Team 1_ Risk Management Plan_NEW
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Harrisburg University of Science and Technology *
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530
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Information Systems
Date
Feb 20, 2024
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JAD RISK MANAGEMENT PLAN
Version Number: 1.0
Version Date: <07/10/2022>
[Insert appropriate disclaimer(s)]
JAD Hotels, Employee recognition and Reward Project
Project Description
JAD is a global hotel chain headquartered in Harrisburg, Philadelphia. Whit more than 200 hotels, the
brand is one of the world’s major luxury hotels and resorts. Everybody knows that the soul of these hotels
and resorts are the people who work there the attention. However, this chain headquartered in
Philadelphia is in the middle of a crisis. They have an extremely basic reward and recognition program for
its employees which is impacting negatively on the employee’s mood and motivation. The goal of this
project is developing the New Reward and Recognition program to help to retain talent, reduce employee
turnover and motivate the staff as well in JAD Hotels.
VERSION HISTORY
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TABLE OF CONTENTS
1.0
INTRODUCTION
....................................................................................................
3
1.1
Purpose Of The Risk Management Plan
.............................................................
3
2.0
RISK MANAGEMENT PROCEDURE
....................................................................
3
2.1
Process
.....................................................................................................................
3
2.2
ROLES AND RESPONSIBILITIES
.......................................................................
5
2.3
Risk Identification
....................................................................................................
6
2.3.1
Methods for Risk Identification
.........................................................................
6
2.4
Risk Analysis
............................................................................................................
6
2.4.1
Qualitative Risk Analysis
...................................................................................
7
2.4.2
Quantitative Risk Analysis
................................................................................
8
2.5
Risk Response Planning
........................................................................................
9
2.6
Risk Monitoring, Controlling, And Reporting
.......................................................
9
2.7
Risk Contingency Budgeting
...............................................................................
10
3.0
TOOLS AND PRACTICES
...................................................................................
11
4.0
CLOSING A RISK
................................................................................................
11
5.0
LESSONS LEARNED
..........................................................................................
12
APPENDIX A: RISK MANAGEMENT PLAN APPROVAL
..................................................
13
APPENDIX B: REFERENCES
.................................................................................................
14
APPENDIX C: KEY TERMS
.....................................................................................................
15
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1.0 INTRODUCTION
1.1
PURPOSE OF THE RISK MANAGEMENT PLAN The main purpose of the risk management plan is to define all the risks associated with
the New Reward and Recognition program to help to retain talent, reduce employee
turnover and motivate the staff as well in JAD Hotels without major impact on the
organization. This Risk Management Plan details the process which was used. How it was identified
and analyzed quantitative and qualitative. Also, this document describes how it was
managed the principal risks to apply to this new program and the way to mitigate threats
and opportunities. Likewise, guidelines to minimize the risks through monitoring
controlling, and reporting them to know their status
Our aim is creating a solid process to apply this new program and achieve a successful
transition from the current program to the new one.
2.0 RISK MANAGEMENT PROCEDURE
2.1
PROCESS The process is divided into two phases such as:
1.
Framework review and 2.
Risk Management in action. To develop the first phase of this risk management plan we must check the framework
was created previously to this plan. To do this we need:
Firstly, we must review the roles and responsibilities associated with this project and
check if we identified all the key players in the project to continue with the risk
management plan. In second place, we must review the scope for this new reward and
recognition program to ensure that we do not have any gaps or misunderstanding
between the expectations of our stakeholders, sponsors, and project team.
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Also, we must review the WBS (Work Breakdown Structure) to ensure that project was
divided into smaller parts, and that we are ready to understand it. Just like that we can
identify the risks in our phase number two.
Additionally, we must check the schedule for this new reward and recognition program
with focus on the critical path to consider All this first stage will allow us to know and set the risk appetite for this project.
Then, we must complete the second phase called Risk management in action based on
six elements:
Risk Identification
, to complete this point we are going to make a brainstorming
session to identify all the potential risks and discuss a subject to form solutions. The
main objective is to allow every team member to speak and practice their critical
thinking skills. Additionally, we are going to complete stakeholders’ interviews and root
cause analysis. Just like that, the team can learn what concerns the investors as an
outsider’s perspective and how to address it.
