Question 1 A: the analysis
In the contemporary society, risk management is seen to have taken much of the investors at stake. Each and every investor would want to be associated with a company whose risk factors are few. They would also want the companies to have a well-managed structure of risk management which will ensure that their investments are up to date. The integration of risk management strategies comes with a cost. These costs must be accounted for to avoid malfunctions of the whole project. In management, the investors would first look at the governance structure and how the policy statement of the management emphasizes on the real advents of the risk mitigation and control (Bittner, & Gregorc, 2010, p.134).
Project management requires that all the risks that are perceived to be involved should be inculcated in the costs analysis. The analysis would now be based on the tenets for which the company might desire. Risk assessment is essential to any organization that is doing any project. This paper looks at the performance analysis case study of the PCnet project. We would discuss various strategies that the company has used in implementing the integration project. Here we would look at the various measures that have been put in place to identify the risks that would be involved. The method that the company has used to prioritize the risks and how the risks have been managed is imperative to our study. The cost implications of the risk management are also vital in or analysis. A recommendation thereof will be given to accentuate the whole study (Vose, 2008, p.556). The primary objective of the analysis of this case study is to give much attention to the efficiency of implementing the project with extreme concern on the risk factors at hand. The analysis will be based on various categories of risk management. These classes include. The risk monitoring and control, risk planning, prioritization and lastly risk identification.
Even as Metal Resource Company embarked on the risk identification, they were keen to note that most of the risks emanated from the company operations. The procedures for identification of the risk were well defined. In the case study, Exhibit 6 gives detailed information on the various risks that have been brought forward. The company is also keen to inculcate the risks regarding the costs effects and implications. The categorization of risks shows the line of responsibility for which the risk should be mitigated. A closer look at the objective of the company, it is in line with the risk management objective. That is to cut down cost and make the implementation of the CNET project go smooth (Morris, & Sember, 2008, p.166). At the point of risks identification, however, the company did not give much attention to the roles and the responsibilities of the departmental heads in containing the risk and the causes for might be mitigated (Wearne, & White-Hunt, 2014, p.661). As the company identifies the risks they have extensively looked into the adverse effect of each. The company has categorized the ways and means for which they can know these risks. This has been made possible through the use of departmental heads that have been in constant touch with the men on the ground to get the feedback on the risk incurred during the implementation face. This notion gives the complete risk management the authentic it deserves.
On the account of risks prioritization, Max scheming gave this process a new look by creating a new business plan for those risks that had a high sense of financial impact on them. As in the case study, the company has used the ABC way of prioritization of risks. The company is dealing with the integration of IT in the merger. This notion calls for a reduction of costs at every step of implementation. The ranking of the risks in term of the level of critical and cost implication is one of the most important aspects of the risk management strategy. The use of the project value distribution curve as mentioned offered two related benefits (Morris, & Sember, 2008, p.26). Firstly it created a diverse mind for the management to think of a variety of scenarios. The only problem that this stance had was that the diversity of mind creates the command to have the lapse regarding focus.
The primary goal of the company is to be in line with the set objectives. If they have varied purposes, the expectation might be differentiated as well (Rausand, 2013, p. 112). This notion brings about the advent of less cohesion in the completion of the. The company also managed to save a lot by using the ABC prioritization method since it gave the company a sigh of relief in allocating other resources to related areas by providing less and minimal concentration to sectors that do not add much value to the enterprise. This type of risk prioritization also made the company create a range of probability regarding costing. Is deemed to give the company a high sense of cost reduction and every department has been given the set limits for which they should range their value for risks management.
Risk monitoring and management
A closer a look at the strategy that the company has used to monitor the risk, the company had majored on the very high-risk areas. For the principle of synergy to get accomplished, it important the high high-risk Ares be monitored carefully. As mentioned earlier, the high risks areas are mainly the operational areas. The risk management team, therefore, has focused on the operations level and left the management. The efficiency is again at the time when the risk is mitigated mainly at the operations level and given particular attention. One of the drawbacks of the style of management of risks is that there would be overlapping regarding the management reporting lines.
