Project Risk Management 1

PROJECT RISK MANAGEMENT

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June 13, 2020

Abstract

Project risk management generally defines the need for project risk rating and priority

setting to concentrate on the risk management initiative on a higher risk. The theory of risk

and its prevention is an essential element of a business entity's safety, and commercial

dependability is, therefore, a binding fragment of a business' tactical growth and life. Most

companies tackle risk management concerns by recognizing the danger associated with the

operating industry, comprehensive assessment of the company and its state of affairs,

continuous public and board review to improve the safety of the customers in the form of a

hazard. An aspect ratio and recovery process must be set by appropriate business objectives.

In the telecommunications sector, project risk management is typically characterized by

broad infrastructure requirements, a healthy competitive environment for companies.

Telecommunications management aims to recognize the risks involved, the mechanism

needed to determine and reduce the related risks to rise or interrupt the telecommunications

network. Telecommunications organizations should align their business strategies with the

latest evolving methods of communication like prompt community adoption, social

networking sites, and an internet self-service. Multi-international telecommunications

companies should conform to legal standards like consumer protection and the set regulations

defined by the authorities in question. Control by the governments concerned with these

regulatory requirements allows the telecommunications industry to achieve significant

benefits by turning its risk and enforcement activities into a regulated structure. This paper

describes how risk can be measured and ranked. The paper also describes the project risk

management strategy for telecommunication companies involving stakeholders in Europe, the

United States, and Saudi Arabia.

Table of Contents

Abstract......................................................................................................................................2

1. Introduction.....................................................................................................................4

2. How Risk can be Measured and Ranked.........................................................................4

2.1. Qualitative Risk Analysis........................................................................................5

2.2. Quantitative Risk Analysis......................................................................................5

2.3. Project Risk Ranking...............................................................................................6

3. Risk Management in International Telecommunications Project...................................8

3.1. Theory......................................................................................................................9

3.2. Introducing the Risk Breakdown Structure.............................................................9

3.3. Different Approaches for Risk Decomposition.....................................................11

4. Conclusion.....................................................................................................................13

5. References.....................................................................................................................14
 Project Risk Management 4

Project Risk Management

1. Introduction

Risk is a term that describes a possible negative effect on a resource, or any value

attribute that may occur from some mechanism or event in the future. The danger is also

interchangeably used in daily usage with the probability of a known failure. Some companies

go by without a written agreement of risk assessment, nor is there a unit that directly

evaluates the organization's risk impact. In daily lives, we have been so used to risking that

the tendency is to reject simple issues and react when significant problems occur. Also,

successful risk management brings with it individual costs, which, when introduced to

stakeholders, will inevitably lead to concerns about how the costs might be explained. Risk

management is a popular buzzword, but not a new science in any way. Evermore businesses

and organizations realize the need to identify threats that can be managed and counteracted

within them.

2. How Risk can be Measured and Ranked

Risk is measured according to impact and probability. Even though the risk is closely

linked with loss, it is essential to be in a position to determine and address risks in one's

business. Inattention to the threats can affect the bottom line of business. Within the risk

management research, it is widely mentioned that part of the project risk management process

involves the review of known risks in terms of their possible implications and the likelihood

of occurrence. It allows threats to be listed as targets for management. Therefore, once

project risk events and causes have been identified, the next step is to analyze and prioritize

risk management actions. This process is an essential connection between systematic

identifying risks as well as the rational management of the substantial ones. The purpose of

the risk analysis is to evaluate which risk events warrant a reaction. The project risk
 Project Risk Management 5

assessment process begins in the planning phase, but it should proceed through each phase of

the project. But to dig deeper, you also need qualitative and quantitative analyzes of the risk. 

2.1. Qualitative Risk Analysis

Qualitative risk assessment is the process whereby risks are prioritized for further

evaluation or action. You do this by predicting the probability or possibility of every risk

happening and rating its influence on the project. Frequently, the scale used ranks from zero

to one. Such that, if your project's probability of risk is.5, then there's a 50 % chance it will

happen. There is a sufficient scale, which is graded from one to the finest, with five being the

project's most impact. The risk is then classified as either source- or impact-based.

