Project Risk Management Impact on Project Success

UNDERSTANDING THE IMPACT OF PROJECT RISK MANAGEMENT ON PROJECT

PERFORMANCE

Roque Rabechini Junior, Marly Monteiro de Carvalho

Danish Riaz• Abstract, objectives, model• Introduction,

Salman Ali• Theoretical Background • Types of Uncertainty

Adil Mubarak• Literature Review• Hypothesis, research questions

Junaid Ajmal• Research design • Research design process

Dilawar Hussain• Discussion, Results, SAMPLE• Limitations, sample characteristics

ABOUT

Name Danish Riaz studying BBA at PMAS-AAUR jv GIMS. My PPT consist of Intro, purpose, history, Gap analysis, model. I hope you will be having a bucket of knowledge so stay focused.

Abstract• The goal of this study is to understand the impact of

risk management on project performance. • More it aims to investigate the degree of impact of

risk management practice in Brazilian companies. • The methodological approach involves a survey of 415

projects at different levels of complexity in different industrial sectors in several states of brazil.

• The results demonstrate that adopting risk management practices has a significant positive impact on project success.

IntroductionRisk management has been one of the major concerns ofExecutives and professionals involved with projects today, Especial ly after the financial crisis that shook the world in 2008 and Verification of loss business opportunities for companies are Clear signals that this evidence has become more intense.

One of the first articles that pointed to the importance of r isk management was developed by ibbs and kwak (2000) among project managers from four sectors: telecommunicate manufacturing high technology products, information technology and construction engineering.

ObjectivesThere are some purposes for developing this article. 1. To show lacking of ability to manage risk effectively

and efficiently.2. To show failures of projects according to literature3. To show evidence of relationship of uncertainty and

project risk.4. To show affect of adoption of risk management

practices in project ’s success .5. To show uncertainty and structural complexity

produce the overall difficulties and messiness of the overall project

Gap Analysis- Past Studies Evidence

• The channel tunnel project (1987-1994) was estimated to cost £2,600m cost blown to £4,650 (Flyvbjerg et al. , 2003)

• Nasa’s mars cl imate orbiter was launched. It travelled In space for 9½months before it approached the vicinity of mars. As Soon as it began its ‘ insertion’ maneuver its signal was lost (Shenhar et al . , 2005)

• In 2004, less than a year after opening, terminal 2E roof collapsed at Charles de gaulle airport, ki l l ing four and injuring three. (Uwe)

• The airbus A380 project was initiated in 2000. In 2006 when the Aircraft was in the assembly stage in toulouse, France a Preassembled wiring harness produced in Germany fai led to fit into The airframe. Production was halted, del iveries postponed for 2 years And costs were blown out significantly. (Shore, 2008)

Gap Analysis- what is new 1. Finding Are on the complex level or projects2. Finding are also focused on the manager skills3. Sample is complex but characteristics explained

well4. It also finds implementing of different

management approaches by levels of managers5. Literature is wide and broad

Gap Analysis- Recommendations

Research on risk management in complex projects by using more phenomenological approach.

Identification of barriers to adaption of risk management approaches.

Why are certain project mangers using more than one risk management standard when implementing projects?

Research ModelThe development of this work will be presented in five sec-tions Section 1:- IntroductionSection 2:- Important aspects of literature in risk MGTSection 3:- Includes methodology, emphasizing the kind of study done. Section 4:- Presents the results of the study beginning with the characterization of the sample, according to descriptive analysis Section 5:- Explains the Results, Discussion, Limitations and references.

ABOUT

dan

Name Salman Ali studying BBA at PMAS-AAUR jv GIMS. My PPT consist of theories, concept previous studies and types of uncertainty I hope you will be having a bucket of knowledge so stay focused.

Theoretical Background Worry with risk management became more evident after ibbs and kwak (2000) published their research. However, akintoye and macleod (1997) had already pointed to the effectiveness of r isk management as one of the major concerns of project professionals. wide man (1992), Bernstein (1997) , de Meyer et al . (2002) and Perminova et al. (2008) . Basically they deal with features of r isks and their relationship with uncertainty, their effects and implications for project results. In this l ine of studies, the work of ward and chapman (2003) also stands out due to its singular proposition, which emphasizes the management of uncertainties as a substitute for r isk management, since it presents the broadest approach to the field.