Risk Analysis
(Qualitative and Quantitative), this will help us to pay attention and
identify what measures should be taken. Also, we can understand of the uncertainties
associated with the project. Using a descriptive scale to measure the impact as well as
the probability of occurrence of risks. On the other hand, we will apply statistical tools as
well as objective numerical values will help in determining the probability and impact in
the event of occurrence of risks identified.
Risk Response Planning
, we prepared a table which contain responsible for each risk
and their respective deadline. Additionally, we included progress status and their
progress in relation to the plan to ensure the project remains on schedule and within
budget.
Risk Monitoring, Controlling, and Reporting
, to complete this point we have
developed a risk register to track the project’s risk status. Through this we can ensure
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that we do not miss the essential risks throughout the lifecycle of this project. Minimizing
the threats that we identified at the beginning.
Risk Contingency Budget
, we developed this item for each individual risk by
multiplying the risk probability (%) by the financial cost impact ($) of each risk. Through
this method we can calculated how much money we need to reserve to each individual
risk and consider the result on our budget.
Define Closing Processes
, we are going to confirm the closure with the project
manager and approval from the project sponsor. Additionally, we define the
documentation that we need to formally close the project. At this point we will need
signatures of the Risk Owner, Project manager, relevant stakeholder, and project
sponsor in case if it necessary. 2.2
ROLES AND RESPONSIBILITIES Role
Responsibilities
Project Manager
Develop project plans and ensure the on-time project
delivery
Lead project team and fulfill project goals
Establish project schedules and monitor the project
process
Project Sponsor
Appoint the project manager and the team
Define success criteria
Ensure the successful delivery of the project and
support needed from the IT team
Executive Sponsor
Oversee the business strategy
Supervise project manager of meeting the project
deadlines
Project Coordinator
Communicate with various departments to keep
everyone full visibility of any changes to the project
plan
Endure the schedule, budget, and details of a given
task are well organized
Project Member
Complete assigned tasks under project manager’s
supervision
Support project manager through the whole process
Identify project risks during the project and remind
project manager
2.3
RISK IDENTIFICATION Risk is defined as an uncertain event or condition that, if it occurs, has a positive or
negative effect on a project’s objective. The risk that may impact the project’s objective
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negatively is classified as a threat. The risk that may impact the project’s objective
positively is classified as an opportunity. Everyone in the project team will be responsible for identifying risks. After the first formal
brainstorming session to identify risks, the project manager will assign the risk owner of
each major risk. The coordinator will document all the information and discussions to
ensure that everyone will be on the same page and be clear about the ownership.
Information will be used to identify project risks:
Government agencies
Relevant laws and policies
Operational environment information
Financing & Cost estimates
Activity duration estimates
Technical information requirements
Network diagram
2.3.1 Methods for Risk Identification
The following methods will be used to assist in the identification of risks associated with
JAD Hotels, Reward and Recognition Project.
Brainstorming: It allows us to gather team members in the brainstorming session to
think about potential risks and discuss a subject to form solutions to any
identified risks. This method is an effective way to allow every team member to
speak and practice their critical thinking skills.
Stakeholder interviews: Interviewing stakeholders who have an interest in the
project and the business can help in better understanding what they believe are
the biggest risks. This method can help the team learn what concerns the
investors as an outsider’s perspective and how to address it.
Root cause analysis: This method is an investigation of risks of previous projects
and how they relate to one another as well as the current project. It can allow the
team to identify common challenges in the project and minimize them for higher
project efficiency.
2.4
RISK ANALYSIS In analysis of risk for this project, qualitative and quantitative risk analysis methods shall
be used. This will help in assessing and isolating the most difficult work early so that
appropriate attention and measures can be taken. These techniques will help the project
manager and the team to get an understanding of the uncertainties associated with the
project. Qualitative analysis will make use of descriptive scale to measure the impact as
well as the probability of occurrence of risks. On the other hand, Quantitative analysis
through statistical tools as well as objective numerical values will help in determining the
probability and impact in the event of occurrence of risks identified. Risks found to have
a combination of high probability of occurrence and huge impact on scope, budget, and
schedule than the accepted levels will be prioritized for immediate attention in the order
of importance.
