Team assignment two

Risk Management for Installing security system for Hilton hotel

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 Certificate of originally

This is to certify that this assignment submitted by group 3 is an outcome of our independent and

original work. We have duly acknowledged all the references from which the ideas and extracts

have been taken. We have given credit to all sources of information used in our assignment by

including citations and contacts in the APA format. The project is free from plagiarism and has

not been submitted elsewhere for publication.

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 Introduction

One of the most critical measures that have been considered before the start of the project

is risk management. This process must be done carefully before starting and during the project.

After defining the project in the previous report, including determining scope, objectives,

requirements, Work Breakdown Structure (WBS), communication planning, budgeting, etc.,

according to the limitations and nature of each part of the work break down structure, project

risks should be defined and managed to prevent the occurrence or response timely. Due to the

technical nature of the project and the study of potential risks and using the past experiences of

the project execution team, some of the most critical internal and external risks have been

identified. Then, in the next step, each risk is evaluated in terms of probability of occurrence and

the degree of impact, and the results are used to develop risk response. Although the project

executive team tries to prevent risks, a contingency plan is developed to respond to the risks at

the time of an occurrence. Risk management budgeting has also been done using project

budgeting data.

Risk Identification

Risk breakdown structure and risk profile have been conducted for having a more

comprehensive understanding of risk and the consequences of failure. The risk breakdown

structure is aligned with the previous project plan, which includes a more detailed illustration of

the risk component. The following paragraph will identify the key internal and external risks, and

a more comprehensive and precise analysis and strategy will be discussed.

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Risk Breakdown Structure

Based on the work breakdown structure (Appendix 1) in the previous project plan, the

risk breakdown structure has been conducted; two external risks and three internal risks will be

illustrated in detail. For the external risks, there might be constant changes in the codes and

policies related to security systems and work standards, which will make an impact on the design

approval process with the whole installation plan and pre-installation (Cather, Morris &

Wilkinson, 2001), if during our project the industrial standard and codes changed so the design

might not be approved, and more adjustment will be needed (Angel et al., 2001). In addition, if

the market price is fluctuated, which will influence the consistency of the budget (Elleuch,

Hachicha & Chabchoub, 2014). The project might redesign to adapt to the new market price and

control the budget, and for the installation process, the selected facilities might cause different

costs. Thus, the installation will also take the risk for this reason.

For the internal risks, the employee who ignores the safety code and gets injured from the

technical operation will be the key risks that impact the installation process; if there are any

unexpected injuries, the schedule might be delayed, and there is a risk that affects the employee

arrangement (Schofield et al., 2015). Another internal risk is the possibility that caused by

communication when there is any process that needs the cross-department collaboration; there

might be the risk in the coordination and miscommunication, this will also impact the efficiency

of the whole project (Liu et al., 2021). The last internal risk is that there might exist a gap

between the design and actual installation situation; when processing the wiring, there have the

possibility of error because the wiring is very complex and experienced construction workers are

needed, if there is any mistake in this process there will impact on the schedule and waste of

resource and labour (Weele & Puil, 2014)

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Figure 1
Risk Breakdown structure

Risk Profile

A risk profile is a set of questions that address the project's traditional sources of

uncertainty. These questions have been designed and refined based on prior experience of a

similar project (Gray & Larson, 2011). The risk profile is prepared and maintained in the project

office under the supervision of the project manager. This profile, which is an essential source for

risk management during the project, is based on past experiences and will be reviewed during the

project if necessary.

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 Table 1
Management
Risk profile
Does the project leader have effective management skills and overview concepts within
the project?

Coordination

Is there any member responsible for the cross-function coordinating the resource and
employee?

Design

Does the installation plan have a realistic design and align with optimistic assumptions?

Work Environment

Do people work in environments with safety guarantees and industry standards?

Budget

Is the estimated cost and time reliable?

Testing

Will testing equipment be available when needed?

Schedule

Are the project arrangement with a reasonable period and acceptable slack?

Resource

Is the resource guaranteed in every step of the project?