Qualitative risk analysis is useful because you not only decrease project ambiguity and also

focus on high-impact risks, for which you can plan effective prevention responses. The

assessment of the identified priority risks is defined as the likelihood or possibility of risk

occurrence, the correlating impact of the risks if it occurs, and the intensity of identified

risk[CITATION Nad181 \p 1650 \l 1033 ].

2.2. Quantitative Risk Analysis

Quantitative risk analysis is a scientific procedure of the impact on the overall project

of those known risks. It helps team members make decisions with less unpredictability and

supports the risk-control process. Quantitative risk classifies the potential project outcomes

and outlines the likelihood of still meeting project goals. It helps with decision-making,

especially when there is ambiguity and produces realistic targets for cost, schedule, or scope.

They used a formal verification of the design model to detect risk interactions and construct a

risk propagation method to forecast global mitigation effects of risk action plans[CITATION

Mur171 \p 325-326 \l 1033 ].

2.3. Project Risk Ranking

Organizations dealing with several projects should take a common approach to

determine and prioritize projects utilizing risk as a guideline. Most companies, on all projects,

have restricted resources to handle all risks equally. The company should evaluate and

prioritize the level of risk of each project to solve this issue so that a reasonable degree of

effort can be allocated to the management of such projects. In general, resources are targeted

towards managing projects with a higher risk rating.

The risk ranking approach is relevant conceptual and numerical risk research within

the constrained truth of the EPA guidelines. The empirical findings show that promoting real

decisions with a broad range of risks, and investors could be believed. It is based in detailed

testing on what risk attributes are essential to people, how to classify them empirically, and

how to show them in a comprehensible column recommends a risk-management procedure

with conventional steps – but with an essential commitment to self-assessment, it does not

continue until a level has have been satisfactorily completed[CITATION Bac01 \p 139-142 \l

1033 ]. The left-hand bar prescribes continued two-way public interaction. This interaction

aims to focus the procedure on people's concerns and make its assumptions as accurate as

feasible.

Possible risk rates are calculated in this description on a singular dimension called

risk magnitude. Having zero risks on this scale means getting no further interest. The height

of every curve (a function of density function) reflects the probability of getting that risk

level.
 Project Risk Management 7

Figure 1: Steps in the Risk Management Decision-making Process Simple Model[ CITATION
Fis13 \l 1033 ]

The vagueness of the Risks 1 and 3 curves implies that they are recognized

comparatively well. Their scale location illustrates that Risk 1 must be lower than Risk 3. The

flatness of the Risk 2 curve means that it is far less recognized than either Risk 1 or Risk 2.

Its ranking is less evident too. It would have a much lower risk, most likely, but it has some

chance of a greater danger. People who were particularly concerned about substantial risks

could be given a higher rank[CITATION Fis13 \p 40-47 \l 1033 ]. PRR's goal is to determine

the relative level of risk of contracting projects so that a reasonable degree of effort can be

applied to managing such projects.

3. Risk Management in International Telecommunications Project

Due to the presence of several independent stakeholders and the difficulty of

forecasting new risks to the services, risks in the telecommunication domain are complex to

identify—the costs the telecommunication companies billions of dollars. Risks failed to

recognize new positions in developing industry ecosystems in telecommunications projects.

The introduction of potential projects and growth prospects in the telecommunications sector

needs a revived position of the value chain that participates in customer ownership with

disturbing stakeholders.  A telecommunications organization that operates internationally,

encompassing stakeholders in the United States of America, Saudi Arabia, and Europe in

particular, is bound to encounter difficulty in managing legislative statutes for new market

frameworks. Telecommunications risk project managers are, therefore, evaluating and

influencing new legislation about customer attitudes.

Furthermore, mitigation of the hazard in a telecommunication project may be

hampered by the inability of the company to boost flexibility in its operations. This agility

facilitates operations diversification based on the set telecommunication objectives, thereby

promoting innovation and flexibility from within the organization of the business.

