RISK RESPONSE STRATEGIES AND RISK MONITORING

Risk identification and classification are designed to lead to risk response strategies and risk
monitoring and control activities. Risk management strategies are implemented through
collaborative activities in human resources. This report includes the roles and responsibilities of
the individuals in the process, the tolerance levels for the risks identified, and risk considerations
according to priority. Organizational risks require different response strategies depending on
whether they are positive or negative; response strategies for each have been discussed in this
report. Finally, this report summarizes specific risk monitoring and control activities.

Roles and Responsibilities
Project manager

Planning. The risk manager is responsible for developing the actual plans for mitigating risks
(Edwards et al.,2019) . Project managers plan the project activities, assign those activities to
project groups and individuals, and assign responsibilities.
Monitoring activities. Project managers monitor the progress of the projects to ensure
conformity with project deadlines and resources.
Controlling. Project managers assess the process to determine and manage functional,
operational, and budgetary deviations.
Implementing. Project managers are responsible for actualizing the purpose for which the
project is determined to achieve (Edwards et al.,2019). They oversee critical activities to ensure
successful fruition.

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Coordinating. Project managers collaborate the individual and group efforts to ensure smooth
flow and order of the project activities.

Project sponsor

Championing the project. Project managers champion the project through resources,
communication, and negotiating with other keys stakeholders and third parties.
Providing. Project sponsors provide resources to be consumed during the project
implementation (Breese et al.,2020).
Supporting. The project sponsor supports by solving issues that require decisions beyond the
project manager’s scope to be made.
Decision making. Project managers make critical decisions that determine successful project
implementation such as approving the scope and plans (Edwards et al., 2019).
Directing. Project sponsors provide the course or direction that the project follows. They
determine what gets done and how it gets done.

System analyst

Designing. System analysts design the systems used in risk management.
Reviewing and developing. Systems analysts critically evaluate the functionality of project
management systems and determine when upgrades are required. They implement the upgrades
as well.
Systems management. Systems analyst analyze the operationalization of the project
management system to ensure it fulfills its functions according to the set efficiency standards.

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Data administration. Systems analysts monitor data activities to actualize data transfer,
implement data security and integrity, and share activities.
Preparing reports. System analysts prepare periodic system performance reports. The reports
are used by various parties such as project managers and sponsors to make decisions on
efficiency and recommend improvements to achieve accuracy.

Risk Tolerance

Risk seeker: Risk seekers view risks as opportunities and are not much concerned with the
severity of the risks but focus more on the outcome. Despite the worst-case scenario, risk-takers
tend to be creative and optimistic about successful project implementation.
Risk-averse: Risk-averse individuals view risks as hindrances towards successful project
implementation. Risk-averse individuals avoid taking risks except in cases where the rewards are
high enough (Edwards et al.,2019). Risk-averse individuals may magnify small risks, and their
risk identification processes are likely to identify more risks than risk-averse individuals.
Your recommended team structure based on risk tolerance: Heterogeneous teams
Justification: A heterogeneous team would provide a perfect balance of ideas and activities.
Depending on the importance of the particular activities in the project, a heterogenous team
would be ideal. For high-stakes activities where the project’s life would be significantly affected
by the risk occurrence, a risk-averse team would be the best. For the activities where the
occurrence of the risk would not be significantly detrimental to the life of the project, a risk-
seeking team would be ideal. In a project, the level of risk acceptance for all activities cannot be

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the same. There are activities that require a risk-averse approach while others require a risk-
seeking approach. A heterogeneous team would therefore be recommended.

Addressing Risks According to Priority

Severity of consequences: The severity of risk can cause ramifications to the project, the people
involved in its implementation, and the goals that the project is designed to meet. Severity of the
risk can range from critical impact which can cause termination of activities, significant impact
which causes significant downgrade of activities, minor impact where key activities continue
with minimal interruption or low impact where no activities are affected. Severity of
consequences therefore requires active risk management.
Cost-effectiveness: Cost-effectiveness is the measure of the economy of a project that is arrived
at after considering the outcome and the resources it took to achieve the outcome. The ideal
project aims to deliver the best outcome at the most reasonable cost. To achieve this,
coordination of activities, organizing people, and sharing and distributing information needs to
be adept. Cost-effectiveness, therefore, requires active risk management.
Time consideration: Projects are designed to take specific timelines. This is why plans are made
and activities arranged. In project implementation, some activities are chronologically dependent
such that one has to end for another to begin (Edwards et al.,2019). Projects that take longer to
complete may consume more resources and affect the project’s success (Cidav et al.,2020). Time
consideration is, therefore, an essential aspect and requires active project management.

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Are your risk response strategies realistic? Risk response strategies are measured for
efficiency based on how well they reduce high-impact outcomes and ensure prompt resumption
of project activities. The strategies consider the severity of the consequences, cost-effectiveness,
and time consideration. Therefore, the risk response strategies are realistic.

Risk Strategies for Negative Risks

Mitigate: These are the activities that reduce the threats to the project. Risk mitigation means
acknowledging that the threat is potent and taking activities to reduce the potential of significant
loss. Risk mitigation is advantageous because it gives the risk manager the control that they can
use to influence the outcome. The major disadvantage is that a risk manager may not identify all
the risks and may lack countermeasures when unforeseen risks occur.
Transfer: Risk transfer is the ability to transfer the liability of the loss arising from the
occurrence of the risk to another party. The significant benefit is that it provides a buffer against
seen and unforeseen risks. The disadvantage is that risk transfer often comes at an additional
cost.
Avoid: Risk avoidance eliminates the hazards or perils that are likely to result in losses. The
benefit is that more safety is achieved when the hazards are eliminated. The disadvantage is that
by avoiding potentially risky activities, organizations also fail to benefit from the returns
associated.

