BSBPMG517 – MANAGE PROJECT RISK – EDMUNDO IGNATTI NETO

SUMMATIVE ASSESSMENT 2

PROJECT

Makeovers R Us specializes in managing house and garden renovations. Their clients are usually
busy couples and families who do not have the time to manage their own renovation projects and
people who are just daunted by the whole idea.

Makeovers R Us can source all of the expertise required, including architects, landscape designers,
builders, painters, electricians, wreckers, rubbish removalists and interior designers, as well as
manage the entire project from scoping and preparation to completion.

Its claim is that it will manage the project: 'On time, on budget, to your specifications.'

Makeovers R Us has been contacted by Cecile, an accountant, who is looking for someone to manage
the renovation of her kitchen. This will be a complete makeover-everything to go with installation
of new stove, sink, fridge, dishwasher, benches and cupboards.

Cecile has prepared a list of specifications. Cecile's specifications:

1. Everything in the kitchen except crockery, food and cutlery is to go, crockery etc will need to be
stored somewhere as she has little storage in the house.
2. She will require somewhere to make a cup of coffee and heat the occasional meal throughout the
renovations and somewhere to keep the milk and other fridge things. She does not want that huge
fridge in the lounge room or anywhere else during the renovations.
3. Paint colour needs to tone with the benches; however, she is not sure what finish she wants on
the benches and she would like some samples and prices to consider.
4. Stove, fridge and dishwasher need to be good quality, but not over-the-top prices. She would like
Makeovers R Us to source options and make recommendations based on price and quality.
5. She is unsure of what to do with the cat while the renovations are happening, as it usually has
the run of the house.
6. Everything must be finished in five weeks as Cecile's mother is coming to stay.

Cecile does not have a fixed budget for the renovations, but is getting three quotes for the job and
will decide who to contract based on her assessment of which company:
 is best able to assure her that they can finish the job in five weeks
 has the best solution for storing the kitchen equipment during the renovation
 can come up with a reasonable temporary kitchen space during the renovations

Based on the project, Makeovers R Us:

1. Complete risk management planning by:

a. Providing an outline of risk management plan.
b. Providing a brief description of the project.
c. Describing what tools, techniques and processes you would plan to use in the project.

2. Think of at least two risks that could be presented as an opportunity to enhance project objectives
or negative risks that could be thought of in a positive manner. Describe the positive risks.

3. Consequence and likelihood. List the project risks and assign a rating to each risk for both its
consequence (impact) and likelihood (probability) of occurring using a rating scale. Then provide a
description of the risk’s potential consequence and likelihood of occurring. Be sure to include some

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positive risks as well, which may present opportunities to enhance project objectives.

4. What quantitative risk analysis techniques would you see?

5. Design a risk response template that you could use for this project.

6. Create a risk register to list the risks you have identified in the project. Document the results of
your risk management activities in a report.

7. When conducting risk monitoring and control, what would you need to consider for this project?

8. Produce an outline of a report that would allow you to effectively review the effectiveness of risk
management policies, procedures, processes and activities for the project. In your report include
questions and headings that would help you evaluate the risk management process, policies,
procedures, tools, techniques and activities used.

Introduction
Makeovers R Us has been contacted by Cecile, an accountant, who is looking for someone to
manage the renovation of her kitchen. This will be a complete makeover-everything to go with
installation of new stove, sink, fridge, dishwasher, benches and cupboards. Cecile has prepared a list
of specifications.
Projects contain inherent risks and uncertainties. The traditional methods of combating these
uncertainties are factor contingency into the time and cost estimates of a project. Unfortunately, even
with contingency factors, most projects miss their target schedule, cost or scope. One of the
contingency approaches is project risk management. Uncertainties are a common phenomenon in
project implementation, which can create risks to accomplishing project objectives, finish the project
on time, within budget and with a satisfied client. Comprehensive management of risks that threats
the satisfaction of clients is vital in the successful implementation of a project.

Risks and opportunities

In order to deal with risks involved in the project, it is imperative to conduct a risk analysis so
as to identify potential risk. Project risks can be categorized into:

Performance, scope, quality and technical risks.

These types of risks arises when part of the project fail to perform as planned or result into
de-lays in schedule and cost overrun in cases where technical problems lengthen the project. Some of
the technical risks include

Tooling breakage
Tool breakage may increase the overall cost of the project or delay the completion of the project. The
impacts of such a risk depend on the importance of the risk in the project and preplanning by the
project team on such as issue.

Design conflicts
It is possible for clients to make impromptu changes in design of the kitchen. Such abrupt moves can
rave havoc on the entire program.