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2.4.1
Qualitative Risk Analysis Qualitative analysis will be used develop a likert scale with ratings that are
intended to measure the likelihood of occurrence of risks and potential impact of
the occurrence of these risks. The impact on budget will be estimated in
percentages with the highest impact being costs that span beyond 20% of the
overall project budget. On the other hand, schedule will be estimated in weeks with
the highest impact being represented schedule overruns greater than 4 weeks.
This analysis will be conducted by a project member, but the results of the analysis
will be assessed by the project manager. Risks whose combination of probability
and impact rating shows very likely and high respectively i.e., risks with probability
rating score of 50% and above as well as schedule overrun rating of above 4
weeks will be prioritized for response. All schedule and budget risks with schedule
overruns of up to 2 weeks and 5% of total project budget will be recommended for
a response plan while all the schedule and budget risks below these ratings will be
deemed not qualified for a response plan. Probability
To assess the probability of occurrence of the risks, the following five-point Likert
scale will be used. Risks that are least likely to occur will be rated as ‘very low’,
while those less likely to occur will be rated ‘Low’ and those are likely to occur
‘Moderate’ yet those highly likely to occur rate ‘High’ and those that are deemed
most likely to occur rated ‘Very Likely’. Rating
Rating Very Low
A
Low
B
Moderate
C
High
D
Very Likely
E
Impact
Impact will be assessed against the five-point Likert scale outlined above. Impact
on budget will be assessed in terms of percentage of total project budget while
schedule overruns will be assessed in terms of weeks as shown below.
Rating
Impact Schedule Cost PMGT 530 Risk Management Plan
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A
Very Low
No change
No change B
Low
< 1 week < 5% budget increase
C
Moderate
> 1 week >5% budget increase
D
High
> 2 weeks
> 8% budget increase E
Very Likely
> 4 weeks > 15 % budget increase
2.4.2 Quantitative Risk Analysis Quantitative analysis will be used to provide an empirical foundation necessary for
further probability and impact assessment. This will definitely make use of
historical data available on similar projects. Besides exploiting expert knowledge
on such analyses this project will utilize computer modeling in calculating an
improving the quality of probabilities computed. As such, the project can also take
advantage of capabilities such as trend analysis of probabilities to assess the
overall risk of the project beside those of individual risks. Where there are a small
number of outcomes possible, risks associated with these options and their impact
on cost and schedule will be determined through decision trees technique. Based
on the outcomes of such calculations the project manager will make decisions on
how to proceed with either response or contingency plans.
As mentioned earlier, this project shall make use of knowledgeable experts in
statistics in conducting data analysis and computing the relevant estimates on both
risks and impact. Risks with probability above 20% and similar impact figure on schedule and
budget, will automatically qualify for risk response, while those below 10% will
attract response planning and those below 10% will not require any response
planning. Those above 40% and 20% of the budget and schedule will call for a
contingency plan.
2.5
RISK RESPONSE PLANNING Prepare a risk response plan table containing who will be assigned risks and set a date
baseline. The actual progress in relation to the plan can be used once the risk has
occurred to ensure the project remains on schedule and within budget. To prioritize the list of risks, the cost-effectiveness and realistic factors should be
considered, and most importantly, everyone involved in the project, especially
stakeholders, must agree on the risk assessment. PMGT 530 Risk Management Plan
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Risk response approaches include mitigating, avoiding, transferring, accepting
passively, accepting actively, and escalating a risk. Risk Name
Prioritize
Title (Assigned to)
Approach
Date
A
Head, IT Infrastructure B
Director, Human Resources C
Head, IT Infrastructure D
Project Manager E
Project Manager F
Executive
Director,
JAD
Hotels G
Project Manager H
Executive
Director,
JAD
Hotels 2.6
RISK MONITORING, CONTROLLING, AND REPORTING To stay on top of everything, a risk register should be used as a well-formed log or
tracking table to track the project’s risk status, to ensure we do not miss the essential
risks throughout the lifecycle.
