Dec1999 PM217 : Project Management (Question 4) Suggested Solutions

(a)

List and explain four steps that are recommended for the effective implementation of methods and procedures for managing complexity.

Steps involved in methods and procedures:

•Experience .People in the organisation must be encouraged to recognise and report experiences that can have a measurable impact on operations.

•Learn .When a problem has been identified,an attempt should be made to understand both its immediate and its broader implications.

•Revise .Once the full implications of the problem are understood,procedures for dealing with it now and in the future should be established.

•Promulgate .If the new insights are tucked away in a dark vault out of reach of the staff, they are useless.Clearly,they must be promulgated so that the staff is made aware of their existence.

•In each case,identification of each step should be awarded 1 mark,and relevant explanation should be awarded 1 mark.

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(b)

Risks are usually put into four categories:technical, market, financial, and human. Explain all four of these categories.

One mark should be awarded for each of the following answers (or similar):

•Technical risk comprises the risk factors associated with the development or operation of the deliverable.

•Market risk is the risk that the product or service being developed will fail in the market place.

•Financial risk is concerned with risks associated with cash flow and profitability.

•Human risk arises from the fact that the human elements associated with projects are complex,marginally predictable beings.

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(c)

Risk response planning is concerned with developing strategies to cope with risk events.Explain three strategies for coping with risk.

The following are suitable strategies:

•The development of and adherence to system standards (1 mark).

•The employment of insurance is a risk defection strategy (1 mark).

•The development of planning alternatives offers us a risk response strategy (1 mark).

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