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Risk Management research
The process of risk monitoring and reporting allows risk management teams as well as project management teams to device techniques that focus on the review and reduction or elimination of risks in certain environments and the life cycles of projects. These two processes of monitoring and reporting force project teams to create objectives such as identifying new risks, tracking identified risks , and utilizing historical data from past reports. The use of risk audits, trend and variance analyses, and status meetings provide these teams with applicable techniques that present accurate results after the identification of risks. The first step i.e. monitoring of risks allows risk management teams review data from past projects for frequent occurring risks and examine methods of mitigating their impacts. If historical data is not available, then review of impact and probability scales provide the team with basic information on what to look out for and research tools for handling them. The results of the are then tabulated into reports – graphical and otherwise – that are reviewed in meetings and aid in the decision process.
Risk Monitoring and Reporting Methods
In an effort to ensure the successful outcome of a project, the project team will need to provide monitoring and control of project risk on a nonstop basis. This will help to enforce the risk response plan and the action plan.
There are various procedures used to monitor and control project risks. Some of these techniques include (Risk Reviewing, 2010): risk audits, risk reassessment, technical performance measurement, variance and trend analysis, reserve analysis, and status meetings. A key component to these techniques is the risk watch list. The watch list includes a list of all identified risks, performance status, deliverable status, cost status, and schedule progress (Risk Reviewing, 2010). The progression of monitoring risks offers reassurance that the controls set in place for managing the risks are followed consistently and understood clearly. This progression allows the project team to determine whether or not the actions listed on the action plan are working accordingly, the appropriate information was provided and utilized, and lessons learned were identified for future projects.
Ideal Risk Monitoring & Reporting Formats
One top risk monitoring format is updating the risk register. The risk register is the main risk management and monitoring tool process within the project (Cooper, Grey, Raymond, & Walker, 2005). The risk register is maintained by the project manager and is intended for the reports of existing risk and new findings of risks (Cooper, Grey, Raymond, & Walker (2005). This is considered the top risk monitoring format because risk are identified, documented, monitored, registered, and determined if they are still important enough to remain on the list or be eliminated. It also helps to develop the risk action plan.
One top risk reporting format is communication. Communication is the key to meeting of the minds to discuss what is vital to the project. Communication allows the avenues of discuss to begin and continue throughout the life of the project so that all parties that are involved are knowledgeable of what is going on in the project regarding risks. Communication is performed among stakeholders, such as owners, financiers, sponsors, upper management, project managers, project teams and leaders. Communication is the key to success and therefore is considered the top risk reporting format. Another reason is communication allows the risks to be discussed thoroughly and allows the stakeholders to inform in details what the risks are and what the potential affects they may have if they occur.
Risk Audits are another form of risk monitoring and reporting because the main driving force for reviewing and monitoring the food borne pathogens that need to be dealt with in the food manufacturing process. Two of the audits performed are HACCP (Hazard Analysis Critical Control Point) and GMP (Good Manufacturing Practices). The one that is most important is the GMP audit. “In most cases, the Industry was comfortable being held to a basic GMP expectations and audit process; that is, as long as the provider of the non-food finished product or service passed a GMP audit (typically comprising sections for general cleanliness, pest control, traceability and recall, training, hygiene and safety, end manufacturing and repacking), users of these materials were satisfied to use them,” (EHA Consulting Group,(2013), p. 1). The GMP audit is performed by team members and quality personnel to make sure everyone from the prep to the packaging side is following the government rules. It is a very important part of the risk of what kind of contaminants could be in the material coming in the facility and to make sure that it does not go out with the hot dogs. Otherwise there could be a very big recall and the company would lose a large amount of money.
A second tool for monitoring risks in projects is the variance and trend analysis. This monitoring technique focuses on “the differences between expected and actual results” (PMBOK, 2010) of the treatment of risks. By comparing expected and actual results, risk management teams are able to identify and narrow down the differences in the results and examine the cause of the differences. The variance analysis factors variables such as cost, schedule and the scope (PMBOK, 2010).
The trend analysis on the other hand compares data from previous projects to current data for analysis. It is also dependent on the cost, schedule, scope, as well as the budget. Trend analysis according to the Project Management Knowledge book is “an approach that eliminates potential error by using exact calculations for accuracy. It has also proven to be the most dependable method of predicting/forecasting the impact of risks on projects (2010).
Risk reporting is a very vital part of the risk management process. It provides essential information to all stakeholders regarding potential risks. It also serves as a communication piece to keep all parties abreast of any changes to current risks and the development of any new risks. There are several types of risk reporting these are:
- Risk Profile
- Risk Treatment actions status
- Assurance coverage of key risks
- Risk management annual activity schedule and improvement Initiatives
- New and emerging risks
- Detailed risk register