The person in charge of operation will have to report directly to the risk management team and not via the operations managers. This notion would create a disguise in the implementation of the whole plan. The control brought out at the point of operations gives the whole mitigation process the authentic (Rausand, 2013, p.112). Looking at the effect of the monitoring to the whole stakeholders fraternity, we see smelling giving an account of brevity in the project implementation basing his argument of the risk management techniques they have used. The company has put more effort in the risk management plan to give the business stakeholders the absurdity of their wealth. The only problem seen as at now is the need to make the implementation process very stable. Concerning the consultation for the implementation of the whole plan, the CIO is very reluctant in involving other for discussion owing to the fear that it would make the back down.
Statistical tools are very instrumental in making sure that informed investment decisions are reached. Some of the most important mathematical calculations that are prevalently used are the measure of central tendency. This includes the mode mean and median. It is also important to look at the measure of dispersion that (Morris, & Sember, 2008, p.66). This action mainly entails the use of standard deviation and the various. From the calculations of these statistic measures, we can look into the riskiness of different investment projects that may seem to be quite appealing yet hazardous In. Additionally there is needed to see how the various investment opportunities correlate with each other. In this since a closer look at the correlation coefficient of the returns of this investment is every important calculate. In the event of forecasting, it is important to see the real investment return rates and analyze them using the regression analysis. In regression analysis, there is the formulation of a particular equation that relates these returns and how they can be used to make a proper investment decision.
The implementation phase is faced with lots of irregularity such the loss of data i.e. the emailing and the messaging. This happens because the company is so interested in rolling out the whole project at one goes. This is quite detrimental especially to the continuing operations of the enterprise. A closer look at the management structure that is implementing the plan, it consists of a top down kind of governance structure. It gives the impression that the implementation of the IT project is a one man show.
The connotation is true since the CIO is the only person allowed to given orders and directions of what to be done at each and every point. This notion poses a risk of wrong decision making. The company needs the work to be implemented (Rausand, 2013, p.112). It is for this reason that they have decided to give the whole role out o the project a simple management structure. The opinion of others needs to implement in the scenario because this IT project will affect the well-being and the economic status of various stakeholders. One of the most important things that the management team has dwelt on is the mitigation measures in the most probabilistic way. We see the team seek the intervention of the diplomats in quelling the war tone rich countries. This method of risk management has proven over the years to be very successful. The company deemed to benefit a lot from this move. They will make this step through public relations where they bring peace to these metal producing zones.
The following are the recommendations from the analysis of the case study
The company should use the risk matrix method in prioritizing the risks. The company is ever evolving, the matrix method allows for provisions for any changes that might occur as technological advances take place.
The objectives of the risk management strategy should be more measurable and precise for every department. Again as the management seeks to implement the merger using IT, it should give focus on the governance structure that is implementing the whole project; it should not be a one-man show.
The management should also not only put more effort on the operations in the implementation process but also the management level. This notion creates the advent of accountability and responsibility in the whole process. The risks prioritized should be made to the entire management task force and not the implementer only (Morris, & Sember, 2008, p. 66).
The strategic move for the company to give tender for computer installation to one company was not in line with the risk diversification techniques. As a bigger company, if one company fails they would opt for another. In a much as the cost cutting issues are brought to book, it is crucial to look at the overall implication regarding the efficiency and effectiveness of service delivery.
Again in the implementation takes place, the team should use pilot implementation method. This will bring less disruption of the whole IT project; they should start from region to another. The problem of loss of messaging and emailing data could be curbed using this method of implementation.