Risk ConceptAnother feature of the risk concept is its dual characteristic from the negative perspective (as a threat), but also from the point of view of positivity (as an opportunity) (Hillson, 2001, ward and chapman, 2003). For him, risks are related to uncertain events that can affect project objectives negatively or positively. For each risk perspective different administrative trategies are demanded.

de Meyer et al. (2002) who proposed four types of uncertainty

1.Variabil ity: random variations, however predictable and controllable around the known objectives of cost and timeframe; 2. Foreseeable uncertainty: a few known factors wil l affect the project in a predictable way al lowing therefore that contingency plans be established to deal with the consequences of an eventual occurrence;3.Unforeseen uncertainty: one or more significant factors that influence the project that cannot be predicted, thus demanding solutions when and if they occur;4. Chaos: completely unpredictable factors entirely invalidate the objectives, planning and approach to the project, requiring its repeated and complete redefinition.

ABOUT

dan

Name Adil Mubarak studying BBA at PMAS-AAUR jv GIMS. My Presentation consist of literature review, hypothesis and research questions I hope you will be having a bucket of knowledge so stay focused.

Literature Reviewuncertainties can be seen as the center of project management concerns. in this respect, ward and chap-man (2003) argue that the entire project risk management should focus on administering uncertainties, since risk is always associated with threats (or opportunities) of uncertain events to the projects.this view is shared by Shenhar and Dvir (2010) who refer to uncertainty as something unknown and risk as something that can occur. according to these authors much of the risk in projects comes from uncertainty, but there are other factors that contribute to project risk, for example, the time-frames and deadlines, costs, scarcity of resources, inadequate abil ities and competencies, among others.

Literature ReviewSeveral articles (PMI, 2008, keelling, 2006) have presented risk management as a series of interconnected processes involving specific techniques and tools. The PMI (2008) proposed six risk management processes: • Risk management planning, • Risk identification, • Qualitative risk analysis, • Quantitative risk analysis, • Risk responses planning and • Risk monitoring and control

Literature ReviewThe special ized l iterature on project r isk management as seen here, provides sufficient elements for understanding the concepts and principles treated. Nonetheless, only more recent studies address the relationship of using this discipl ine with effective project results. The use of r isk management practices in projects related to successful projects can be seen in studies by zwikael and ahn (2011). These authors carried out a study in three countries, (new zealand, israel and japan), with 701 project managers in 7 industrial sectors. The results suggest that r isk management, even when moderate, has a relationship with levels of r isk and project success. The study showed the importance of the project context, both the industry and the country, to levels of project r isk.

HYPOTHESIS(H01): Project risk management does not influence the perception of project success.This hypothesis is intended to verify the relationship between adopting project risk management practices and evaluation the results. (H02): Company revenue does not influence the perception of project success.This hypothesis says that company revenue can be considered a success factor in its projects. The attempt is to verify the relationship between these variables.

HYPOTHESIS(H03): The type of project does not influence the perception of project success.The l i terature on project management does mention the importance of establ ishing a project typology and adapting management according to type.(H04): The presence of a r isk manager does not influence the perception of success in projects.This is an attempt to veri fy the importance of the figure of the r isk manager. The strategy of formulating the nul l hypothesis is l inked to understanding that th is always contains equal ity and that evidence to reject i t wi l l be identified. In this way, and based on analyz ing the hypotheses information to be able to conclude the study was obtained on time and cost and data that refect the opinion of project success, considering them as indicators of scope, customer satisfaction, satisfaction of the team and conformance to qual ity.

Research Questions• Are uncertainty and risk managed differently by project managersOn projects perceived as more complex?• What uncertainty and risk management approaches and processesAre considered to be ‘ in advance’ of general prescribed industry riskManagement standards on projects of high complexity?• On projects perceived to have high complexity, what proportion ofProject managers are implementing uncertainty and riskManagement approaches and processes considered to be ‘ in advance’Of general prescribed industry risk management standards?• On projects of high complexity, does the uncertainty and riskManagement approach and process implemented affect perceivedProject success?

ABOUT

danName Junaid Ajmal studying BBA at PMAS-AAUR jv GIMS. My presentation carries the research design and research process that this study uses I hope you will be having a bucket of knowledge so stay focused.

Research design1. Identify research problems

Roque rabechini junior, marly monteiro de carvalho taken research problem identification at first and foremost step that past researchers adapted also. Success of this study is because they identified right problem at right time and worked on right object.

Research Design2. Develop theoretical backgroundIn this study the next step researches adapts in this they gathered theories, ideas evidences that provides this study full guidance. And they get aware of previous studies.3. Establish Research MethodologyAiming to understand the phenomena of the importance of risk management in projects, quantitative analysis was adopted as an alternative method. By means of a survey involving 415 projects in Brazil.

