Altex Corporation Case Study Essay

1.Why was a risk management plan considered unnecessary? According to the contract award, contracts at that time did not require that a risk management plan be develop while according to the sponsor the risk management plan was not necessary because most of the new weapon systems requirements are established by military personnel who have no sense of reality about what it takes to develop a weapon system based on technology which does not even exist yet. According Kerzner, in the earlier days of the project management on many commercial programs, the majority of project decisions heavily favored cost and schedule.

This was because we knew more about cost and scheduling than we did about the technical risks. But on the other hand it is essential that programs define and implement appropriate risk management and contingency plans to enhance program management effectiveness and provide program managers a key tool to reduce life cycle costs (Kerzner, 2009).

2.Should risk management planning be performed in the proposal stage or after the contract award assuming that it must be done? Risk management is employed throughout the program’s life cycle and should be developed early in the program from the very beginning and addressed continually throughout the program.

Risk management is not a separate program function but part and parcel of the overall program planning and management process. In order to be effective, the risk management process must be recognized as a program management activity, and not something limited to the engineering function. Any program element associated with cost, schedule, and performance has a direct interface with the risk management process. This process does not change fundamentally as the program progresses, although some changes or adjustments might occur as the program progress (Kerzner, 2009).

3.Does the customer have the right to expect the contractor to perform risk analysis and develop a risk management plan if it is not called out as part of the contractual statement of work? The customer has the right to expect the contractor to perform risk analysis and develop a risk management plan as part of the project planning. An effective life cycle risk management process requires a commitment on the part of the program manager and the program office to be successful.

It is essential that Project manager define and implement an appropriate risk management and contingency plans. The customers expect the contractor to be the expert who knows what needs to be done in any project and that is why he has been hired to do the jobs. Risk management will enhance program effectiveness and provide program managers a key tool to reduce life cycle costs (Kerzner, 2009).

5.How effective will the risk management plan be if developed by the project manager in seclusion? There is no way a project manager will have a risk management plan in seclusion. The reason being first, Risk management planning is the process of deciding how to approach and plan the risk management activities of the project.

Secondly the process will include identifying the project charter, current polices, current roles and responsibilities, and the project management plan and, the Risk Management Plan (RMP) strategy needs to be established early in the project and will need to be continually developed throughout the project life cycle. Project risks include business and contractual relationships, cost, funding, management, political, and schedule risks. Other risks are technical, production, and support risks. These entire put together risk management plan has to be part and parcel of the project planning (Kerzner, 2009).

6.Should the customer be allowed to participate in or assist the contractor in developing a risk management plan? Risk management requires early and continual involvement of all of the program team as well as outside help as appropriate. When we are trying to identify the risk we may get our results based on survey of the project and this will involves customer fully. We have to involve the customer since in any case there is a risk then it the risk management program that will support setting realistic cost, schedule, and performance objectives and identifies areas that require special attention. If we don’t involve the customer then that may lead to the customer loosing trust on our company and at the same time we will end up delivering a low quality work (Kerzner, 2009).

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