Risk Management and Contingency Planning - 2591 Words

Project: A case of manufacturing, delivery and installation of a large power transformer. 1. INTRODUCTION A project to manufacture, deliver and install a large power transformer is time and resource (material and labour) consuming, relies on services and products provided by more than one supplier, involves multiple expertise, and costs tens of millions of Rands. If a transformer fails, the cost of rectification can go as high as over 70% of the price of a new one. By so saying, risk management and contingency planning plays a key role in the management of such a project. In this report, the need and process of risk management as well as the types of risks in relation to the power transformer project are discussed. 2. PROJECT†¦show more content†¦Like in many other projects, the basic concerns in the power transformer project are schedule and costs, while continuously ensuring that the product meets required specifications and performance – any deviation to what is planned constitutes a risk. In practice however, things do not always go according to plan and therefore risk management is needed to ensure that chaos does not prevail. The point that Kippenberger (2000) is making in his article titled ‘there’s no such thing as risk free project’ is that almost everything we do in a project involves a risk of some kind – by so saying, it is therefore essential that we are prepared or able to deal with risks. Most literature puts emphasis on the negative connotation that the word ‘risk’ carries. For instance, Chapman and Ward (2003) provide the meaning of risk as: hazard, chance of bad consequences, loss, and exposure to chance of injury or loss. Galway (2004) defines risk as an event which is uncertain and has negative impact, and similarly, Martin (2008: 38) defines risk as the ‘chance of something occurring that has an adverse effect on the project’. This negativity highlights the fact that problems can occur or things can go wrong and it is therefore important to have a systematic approach to managing them. Therefore in project management, risk management is ne cessary to increase the chances of the proposed project succeeding. 3. THE PROCESS OF MANAGING PROJECT RISKS The process of managingShow MoreRelatedThe Federal Information Security Management Act1089 Words   |  5 Pages The Federal Information Security Management Act (FISMA) Dayne Dickson Bellevue University The Federal Information Management Act Regulations are rules imposed by governments on companies, and individuals to ensures that society is protected. 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