Telecommunications projects involving international partners and stakeholder groups tend to

disregard the new security and privacy responsibilities. This type of risk leads to a decrease in

the level of customer confidence that forces regulators to reconsider individual data security

structure. The unforeseen circumstances and risks of telecommunications ventures made up

of foreign shareholders that have a positive or negative effect on the goals of the project.

Many risks to an enterprise may not only lead to catastrophic consequences but also generate

new possibilities based on project goals, for example, when the telephone servers in the

company collapsed due to a sudden rise in demand for the project concerned.
 Project Risk Management 9

It illustrates how valuable the telecommunications system is. In particular, a real risk

in the telecommunications industry is a beneficial factor because its effect results in useful

advances for the business. On the other hand, adverse chances are an obstacle to the

successful delivery of services and, therefore, do not meet the objectives of the organization.

The most common issues to a telecommunication project that involved international

shareholders involve an increase in the expenses involved due to poor cost assessment and

lack of research into the nature of the business. A planned risk in project management often

attempts to highlight the execution, and execution of the project can take longer than usual.

Eventually, taking notice of the project success of telecommunications is a vital determinant

in helping shareholders assess the quality of the business view[CITATION Koz15 \p 9-11 \l

1033 ].

3.1. Theory

Risk management of projects is essentially a decision-making process. The method of

risk management is to "make reckless decisions or make decisions that are not focused on the

facts and risks involved being carefully considered. Managing risk includes a systematic

method, and project risk management is a structured, structured approach comprising a

collection of decision-making processes.

3.2. Introducing the Risk Breakdown Structure

Risk detection also only provides a long list of threats that can be difficult to handle.

The list may be given priority to decide which risks will first be tackled, but this does not

provide any insight into the project's risk framework. The best way to manage a large

quantity of data is to organize the details to support understanding. The centralized risk

description is a very useful method, which makes it much easier to manage the risk. It can be

based on risk Breakdown Structure (RBS), which uses a bottom-up approach to the group
 Project Risk Management 10

classified risk events into various levels[CITATION Meh12 \p 3-4 \l 1033 ]. The RBS is a

hierarchically structured representation of the recognized project risks organized by risk

category and subcategory, identifying the different areas and tends to cause of possible risks.

It includes the highest risk factors and initiatives undertaken by the group and category of the

project and organization, and efforts to structure the various problems that may impact a

project. An example of RBS is given in Figure 2.

Figure 2: Example of a Risk Breakdown Structure[CITATION Meh12 \l 1033 ]

The RBS is believed to be a great tool in the identification, assessment, and reporting of

risks, and the willingness to roll-up or drill down to the appropriate level offers fresh

perspectives into overall project risk exposure. A universal culture and terminology facilitates

reporting across projects and learning the lessons. The RBS can become the most important

single method for helping project managers identify and control their project risks.
 Project Risk Management 11

3.3. Different Approaches for Risk Decomposition

Over the years, several different risk classifications have been formed. However, most

have found the source definition to be the most relevant classification of the risks as per their

source in two key classes of internal and external risks. Besides the source definition, there

were other choices for classifying threats, which require multiple viewpoints. It proposed a

specific risk categorization concerning different project phases and risk distribution to

different project partners. They categorize the dangers into three main groups of the upper,

middle, and lower class risks as per their severity and significance. Categorization of risks

into dynamic/static, insurable/non-insurable, internal/external, positive/ negative,

corporate/individual, acceptable/unacceptable, and is also common. The fact is, there is no

benchmark or agreement today regarding how to identify risks.

Also, current risk-management tools of the organization have not been successfully

implemented. There were highly siloed perceptions of risks and risk management practices

across departments and a lack of risk management standards across projects, which meant

project leaders could shape project risk management to their desires. It was further

exacerbated by a lack of successful policy or impact management when things go wrong.

Reactions to unique conditions appeared to be sluggish as if the risk was still only taken into

account at the start of a particular project. There has been little conversation about root causes

and risk events and no clarification on how constant risk management can add value and

boost motivation[CITATION mck13 \p "para 20" \l 1033 ].