Research Design4. Define research questions and hypothesisThat step adapted to set questions for study to give answers and set some kind of hypothesis to get relations of two variables.Question could become a hypothesis by making this a statement rather than a question.

Research Design5. Define TermsThen they defined different term that are discussed in this study the purpose was to make readers understand that what these are meant to.For example they defined: risks, uncertainty, projects, phenomenon.

Research Design6. Identify Limitations Of Study

Then Roque rabechini junior, marly monteiro de carvalho pointed that what are disadvantages and lacks in this study basically its to inform reader and give recommendations for studies after.

Research Design7. Determine expected outcomeAs they already have research question or research hypothesis, it is still important to write down outcomes.Your outcomes/objectives are not what you expect from your results - they are broader and detail what you expect from your research.In effect the outcomes are statements of what you hope that your research will achieve without introducing any bias into it.

ABOUT

Name Dilawar Hussain studying BBA at PMAS-AAUR jv GIMS. Here you will get aware of sampling characteristics, finding, discussing, limitations and more so I suggest to stay focused.

SampleThe sample was defined by suitability , therefore, the sample units (projects) and the participants were chosen by ease of access and their availability to respond to the study.Despite using a nonprobability sample, we tried to meet the necessary requirements for a multivariate analysis, using for calculation the minimum size of the sample software g*power 3.0

Characterization of the sampleThe data were obtained from a study undertaken in four Brazilian states with 415 project management professionals in the period 2008 to 2009, including 70.8% men and 29.2% women.

Majority of Professionals • under 35 years of age (63.4%) • Professionals older than 45 years old were 45% • Rest were between 35 and 45 • Information Almost 84% have less than 10 years of

experience. The rest have more than ten.

Characterization of the sample• The sectors of information technology (19%) • Construction engineering (14%) • High technology manufacturing products (10.6%) made the greatest contribution, representing approximately 45% of the sample. According to the opinion of respondents was verified in less than 5% of the questionnaires from the sample. This is, the majority of projects (95%) do not have risk managers playing this role in projects.

Characterization of the sampleIn terms of revenue32.1% of companies involved in the study had revenue over R$1 billion and 38.4% under R$100 million. Revenue between R$100 and 500 million occupied 17.8% of the sample, and 11.7% of companies had between R$500 million and R$1 billion. The average budget for projects was approximately r$44 million, and the average timeframe was 11.6 months.

Results and DiscussionThe first element took into account a set comprised of six factors and three of them have a signifiant impact on the perception of project success ( i) Conceptual understanding and care with uncertainties ( i i ) Utilization of processes, techniques and tools, and ( i i i ) Knowledge of the business. From the practical point of view, paying attention to uncertainties during the project, making use of the risk management techniques and deeply understand the business environment are critical success factors, demanding attention of project managers and risk managers

Results and DiscussionSecond ElementThe presence of a project r isk manager constituted the second signifiant variable to understand the relationship between risk management and project success. This finding, in practice, suggests that project managers should assign a special ized professional to deal with risk management activities. This study can be a source of information for practitioners and academics in order to better understand the risk management requirement but also the state of practice in Brazi l ian companies. It was not possible to confirm the contingent effect of the type of project, as suggested by the l iterature. The contingent effect of industry sector should also be address on a future research agenda.

Research LimitationsThis research showed the limitations inherent to the methodological choices adopted for the field research.• It adopts a non-probability sample • Based on the respondents’ perception• Sample size can lead to unfair results• This is the fist specific study of the project risk

management area in brazil with a sample of this magnitude, producing important insights for new studies and bases for cross country comparison.

Conclusion• Project managers do implement higher level

uncertainty and risk management approaches and processes on projects they perceive as more complex than on projects that they perceive as less complex.

• Most project managers, on projects they perceive to have high levels of complexity, implement uncertainty and risk management approaches and processes at lower then ‘optimal’ levels of general prescribed industry risk management standards.

ConclusionThere is a positive correlation between uncertainty and risk management approach and process levels implemented and perceived project success by project managers on projects that they perceive to be of high complexity. This confirms similar empirical findings in the literature - (raz et al., 2002; zwikael & ahn, 2011).

Risk Management Impact ON PROJECT SUCCESSTha

nk You

THANK YOU YOU ARE REALLY ATTENTIVE

Roque Rabechini Junior, Marly Monteiro de Carvalho Any Question ????

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