Question 1 b
1 Organizational risks of mergers
The communication risks
This risk emanates where the communication and the reporting lines have been distorted. Even as the two companies merge, we have to recognize that the two companies have two distinct management structures that they believe in. When they have merged there is a daunting task of determining the best way from which the reporting line can be restored and managed (Cunningham, & Proctor, 2012, 66). The previous communications and reporting lines will no longer work. This notion creates a high sense of cost implication especially when they have to bring on board a new management style altogether
A lack of transparency, retention of core competencies and staffing and inadequately preparing for the inclusion;
As large enterprises RBD Inc. and Metal Resources have a well informed structure which follows the guidelines. The employees here have loyalty to these firms. Merging them creates employee morale to go down since they don’t feel attached to the new company as opposed to the old company.
The cultures of work in these two organizations are different. The difference will bring on board crashes in work ethics and, in general, the need to have a quite streamlined advent of restructuring regarding work ethics and operations.
As the information systems are being merged across the two companies, the technical difficulties arise where there was a loss of data. Some of the managers could get their working area promptly. This causes delays in operations posing risk of loss
Compliance related risks
The authority would be compromised, and the level of reporting would disrupt. The two companies have different levels of compliance. They have to create a laggard to each other to at par with each other.
Two possible risk response strategies,
These are risks that do not have a high sense of severity. A possible way to mitigate such risks is to retain them in the company. The company can operate with them in place. The only measure the company is deemed to use is to make sure that their occurrence is reduced and hence they are not a primary concern of the company as such (Carroll, & Troyer, 2006, 785).
These are one of the material risks that need to be looked into. The company needs to take strong consideration on the very existence of these risks because they have high-cost implications thereof. The best strategy to deal them is to create means and ways of reducing them. These risks can be insured that means they are transferred to another company.
The best way to deal with the value high risk is to avoid them altogether. They are avoided because upon occurrence they incur considerably high costs.
3 the pros and cons of using the ABC analysis
The main advantage of using the ABC analysis for categorization of risks is because it is cost effective. The costs are categorized in order of their rate of occurrence. This help in planning. The less important risk cost factors are categorized in one pact. This notion is very important when dealing with wide range of risks. As it were, the company seems to have a higher sense of varied risks. Some of these risks are of high sensitivity. For example, the breach of security in the operation, this type of risk cannot be categorized as the operation hazards (Callahan, Stetz, & Brooks, 2011, p.77). ABC analysis gives us the profound way of classifying the issues in such a way that makes work delivery fast. The disadvantage of ABC analysis is that the allocation of resources is determined on a prorated basis and not on the severity basis. Some of the risks might be neglected or apportioned less cash but in the long end, they tend to be riskier than others.
4: how the unexpected events can efficiently be handled
Here it means you would improvise on the areas where the risks have occurred by making sure that you are well equipped with the knowledge and the occurrence of every situation. This move keeps the company to have a high alert concerning responding to the very critical condition. This calls for the inception of the technical team who will think faster and faster remedy at all times.
Applying detachment strategies,
Here the company will try to avoid the risk at all times. It will give much attention to the company values and bring it at par with the production stance. The detachment strategy works well with high-value unexpected risks.
Setting up intensive meeting schedules
The intensive meeting schedules give the management an opportunity to keep up with the speed to overcome the events that are brought forward. The meeting schedules tend to give much attention to the need to catch with the latest mitigation measures. This measure once put to task and due to the machinery that it deserve will lead to high-level decision making that will reduce the tendency of high risks (Grey, 2008, p. 55).
Negotiating project conditions
This involves negotiating with the stakeholders on the best condition that should be adopted so that they are at par. Dealing with risks involves various stakeholders who are affected by the same. In the event of negotiation, the parties will agree on the way forward, and this will create a high level of understanding on how to deal with the risk.
In a nut shell, the company has taken the steps and measures in ensuring that as they roll out the PCnet project, they are actually cost effective. All risk factors have been well taken care of. The use of the ABC approach, gave them an upper hand in the prioritization. It should be noted however that the roll out of the whole project created a complication in the communication system. It now the duty of the IT management team to use a pilot implementation plans to address the issue.
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