Executive summary

Every project has an associated risk that comes along with it. The possibility of the occurrence of adverse situations exists because the project may not take shape and direction in which it is intended. Project risk management is a crucial process that ensures that the project team identifies all the possible risk associated with the project and that the appropriate control strategies are put in place. The document management system (DMS) project is an internationally designed project that comes along with some significant risks. For effective management of project risks, it is crucial that the project manager has in place a risk management plan that allows for a continuous assessment of the project to determine the direction that it is taking. Some of the significant risks for the DMS project include; the ineffective customization of the system to fit the local needs of the business, failure to capture the critical concepts of the system, undervaluation of document preparation. Also, there may be a focus on financial benefits rather than the efficiency outcomes of it and the project may result in the establishment of a rigid system that is difficult to change when need be. `For effective management of the identified risks, models and theories of risk and procurement management will be utilized. The option theory and the prospect theories provide critical insights on the best approach to manage the risks identified. Also, the Boehm Model for risk management will be utilized to identify the approach to develop a risk management strategy.

Project Risk and Procurement

Every project has an associated risk that comes along with it. According to Hopkinson (2017), the possibility of the occurrence of adverse situations exists because the project may not take shape and direction in which it is intended. As such, the occurrence of unintended outcomes becomes a reality and this means that the project has to manage these occurrences adequately. It is crucial that both the project team and the project manager identify all the potential risks associated with a project so that it can put in place the appropriate mitigation measures to reduce its impacts into the business. Project risk management is a crucial process that ensures that the project team identifies all the possible risk associated with the project and that the appropriate control strategies are put in place. Project risk and procurement management is a process that involves various crucial steps that need to be implemented in a cycle if effective risk management is to be achieved. It is of critical importance that all the risks are identified in the initial stages of a project and similar weight directed to each of the risks. In this way, no risk will be overlooked and this will ensure that all the potential risks are put into check and appropriately managed. Timely management of risks as well as assigning the appropriate resources to manage risks ensures that the business maintains stability. Also, having a capable risk management team, regarding the knowledge and skills that they possess is crucial in ensuring that all the potential risks are appropriately handled.

Literature review

When conducting a project, it is vital for the project manager to evaluate the underlying factors that shape the fate of the project. Examining what previous scholars discovered in the same field is a critical step towards successful implementation of a project. A literature review will enhance the discussion by establishing the gaps left by other researchers thus boosting the outcomes of this study. Various articles will be reviewed to determine the credibility of the study by identifying the areas that need to be enhanced through further research. Various aspects will be evaluated with the aim of assessing the viability of the research exercise depending on what previous studies have established.

The risk from the viewpoint of a project manager

According to Rimal and Turner (2015), risk can be associated with the fear of unknown because of the outcomes anticipated when implementing a new project. The authors discovered that projects are faced with numerous challenges that could not be identified due to their complexity. Having such information is a critical practice that helps in prior planning to prevent potential risks from taking place within an organization when incorporating new technologies in the operations. Wynne (2016) also supported the idea presented by Rimal and Turner (2015) and attributed the presence of risks within an organization to the misunderstanding that is common amongst different stakeholders. It is essential for individuals to embrace effective communication when working on a project to avoid potential risks from taking place.

The articles have critical information that can help project managers towards making the necessary arrangements that are essential in managing risks. With such knowledge, the researcher will develop credible results because the process of analyzing data will be enhanced. However, the researchers did not handle the issue of dealing with foreign firms thus creating the necessity to conduct further research with the aim of establishing the situation when involving international firms. This research topic focuses on project risk and procurement where various aspects are examined to determine the overall impact of risk assessment.

Managing risk and the most appropriate stakeholders to manage it

Knuth, Kehl, Hulse, and Schmidt (2014) focused on the perception held by individuals about risks. The purpose of such study is to understand the causes of risks with the aim of developing an idea of how the menace can be managed when planning to implement a new project. For successful operations, risks must be identified and managed through the employment of appropriate measures that are meant to offer critical solutions. Ho, Zheng, Yildiz, and Talluri (2015) also noted that risk management is the only approach that can guarantee successful functionalities of an organization. When implementing a project involving an international team, it is essential for the project manager to evaluate the underlying factors that might contribute to the challenges associated with the project. The move is meant to facilitate the accurate formation of the management strategy to avoid downfalls of the project.

