Weekly Discussion Question – (25 points)
Situation — After the program manager and all of the DIT project managers finished reviewing and discussing your updated cost management plan, the topic of project risk came up. The
DIT COO requests that you conduct a meeting with them to further discuss all the circumstances DIT must overcome about project risk in terms of cost and time. During the
meeting, it was clear the project managers understood the technical risks associated with producing a quality product but were out of touch with how project cost management integrates with project risk management.
Assignment — On the Week 9 discussion board, further discuss and share your knowledge based on your research about how project cost management integrates with project risk management. Make a strong defense on how cost management is used in risk management providing some examples of the current project you are working on. Is there a clear connection between performing cost and risk management on the project? What are some of the connections/correlations?
Week 9 Discussion: Risk Management
Risk management is one of the important steps that is taken by all organizations to reduce or minimize the risk that can take place in the project. Project cost management integrates with project risk management by providing the correct options and ways to deal with the risk situation that might take place in the organization as well. The project manager coordinates with risk management and helps to reduce the risk that might take place or can take place in the future as well.
Cost management can be used in risk management and it can be explained well with the example of the current project. In the current working project, the project involved several risks related to the cost which take place because the cost of the project becomes higher and the client is not happy with that and can be said that the risk is that if the client does not like the work, then the orders can also get canceled as well. So here it can be said that cost management is being used in risk management (Friedrich et al. 2021, p.1127). Hence the proper allocation of resources should be required so that it can be known which portion of work requires more than the other part. If the proper allocation of the resources can be done then the cost will ultimately be reduced and the exact amount required can be known accordingly the changes can be done as well.
Yes, it can be said that there is a clear connection between the performing cost and risk management on the project as both are interrelated with each other. If the performing cost will not be properly maintained then the risk of completion of the project will take place (Ahearn, 2018, p.165). It can be said that the project did not get completed within the provided time limits. It can be said that cost risk is one of the issues that take place and cost risk management failures are due to improper cost management which led to risk in the management as well.
References
Ahearn, A. (2018). Herders and hazards: covariate dzud risk and the cost of risk management strategies in a Mongolian subdistrict. Natural Hazards, 92(1), 165-181.
Friedrich, S., Hilmers, T., Chreptun, C., Gosling, E., Jarisch, I., Pretzsch, H., & Knoke, T. (2021). The cost of risk management and multifunctionality in forestry: a simulation approach for a case study area in Southeast Germany. European Journal of Forest Research, 140(5), 1127-1146.