Improvements to the current strategy have been perceived as needing extra effort and

time and raising the risk of failure. Senior management agreed to adopt a systemic shift in

measures to strengthen operational risk management capabilities, from everyday workplace

activities and attitudes to mindsets and organizational culture.

Efficient and secure communication is important for any project's success. Hence, an

effective communication system needed to be put in place among the top individual

departments' major teams in any building project. It allowed for cross-divisional

collaboration, and coordination of goals and processes was made sure. Proper communication

with construction companies and performance monitoring was set up to help review and

periodically assess risks. There were clear directions from the level of the hierarchy to

operational levels that cascaded knowledge of risk management downwards. This method

also needed further advancement of "shop floor" risk integrity on-site, and also a shift from

ad hoc reactive risk management to effective risk expectation.

The telecommunication sector undermines risks considerably and lacks skilled risk

management. While under risk management, poor risk management during initial concept

planning and design phases, often under the obligation of public product owner, has an

especially negative impact on the ability of governments and private designers to achieve the

desired enhancement of infrastructure services. Even if, for instance, the involvement of

private-sector risk-takers, shareholders, and borrowers in PPP projects, implies that some

risk-management capacities are implemented later in the process, they cannot undo early

phase errors.

Badly constructed and planned projects result in significantly higher funding costs

and all too often in the failure to effectively mobilize private-sector funding and risk

allocation. In the lack of private funding and risk sharing, budget-funded public procurement

structures proceed to under-manage risk throughout the project's entire life cycle, resulting in

even higher project failure rates and lower results[CITATION mck13 \p "para 38" \l 1033 ].

Skilled risk management can not only alter the efficacy in public procurement

processes considerably; it can also entice and mobilizing additional private funding. There is

a strong case for accepting risk management all through the life cycle of specific projects and
 Project Risk Management 13

also at the portfolio level, considering the magnitude and context of evolving

telecommunication projects.

4. Conclusion

It is concluded that successful risk management brings with it individual costs, which,

when introduced to stakeholders, will inevitably lead to concerns about how the costs might

be explained. Multi-international telecommunications companies should conform to legal

standards like consumer protection and the set regulations defined by the authorities in

question. The project risk assessment process begins in the planning phase, but it should

proceed through each phase of the project. Improvements to the current strategy have been

perceived as needing extra effort and time and raising the risk of failure. Senior management

agreed to adopt a systemic shift in measures to strengthen operational risk management

capabilities, from everyday workplace activities and attitudes to mindsets and organizational

culture. Efficient and secure communication is important for any project's success. Hence, an

effective communication system needed to be put in place among the top individual

departments' major teams in any building project. A planned risk in project management

often attempts to highlight the execution, and execution of the project can take longer than

usual.

5. References
 Project Risk Management 14

Baccarini, D. & Archer, R., 2001. The risk ranking of projects: A methodology. International

Journal of Project Management, 19(3), pp. 139-145.

Fischhoff, B. & Morgan, G., 2013. The science and practice of risk ranking. Risk analysis

and human behavior, 10(3), pp. 40-47.

Kozarevic, S. & Besic, N., 2015. Risk management in telecommunications services in bosnia

and herzegovina. Review of Contemporary Entrepreneurship, Business, and Economic

Issues, 28(1), pp. 9-24.

mckinsey, 2013. A risk-management approach to a successful infrastructure project. [Online]

Available at: https://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-

insights/a-risk-management-approach-to-a-successful-infrastructure-project

Mehdizadeh, R., Taillandier, F., Denys, B. & Niandou, H., 2012. Methodology and tools for

risk evaluation in construction projects using Risk Breakdown Structure. European Journal

of Environmental and Civil Engineering, 16(1), pp. 1-23.

Muriana, C. & Vizzini, G., 2017. Project risk management: A deterministic quantitative

technique for assessment and mitigation. International Journal of Project Management,

35(3), pp. 320-340.

Nadaf, J., Nadaf, M., Jamadar, B. & Thejaswi, K. P., 2018. Qualitative risk analysis for

construction projects. International Journal of Engineering and Technology, 5(6), pp. 1650-

1654.
Project Risk Management 15