Concerning risk reporting, there are two parts that should be included. One is the
present state, which informs you of what’s going on with the project now; the other is the
future state, which explains what may occur in the future. There will be a detailed
explanation of why mitigation, removal, or transfer actions are not working, and what the
next step will be.
Especially when the best approach fails, it will be recorded in a table for summary and
have a log (recording the next steps). Those who respond (risk answerers) and those
who have a role in monitoring the progress will have access.
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2.7
RISK CONTINGENCY BUDGETING The risk contingency budget is the total budget allocation for each risk and calculates
how much money we need to reserve each individual risk. The risk contingency budget
is calculated for each individual risk by multiplying the risk probability (%) by the
financial cost impact ($) of each risk. A summary of the total risk contingency budget
shall be calculated by summing up each individual risk contingency.
Follow is a sample chart of the Risk Contingency chart, where R=P*I Risk Risk
Probability
Cost Impact, $ Risk
Contingency P I P * I
A 15%
20,000 3,00
0 B 20%
40,000 8,00
0 C 15%
8,000 1,20
0 D 30%
30,000 9,00
0 E 20%
12,000 2,40
0 Total 100%
110,00
0 23,6
00
For our project, the CFO (Chief Financial Officer) of JAD and the project
accountant will have the authority to approve this expenditure. 3.0 TOOLS AND PRACTICES Tools that will be used to record and track the project risks would be the risk register,
and
project
risk
reports
with
assumption
and
issue
logs.
Practice and Techniques are recommended are subject matter experts' judgment, data
gathering via brainstorming, checklist and interviews, data analysis via root cause
analysis, Assumption and constraint analysis and SWOT (Strengths, Weaknesses,
Opportunities, and Threats) Analysis, Risk data quality assessment, Risk probability,
and impact matrix assessment. The process will first collect the data, then brainstorm among the JAD project team and
discuss it with the subject experts and then create a checklist and interview which then
can be used to survey the JAD employees. Data will be then collected and analyzed via
root cause analysis and SWOT analysis with probability and impact analysis. Such risks
shall be monitored and assessed throughout the project's life cycle.
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4.0 CLOSING A RISK The project manager and risk owner have the cooperative authority to determine the
closure of the risk by reviewing the Post assessment reports after the implementation of
the response strategies. The risk is closed after the Project team confirms the closure
with the project manager and approval from the project sponsor. The Risk closure approval will need to signature of the Risk Owner, Project manager,
relevant stakeholder, and project sponsor (Optional). The following documentation needs to be included for the approval of Risks
Pre-assessment and Investigation Records
Risk Impact statement from Risk Owner
Root-cause Investigation and report.
Post-Risk Assessment Report
The Risk is considered closed when it meets the respective criteria mentioned below.
Immediate actions were taken to reduce the impact of the risk.
Employee satisfaction is measured and up to the acceptable limit.
The planned resolution strategies are implemented as per the plan.
The Post assessment report shows the low probability of recurrence and reduced
impact on the project.
Risk Closure meetings were conducted, and steps were taken to reduce the
reoccurrence and impact.
Limited additional resources were utilized for risk resolution.
5.0 LESSONS LEARNED
Any actions that did not occur as per plan or any unexpected risk triggers are included
as the challenges faced during the project and included in the learned lessons. These challenges are identified at any point in time during the project and a
contemporaneous (timely) record is documented in the lesson Log. After every project
stage, the team including the project manager and project sponsor will conduct a
retrospective meeting to share and discuss the challenges faced and the impact caused
by them. The discussion also includes the possible plans to deal with issues. These
details are included in the learned Lesson Log FRM-XXX. Input from each functional manager is collected and compiled in the learned lessor
report regarding each challenge. When needed, first-person action reports for the
observed challenges will be included. The learned lesson reports are reviewed and
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approved by the project manager and relevant stakeholders prior to the archival of the
reports. This Learned Lesson Log and reports are stored in the shared team folders accessible
by all the team members. The project manager has the sole responsibility to maintain
and manage this folder and make sure to keep them updated. This Learned Lesson
helps future projects to take note of what needs to be concerned about and closely
monitored and what actions can be taken to make sure that unfavorable situation does
not occur.
