Altex Corporation 434p6m

ALTEX CORPORATION Risk Management Case Study

1. Why was a risk management plan considered unnecessary? The risk management plan was not required as a condition in the contract, there is also a possibility that if a multitude of risks will be exposed, the Army might cancel the project. Furthermore, they thought when they develop risk management plan they may become pessimistic. According to the contract at that time did not require that a risk management plan be developed while according to the sponsor the risk management plan was not necessary becausemost of the new weapon systems requirements are established by military personnel who have no sense of reality about what it takes to develop a weapon system based on technology which does not even exist yet. According to Kerzner, in the earlier days of the project management on many commercial programs, the majority of project decision favored cost and schedule. This was because we knew more about cost and scheduling than we did in technical risk. But on the other hand, it is essential that programs define and implement appropriate risk management and contingency plans enhance project management effectiveness and provide program managers a key tool to reduce lifecycle cost. (Kerzner, 2009).

2. Should risk management planning be performed in the proposal stage or after the contract award assuming that it must be done?

Risk management plan is not a separate function but part of the over all process of planning and management. It starts with the time of planning to define scope and processes to identify, assess and manage risks that could impact the project, it should be developed early in the program from the very beginning and it should continually be addressed through the program. As I see, there are much more in depth risk plan to be developed after the contract has been awarded to specific company (Kerzner, 2009).

3. Does the customer have the right to expect the contractor to perform risk analysis and develop a risk management plan if it is not called out as part of the contractual statement of work? • Yes, the customer have the right to expect the contractor to perform risk analysis and develop a risk management plan as part of the project planning. in addition, the customer cannot force the contractor to implement if it is not written in the contract. the customer expect the contractor is expert who knows what needs to be done in any project which is a reason for hiring him to do the required job. According to Kerzner, risk management require early and continual involvement of all of the program team as well as outside helps as appropriate.

4. Would Altex have been more interested in developing a risk management plan if the project were funded entirely from within?

Altex would prefer to perform risk management plan if it were funded from within. This will let to work with a fixed amount of resources which would not include a massive budget and the expectation to meet specification will be higher than 60-70%. The PM should have educated beforehand the sponsor on the benefits and purpose of a risk management plan because it would be almost impossible for him to create an effective plan on his own without any input from the rest of the team.(Burke, 2015)

5. How effective will the risk management plan be if developed by the project manager in seclusion? The risk management plan cannot be done in seclusion because it is part of the project planning . It identifies how to approach and plan the risk management activities of the project. It needs to be established from the beginning in the project and continually developed through project life cycle. The process will include identifying the project charter, current policies, current roles and responsibilities, and the project manangement plan and RMP strategy needs to be established early in the project and will need to be continually developed throughout the project cycle.(Kerzner, 2009)

6. Should the customer be allowed to participate in or assist the contractor in developing a risk management plan? Risk management requires regular participation from all stakeholders of the project. The risks mostly identified by the customer using questionnaire and surveys. Customer needs to be involve since in any case there is a risk then its the risk management program that will setting reality cost, schedule and performance objectives and identifies areas that require special attention. In addition to that, the customer would loose trust on the company and at the same time, work will be delivered low quality. (Kerzner, 2009)

7. How might the army have responded if it were presented with a risk management plan early during the R&D activities? Army could find more suitable contractor if they were presented with a risk management plan earlier before g contracts. Further to be more safety, they can write penalties in the contract award if specification not met. Knowing and understanding the risks prior to a contract award and even after changes the entire approach to a statement of work.

8. How effective is a risk management plan if cost overruns and schedule slip-pages are always allowed? • No need for risk management plan when cost overruns and schedule slip pages are always allowed. The majority of project decisions strongly related to cost and schedule. • Any program element associated with cost, schedule and performance has a direct interface with a risk management process. The army will not penalize the company for failing to met cost or for allowing the schedule to slip.

9. How can severe optimism or severe pessimism influence the development of a risk management plan? • These two let engineers and scientist to become reactive rather than proactive thinkers. So, without proactive thinkers, it will end up with no risk management plan. This will force to accept crisis management as a way of life and will increase the cost.

10. How does one develop a risk management plan predicated upon needed advances in the state of the art? He can develop risk management plan without being optimistic to not become reactive rather than proactive thinker. Project using state of art tends to have more uncertainty since the plans are based on anticipated situations in the future. They should research more and find alternative tactics or solutions to have a breakthrough of the project.

11. Can the sudden disclosure of a risk management plan be used as a stopgap measure to prevent termination of a potentially failing project? Yes, the sudden disclosure of a risk management plan can be used as a stopgap measure to prevent termination of a potentially failing project. The project will be deemed as a failure, if risks are found before even starting it. By presenting it as a stopgap on a potentially failing project will give a margin of success by presenting solutions and situations, and creating a risk management plan.

12. Can risk management planning be justified on almost all programs and projects? Yes, the risk management plan is important to all programs and projects. The risks may cost a company more money if they are not identified, eliminated from the beginning or even reduce their impact. If they weren’t determined from the beginning, these risks will be harmful, and will reduce the value of success of the project. By providing a risk management plan, not only will it help, but also improve the success rate of the project by implementing tactics and solutions that were made beforehand.

References "Altex Corporation Case Study." StudyMode.com. StudyMode.com, 10 2012. Web. 11. 2. 2015. . Altex Corporation Case Study. (2017, Feb08). Retrieved from http://studymoose.com/altex-corporation-case-study-essay Jamie Burke. Paper #6 (April 23, 2015) http://www.jamieross.com/s/ogl_240_paper6-2.pdf