Risk Strategies for Positive Risks

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Enhance: This is the process of creating a conducive environment for a positive risk to occur.
The advantage is that the teams that adopt risk enhancement activities stand to become
strategically placed to tap into the benefit when the risk occurs. The disadvantage is that it may
require significant cost investment.
Exploit: These are the activities concerned with actively ensuring that the risk occurs. The
difference between risk enhancement and exploiting is that enhancement creates the likelihood
by simulating environmental factors and waiting for the risk to occur, while exploiting is active
aggression for the risk to occur. The advantage is that it reduces uncertainty because teams root
for the risk to happen. The disadvantage is that its risks exploiting may come with negative risks.

Share: Risk sharing is the concept of partnering with another party to benefit from the outcome
of positive risk. The advantage is the pooling of resources and skills, which makes success more
likely. The disadvantage is that the benefits from the occurrence of the risk also have to be
shared.

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Risk Response Strategies for Identified Risks

Risk ID Risk Description Response
Strategy

Action Plan

Exampl
e

Sudden loss of electricity Mitigate Purchase generators and large fuel canisters

1
Elimination of the hierarchical level of tactical
nature within the structure

enhance Distribute powers and decision-making authority.

2
Geographic dispersion of the organization exploit Acquire controlling interests in other organizations.
3 Implementation of software many modules
organizational.

enhance Increase allocation to software

4
Overbudgeting for the software development enhance Increase the scope of activities in software

development

5 Change in national data security policy share Bring in a data partner on a third-party contract.
6 Inappropriate choice of external developer mitigate Critically vet all potential developers
7 Improper choice of version of development and
deployment tools

transfer Subcontract acquisition of development and

acquisition tools

8 Wrong choice of the consultancy firm mitigate Critically vet all potential consultancy firms.
9 Lack of accuracy in the data to be migrated transfer Subcontract data related activities to a third party
10 Poor definition of project scope mitigate Continuous monitoring and evaluation
11
Inadequate deployment strategy mitigate Design several development strategies
12
Financial instability due to high market volatility mitigate Acquire additional funds through debt.

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13 Change in production processes and
organization’s administrative

avoid Design rigid production processes

14
Lack of process mapping before
selection/implementation of the system

mitigate Use artificial intelligence for mapping and virtual

process visualization

15
No formalization of the project schedule mitigate Monitor the project schedule regularly

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Risk Monitoring and Control

Individual(s) responsible for monitoring risks: Risk monitoring and control will be actualized
by project managers, project sponsors, and system analysts. Each individual has different roles in
the life and implementation of the activities. For example, the project managers anticipate the
risks and design action plans. Project sponsors will review the plans, approve and provide
resources. The systems analysts will monitor the implementation of such plans and give reports
on their efficacy.
Frequency of risk audits: Risk audits will be carried out monthly, and the reports arising from
such audits will be generated and shared with the teams. This will be an efficient way to appraise
the risk management strategies and provide decision support.
Will you use auditors from the project team or outside of the project team? The audits will
be carried out by both internal and external teams. The internal teams will carry out the audit
first. External auditors will come in to verify the validity of the opinion given by internal
auditors and give a second opinion (Stefaniak et al., 2012).
How will new risks be identified? New risks will be identified by considering data from
periodic meetings, reports produced by the systems analysts, and audit reports and opinions from
internal and external auditors.
How will outdated risks be removed? Outdated risks will be removed by discontinuing the risk
management activities and redirecting resources.
Were the risk response strategies effective or not? The risk response strategies allow teams to
avoid huge impact from highly potent negative risks and exponential benefits from positive risks.
Critical activities continue uninterrupted and a mechanism for measuring and evaluating present
and future risks is in place.

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Conclusion

This report has evaluated the responsibilities of project managers, sponsors and systems analysts.
It has also identified risk managements strategies based on type of risks (positive or negative)
and the risk tolerance levels. The strategies have been discussed for the risks previously
identified. There is also an established mechanism for auditing, identifying new risks and
eliminating the outdated ones. The steps have proven successful in management of the identified
risks.

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References

Breese, R., Couch, O., & Turner, D. (2020). The project sponsor role and benefits realisation:
More than ‘just doing the day job.’ International Journal of Project Management, 38(1),
17–26. https://doi.org/10.1016/j.ijproman.2019.09.009
Cidav, Z., Mandell, D., Pyne, J., Beidas, R., Curran, G., & Marcus, S. (2020). A pragmatic
method for costing implementation strategies using time-driven activity-based costing.
Implementation Science, 15(1). https://doi.org/10.1186/s13012-020-00993-1

Edwards, P. J., Serra, V. P., & Edwards, M. (2019). Managing Project Risks (Ccps Concept
Book) (1st ed.). Wiley-Blackwell.
Stefaniak, C. M., Houston, R. W., & Cornell, R. M. (2012). The Effects of Employer and Client
Identification on Internal and External Auditors’ Evaluations of Internal Control
Deficiencies. AUDITING: A Journal of Practice & Theory, 31(1), 39–56.
https://doi.org/10.2308/ajpt-10179