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Appendix A: Risk Management Plan Approval The Risk Management Plan for the Employee Reward System for JAD Hotels has been
reviewed and approved by the following. The signatures below indicate the approval for
the risk management plan and associate data has been reviewed. The approval is the
joint responsibility of the list stakeholders and project sponsors.
Title
Name
Signature
Date
Document Author
Document Formatting
Review
Qiming Wang
Qiming Wang
07/10/2022
Approvers
Project Manager
Qian Yu
Qian Yu 07/10/2022
Head,
IT Infrastructure Jiss Jose
Jiss Jose
07/10/2022
Director,
Human Resources
Ruiqing Sun
Ruiqing Sun
07/10/2022
Executive Director,
JAD Hotels
Saipratap Thindi
Saipratap Thindi
07/10/2022
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APPENDIX B: REFERENCES
The following table summarizes the documents referenced in this document.
Document
Name
Description
Location
Business
Requirements Reward
system
list
of
requirements, needed to meet
the customer expectations.
JAD HOTELS\ Shared Folder (Drive C) \
Rewards System\ Requirements
RMP
(Risk
Management Plan)
– Reward System
v1.0
Risk Management Plan - https://myharrisburgu.sharepoint.com/:w:/s/
PMGT530Team62/
EfPECOn2ZJdAv0_wmWJ_1wsBqR-
K8ajCfZvN6xIPxdR4oQ?e=mbEEB7
RR
–
Reward
System v1.0
Risk Register – table of project
risks allowing to record and
manage the project risks
JAD HOTELS\ Shared Folder (Drive C) \
Rewards System\ Risk Register
Reward
System
Project Charter
Project Charter – a formal
document
describing
the
project
attributes,
project
initiation, and responsibility of
the Project Manager
JAD HOTELS\ Shared Folder (Drive C) \
Rewards System\ Project Charter
RAP – Reward
System
Risk Assessment Matrix –
assessment
template
to
measure the amount of impact
caused by each risk.
JAD HOTELS\ Shared Folder (Drive C) \
Rewards System\ Risk assessment reports
Action Reports
Past Project final Reports and
learned lesson documents to
record the past risks and their
response actions. JAD HOTELS\ Shared Folder (Drive C) \
Action Reports
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APPENDIX C: KEY TERMS Term
Definition
Risk Management Plan
A compiled document consisting of all the factors of risk management,
identification, analysis & tolerances along with their response strategies. It
describes how the risk management activities are structured and
implemented. Risk Register
Table of project risks that helps to document and manage the identified
risks within the project. Risk strategies
Responses are implemented as either preventive or responsive actions to
deal with the upcoming or occurred deviations respectively. Risk Tolerance
The level of risk is acceptable by the stakeholder before deciding the
project’s future.
Risk A Potential Uncertain event that may have either a positive or negative
impact on the project and affect the final product of the project. ROI
(Return
On
Investment)
Return on Investment. Amount of profit yield from a project after deducting
the costs incurred.
Investment
Funds are provided by the project sponsor and stakeholders to plan,
implement, and close the project.
Risk Owner
Individuals who are responsible for managing the risks with their
appropriate response strategies and ensure they are properly dealt with. Stakeholder
Personnel directly or indirectly impacted by the success/failure of the
project. Individuals or teams are affected by the occurrence of risks and
their response strategies.
Likelihood
The probability of risk occurrence. Risk Impact
The influence is caused by the occurrence of the risk. Authorization
Approval from stakeholders from specific teams or management for the
implementation of any risk actions. Risk Triggers
A condition that will eventually lead to a drastic impact on the project’s
success/ failure.
Risk
Contingency
Budgeting
The risk contingency budget is the total budget allocation for each risk and
calculates how much money we need to reserve each individual risk.
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