According to Bailey (2015), business continuity is a critical practice that must be considered when setting up a new project. The move promotes effective performance whereby the necessary strategies are incorporated in the operations to facilitate success. Relevant stakeholders must cooperate to ensure the required mechanisms are applied with the aim of preventing negative impacts on the project. The practice can be achieved through the assessment of different issues within an organization to determine the suitability of the project and potential threats. Researchers need essential information to offer guidelines on the current situation before pursuing a specific study to prevent repetition. Conducting literature review facilitates the process of acquiring background information and enhancing the collection of relevant resources that are critical during the study. These articles will form part of the useful sources of information that can help the researcher to develop viable recommendations due to the critical analysis of the situation as also recommended by Aven (2016).

Application of the Theory and Practice of Project Risk and Procurement Management towards developing insights and solving current problems

Theories enhance the decision-making process where specific events can be used to conclude some trends. Individuals engage in projects based on the anticipated outcomes thus necessitating the need to develop theories that can define the fate of an engagement. Prospect theory facilitates the process of creating an idea of what can be achieved at the end of a project thus determine the cause of events to promote the realization of positive results. Lam (2013) noted that individuals are motivated by the promising outcomes that are achieved from the project thus implying the need to streamline the operations with the aim of preventing negativity. The practice creates the need to evaluate different theories and establishing practical means that can be adopted by a firm to enhance the performance and attract more participants. Implementation of the DMS is a critical step towards eliminating paperwork thus requires a collaborative approach to ensure the project is adapted without facing numerous challenges.

Lee, Markowitz, Howe, Ko, and Leiserowitz (2015) supported the need for prediction because the practice contributes to the decision-making exercises that are meant to determine the fate of an organization. Predictions can be made based on various elements including the past situations, current position and the vision of an institution. Problem identification facilitates the development of appropriate strategy to handle the issue and enhance positive results. Rokonuzzaman and Paswan (2017) noted that investigations help in unraveling the critical problems that might hinder successful implementation of changes within a firm. It is through such evaluating both external and internal environment that the project manager predicts the potential outcomes and make the necessary arrangements to boost the results by applying best practices during the implementation process. The authors presented a critical argument that can help the researcher to develop insights on how to handle different cases when seeking to establish project risks and procurement practices.

Yang, Hsu, Sarker, and Lee (2017) also supported the initiative of understanding the critical issues on the ground before launching a project. The authors focused n the need for integrating the option theory in project risk management. They considered the quantification of the fair value of the risk mitigation measures through calculations. In this way, they explained that project managers would have an opportunity to select the most appropriate options for mitigating risks. The authors implied that managers have the responsibilities of evaluating the underlying factors that influence the outcomes of an operation. Research exercise involves data collection that might pose a critical challenge to the researcher if prior knowledge is not gained through an evaluation of existing literature. The use of different articles is an essential practice that enhances the results of a study because the researcher can incorporate various arguments when developing the conclusion of the exercise based on the information gathered from the field.

Reviewing different articles demonstrated a practice that is necessary for the promotion of effective operations. Project managers must work toward enhancing the outcomes of a given task by incorporating different strategies that can influence positive operations. As much as a lot of information has been developed by previous scholars, it is vital to note that the research topic focuses on project risk and procurement where an international team is involved. The authors of the previous articles focused on internal factors and recorded little information about the external forces that contribute to the growth of the company. The current study seeks to address critical issues that affect the implementation of new projects based on different factors thus necessitating the need to proceed with the research exercise to fill the gaps left by other researchers. General information has been discussed in the articles without focusing on a specific area that can help in streamlining the operations in different organizations thus creating the need to venture into a field that will help in shaping the process of working on a project within an institution.

