authorized customer.
Technology
Transfer and Exploit
It is best to outsource the technology supply role to a
specialized party so that the risk of technology failure
is transferred. Also, the bank will exploit the
available new technologies in the market if a
technology specialist is used thus having access to the
best customer service.
Resources
Avoid
The resources required for the whole project have to
be made __ during the project planning phase so that
PROJECT RISK MANAGEMENT
14
any instance of resource unavailability is avoided at
all costs. To be safer, the resources will be purchased
in a slightly higher quantity to cover for any outage
eventualities.
Employee
Avoid and Mitigate
Resistance
Employees are bound to resist any form of change
whether or not it is for their own good. One major
cause of this is usually misinformation or lack of
information (Armstrong & Taylor, 2014). For this
reason, this risk will be avoided by communicating to
the employees way earlier during the planning phase
(Armstrong & Taylor, 2014). Their resistance could
be mitigated by training them in other banking
operations apart from making cash deposits that will
have been overtaken by the new ATM deposit
system. This will give them an assurance of their
value in the organization even after implementation
of the new project.
System
Usability
Avoid and Mitigate
To avoid this risk, all the relevant stakeholders will
be consulted on the best interface and operating
system to use for the software part of the deposit
ATM. Customers will also be asked to give views of
their expectations regarding the new proposed system
PROJECT RISK MANAGEMENT
15
so that they are sure to embrace and put it to use
effectively.
PROJECT RISK MANAGEMENT
16
Project Risk Controlling
Risk controlling involves keeping track of the earlier identified risks during the project risk
management process, identifying any new risks, and evaluating the effectiveness of the risk
response strategies earlier put in place so that any identified errors are corrected and the
necessary changes in the response strategies are made. Risk control goes hand in hand with risk
monitoring to ensure maximum response strategy effectiveness. Risk monitoring and control
ensure that all the risk plans are executed thus reducing the probability of occurrence of the risks.
It also enables effective monitoring of any trigger conditions for any necessary contingencies.
It is important to monitor so as to establish whether or not the risk responses are implemented
according to the laid down plan so that the project assumptions validity and whether a risk
trigger has occurred are confirmed. According to Asadi (2015), the whole project planning
process has to adhere to various principles, some of which include adhering to the precautionary
time and cost for the activities classified as being uncertain, making use of effective risk
response strategies, while also controlling for any potential extra cost (p. 99). T …
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