Electrical issues
Interruption of electrical supply during the execution of the project may adversely affect the

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scheduling timelines and client satisfaction.

Personal injuries
Personal injuries may reduce the amount of workforce dedicated to the project. The management
must institute prior planning to deal with the issue of personal injuries. Apart from providing a good
insurance cover for employees, it’s important for the management to ensure safety standards are
observed. There should always be a contingency plan to replace injured personnel without disrupting
the progress of the project.
Other minor potential risks to the implementation of the project include water turned-off, client losses
job and delayed payment

Environmental, safety and health risks.

The different types of risks can be encountered in valid forms and intensity during execution
of a project. However, incremental and catastrophic risks are the most common varieties of risks. In
some instances, incremental risks may not be threatening, but they can accumulate to harm levels.
However, their snowball effect can make a minor problem to cause great damage to the project.

In kitchen remodelling project, weather is a common risk factor. It is fundamental for the
project implementers to be aware of the probable issues that bad weather can result into such as
emotional stress to clients and contract, additional cost and delayed schedule. For example, interior
design may appear not to be of any concern to the contractor, but if the customer/client requires the
contractor to do the cutting outside the house, then unprecedented delays occur. Such risk can be
mitigated by putting in place measures to ensure the cutting can be done in the garage during
inclement weather or informing the client that work will be stalled during bad weather. Winter is
another source of incremental risks. Several factors such as having to work in heavy clothing may
delay the progress of the work. Snow may also hamper accessibility of the working site lumber may
freeze when left outside or cabinet freeze.

Catastrophic risks are a major threat to the project. However, the probability of their
occurrence is low and their impact high. Some of the probable catastrophic risk in kitchen remodelling
includes a discovery of an unexpected contamination or failure of a contracted supply to deliver critical
materials or accidental fires that can be caused by propane heaters used to keep additional basements
warm

Schedule risks

This involves risks that make the project to take longer time than precented. Schedule risks
result into cost overruns and performance risks. Schedule risks may be due to shortage of materials
which will lead to postponement of the remodelling schedule. For example, the need for more
flooring may lead to project delay until the additional materials are ordered and arrive. The second
schedule risk is labour. Many project run the risk of one phase taking a longer time than planned. This
may force the project implementers to increase the number of employees or defer the completion
schedule.

If the project run short of people due to illness or long of cost due to unprecedented issues, it
is often advantageous to assess tasks that customers can perform themselves. Home owners
frequently use this strategy to reduce costs on home improvement projects. For example, the
homeowner may remove the old cabinets himself or herself instead of paying the contractor to do it.

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On large projects, the client may take responsibility for ordering equipment and materials or delivering
end-user training.

The most promising areas to looks for client involvement are administrative role low-expertise
tasks. Another place to look is at the beginning or the end of the project, when there are various tasks
requiring cooperation between the customer and the project team. In addition, the work package
estimates and responsibility matrix show areas of the project where owner/client is al-ready involved
and could probably take another responsibility.

Some aspect of the project will require outsourcing of some services for professionalism and
efficiency. This exposes the project to the third schedule risk. The availability of the hired con-tract
may derail the project. It is also possible to have a conflicting schedule with the out-sourced
contractor. Delay in providing the outsourced services will influence the completion date and
probably the overall cost of the project. Installation problems and mistakes may derail timelines
allocated for certain phases.

The cost of the overall remodel might exceed budget costs. This can be caused by two main
reasons. First, the initial budget may have been underestimated. Secondly, unprecedented change of
the original design.

Most remodels encounter financial and relationship risk in their everyday activities. This is
because many remodels are not true and genuine to the client before commencing the project.
However, these risks can be easily managed through education, budget and process. It is imperative
to educate the client on goals, objectives, timelines, budget and process of the project.

The table below represents risks, probability, consequences, responsibility and mitigation for each of
the identified risks

Risk Matrix Commented [SV1]: This is risk response template

Risk event Probability Consequences Responsibility Solution
Bad Weather Unlikely Minor Project Complete in
manager summer
Very slight delay Indoor project

Damage other Have tarps on

things standby
Client design change Unlikely Moderate Project Contract works
manager
Delay job Contract plumber

Extra costs
Variations
Electrical issues Unlikely Moderate Project Hire a licensed
manager electrician
Delay job
Water turned off in Unlikely Minor Project Check with water
areas for maintenance manager corporation

Slight delay fill up drums

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Electrical outage Unlikely Minor Project Check with Power

manager corporation
Slight delay

Satisfactory

Overall result: To amend

Formative: Satisfactory

Summative 1: To amend

Summative 2: Satisfactory

Assessor: Shantha Velaitham (Mrs)

27 July 2017

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