Document Management System Project

The business environment is fast changing. The increasing competition has necessitated that businesses have an electronic system that facilitates the effective management of business documents (Zhang & Fan, 2014). With the highly diversified business activities, having a document management system (DMS) in place facilitates the realization of efficiencies and effectiveness in the business process. As a business seeking to develop a competitive edge in the operational market, it is essential to centrally store business documents so that business information can be easily accessed and modified. In this case, the company is seeking to adopt a document management system that is internationally developed and it is to be implemented by an international team within the next six months. It is important to understand that the suggested system is foreign and the implementers are equally foreign. This being the situation, the company is currently seeking to understand the basis for this particular system to capture its various critical aspects. The most important preparation is to have a project team in place that will take the lead in the orientation process of understanding how the system works. The team will closely work with the international team to implement the system in the business and to customize it such that it meets the specific needs of the business.

The concept of Risk in the Project

Because the DMS project being implemented is international, it needs to fit into the local context of the business appropriately. As much as numerous potential benefits come along with the system, there are equally significant potential risks that need to be identified as noted by Schwalbe, (2015). The project manager is who is in charge of the project is tasked with the responsibility of ensuring that the risk management process is appropriately undertaken. From a project manager’s perspective, a risk is any occurrence that will hinder the successful implementation of a project to influence the outcomes of the project such that it does not meet the project goals and objectives. For effective management of project risks, it is crucial that the project manager has in place a risk management plan that allows for a continuous assessment of the project to determine the direction that it is taking. In this case, the project manager takes the lead and seeks the support of the rest of the organizational team. The individual perceptions of the system among the organizational leadership and employees are crucial elements that determine how effective the system will work for the organization. The adoption of this new technology targets to enable the business to develop a competitive edge. In this case, the business needs to maximize on the benefits of the technology and minimize any adverse occurrences that it may bring about. It is important that various risk identification approaches, including brainstorming, checklists, interviews, fault tree analysis (FTA), and structured “what if” technique ()SWIFT are considered for identifying any potential risks (Kendrick, 2015).

Some potential risks are associated with the implementation of the DMS project and most especially because it is an international system. To ensure that the project succeeds it is important that these risks are appropriately handled at its early stages. The first significant risk of this project is the ineffective customization of the system to fit the local needs of the business. While some significant adjustments may be made, the system may not effectively suit the needs of the business and as it may be challenging to implement it appropriately.

Secondly, the task team responsible for maintaining the system may fail to capture the critical concepts of the system and this means that the sustainability of the system will be significantly compromised. The organization’s business processes will realize significant hitches that hinder the achievement of the business goals and objectives. The third is the undervaluing of document preparation. Considering the conventional processes involved in document preparation, using the digital system may compromise the quality of the documents developed. This means that while there is greater anticipation for accrued benefits, the opposite may occur such that the digital documents may not be as effective as the manual documents initially used. Also, while the traditional paper documentation is labor intensive and costly, the implementation of a DMS is perceived to bring about significant cost cuts. In this way, much focus may be directed to financial benefits rather than the efficiency outcomes of it. The goal or implementing this project is to realize business efficiencies, a shift in focus to realize financial savings indicates a change of focus. While financial saving is critical for business sustainability, it is considered a positive unintended income to the project. Another risk is the implementation of a rigid system that is difficult to change when need be. `Because the system is international, its customization process may be inadequate to meet the exact needs of the business.

Risk Analysis-How to Measure and Rank the Risks

The identified project risks all have significant relevance on how they will impact the ability of the business to achieve its goals and objectives. It is, thus, crucial to analyze each of the identified risks, measure and rank them (Acharya, Pedersen, Philippon, & Richardson, 2017). Risk analysis allows for the prioritization of what needs to be handled first to ensure that the project is not negatively impacted in any major ways. In this case, both the qualitative and quantitative approaches will be used to analyze the risks. The qualitative risk analysis will involve examining each of the identified risks, the probability of occurrence in the business and the possible consequences that it may bring about (Yoe, 2016). In this way, the all the organization employees will be involved in the risk analysis process such that they will be in a position to identify any possible risks that they may encounter. Risk analysis may also be done quantitatively whereby the organizational choices are identified. As much as these choices do not result to direct consequences, they play a significant role in influencing the direction that the project takes. The probabilities of these choices creating risks are established and possible consequences of the choices and decisions made. The application of risk management models and theories mainly facilitate the understanding of the nature of risks as well as the costs attached to these risks.

The option theory is an effective theory that aids in identifying the various options that can be used to mitigate potential risks. Once the prioritization of the risks through ranking them, the option theory allows for finding alternative options for managing them. Ranking of risks allows for making the right decisions about how to minimize the adverse outcomes of the project and maximize the positive outcomes. It also allows for determining the most appropriate strategies for handling the risks in place. For the DMS project, a range of organizational stakeholders will be involved in the analysis so that a more comprehensive mitigation strategy to the identified risks is developed.

How to Construct a Project Risk Management Strategy

After the risks have been identified and analyzed, the next critical step is to put in place adequate risk management strategies. There are various risk management strategies that project managers can employ to manage the identified risks. For the DMS project, the most effective strategy is the mitigation strategy which seeks to achieve two main things. First, mitigation seeks to reduce the likelihood of risk occurrence and secondly, to minimize the adverse impacts of risks if it occurs (Kerzner & Kerzner,2017). This option for the DMS project is guided by Boehm Model of risk management. Considering the nature of the identified risk for the DMS project, mitigation stands to be the most viable risk management strategy that will ensure that the appropriate contingency plans are established to counter the challenges. Being an international technology project, possibilities are that there will be significant risks that the project manager will have identified. It is also essential that the rest of the project team and users of the system are involved in identifying the most appropriate risk management strategy. The project manager needs to be strategic while undertaking this process to ensure that they capture and address all the critical issues identified. Once any gaps are left unresolved, there are possibilities that significant negative consequences will be realized.

The value of theories, concepts, and models in the practice of Project Risk and Procurement Management

Evaluating the impact of risks on a project is a critical step towards realizing the anticipated results. Individuals must appreciate the existence of different theories and models that help in determining the issues and how to handle such problems. Prior discovery facilitates the accurate formation of the mechanisms that can manage the problems identified and enhances the potential outcomes. Theories help towards the development of ideas on the possible course of action that can be taken by an individual when working on a project because numerous factors are evaluated to support the argument.

For the DMS project, the five significant risks that have been identified can be appropriately quantified and prioritized. The use of the option and prospect theories will allow for quantification and prioritization of the risks based on their impacts. Also Boehm Model will provide an appropriate strategy for managing the risk in a vicious cycle. In this way, the necessary resources, finances, people and time will be appropriately assigned to mitigate the risks (Harrison & Lock 2017). In this way, there are possibilities that the project will be appropriately shaped and aligned with its goals and objectives. In this way, the DMS project will be successfully implemented and achieve its intended purpose.

Conclusion

Project management is a critical exercise that calls for proper preparation for individuals to run successful tasks. It is the role of the project manager to conduct a thorough analysis of the potential risks with the aim of establishing the most appropriate strategy that can be employed to ensure new technology is adapted without any operational challenges. The use of theories is an essential step towards realizing the set objectives because they help in identifying the potential threats and development of the solution to the problems discovered by the project manager. Models are designed to offer guidelines on what should be done to handle the issue. Reviewing previous articles help the researcher in streamlining the research topic with the aim of filling the gaps realized after evaluating what other scholars wrote regarding the subject.

Risk Log Table

Hazard/Risk

Cause

Before Controls

Consequences

Response/Mitigation

After Controls

P

I

P ×I

P

I

P ×I

Mismatch of the system with needs

Ineffective customization of the system to fit the local needs of the business.

2

2

4

Specific goals of the project no met and the problem not solved.

Identify the specific features of the traditional documentation and use appropriate people to implement the project

1

2

2

The ineffective document management system

failure to capture the critical concepts of the system,

3

2

6

Inefficiencies of the system resulting in unmet needs

Involve the appropriate processes and the right people to develop the system

2

2

4

System rigidity

Establishment of a rigid system that is difficult to change when need be.

3

3

9

Failure of the project to meet its goals and Unmet business needs

Implement a flexible system and build capacities of people to manage the system

2

2

4

undervaluation of document preparation.

Not adhering to the appropriate process of document preparation

3

4

12

Failure to capture important business details. This decision-making process is impacted

Close monitoring to ensure that all the documentation processes are adhered to.

3

2

6

Lack of focus

Focus on financial benefits rather than the efficiency outcomes of it.

4

3

12

Having in place a system that does not add any value to the business.

Have clear goals about the system.

3

2

6

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