Quality

Is quality considered before purchasing facility and during installation?

Staffing

Is every staff experienced in their duty work?

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 Risk Assessment

In the previous part, the internal and external risks of the project were identified. The

important issue in risk management is that the impact and probability of the risks are not the

same. Therefore, risks should be rated and prioritized based on the probability and the degree of

impact so that response can be taken at the appropriate time (Cervone, H.F., 2006).

Table 2 shows the level of impact of risk in the project. Each risk event is rated based on

a five-point scale which 5 means the level of impact is very high, and one means the impact of

the risk event is very low. Table 3 demonstrates the likelihood of risk events. We use the five-

point scale for evaluating the probability of the risk. Detection difficulty is a measure of how

easy it is to detect risk at the right time to take mitigating actions.

Table 1
Risk Impact interpretation

Risk event Rating

Error in the wiring process Very High 5

Inconsistency of budget High 4

Ignoring safety codes and injuries of technicians Medium 3

Ineffective internal communication Medium 3

Change in industrial codes and standards Low 2

Risk event Rating

Error in the wiring process 4 Table

2
Inconsistency of budget 3

Ignoring safety codes and injuries of technicians 3

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Ineffective internal communication 2

Change in industrial codes and standards 1

 Risk likelihood interpretation

After determining the indicators related to risk assessment, a risk assessment form has

been prepared. Table 4 shows the results of the assessments made and each risk's probable time

of occurrence. The risk assessment information helps to take preventive actions at the right time

and at the lowest cost.

Risk assessment form

Table 3
Risk assessment form
Detection
Code Risk event Likelihood Impact Risk effect When
Difficulty
Time, Cost and
1.3 Error in the wiring process 4 5 5 Wiring and installation
Quality

Start-up and throughout the

1.2 Inconsistency of budget 3 4 2 Cost and scope
project
Ignoring safety codes and injuries
1.3.1 3 3 2 Time and cost Wiring and installation
of technicians

Ineffective internal
1 2 3 2 Time and scope Throughout the project
communication

Change in industrial codes and

1.6 1 2 1 Time Inspection
standards

Failure Mode and Effect Analysis (FMEA)

Using the information of the risk assessment form and with three indicators of impact,

probability, and detection difficulty, we developed a risk severity matrix. As you can see in

Figure 2, the range of each project risk is specified in which the error in the wiring process is

considered as the significant risk of the project because the occurrence of this risk can cause cost

and waste of project time.

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 Figure 1
Risk Severity Matrix

Risk Major
5
Risk
Error in the
4 wiring
process
Likelihood

Ignoring Inconsistenc Moderate

3 safety codes y of budget risk
Ineffective
internal
2 communicatio
n
Change in
Minor
1 codes and
standards Risk
1 2 3 4 5

Impact
Response Development

The risk response matrix in the project can help the project team reduce risks and exploit

opportunities (Ben-Davis & Raz, 2001). We attempt to generate risk treatment options and

actions to use existing opportunities and reduce risks by planning risk responses. Table 5 shows

the Risk Response matrix of the project. According to the importance and impact of each threat,

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which was determined in the risk assessment stage, the appropriate response and contingency

plan have been developed.

Table 5
Risk Response matrix

Contingency Fund Estimation

To find the proper estimation regarding contingency funds, there is a need to find an

accurate budget baseline. But the exact amount of five different types of risks related to different

activities is not available in the budgeting plan, which is assessed in the previous paper and is

shown in appendix 2. So, according to the risk assessment table, table 4, and the cost related to

risks that influence the contingency fund estimated in the chart below, the rate of probability of

each risk is computed. In addition, regarding the level of each risk, the impact of risks is

determined, and the total estimated contingency reserve is found in research from Usmani

(2012). The budget table in appendix 2 is the baseline of this estimation.

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 Table 6
Contingency Fund Estimation
EMV
Risk Probability Impact
(Probability*Impact)
Change in codes and
8% 6,000 480
standards
Ineffective internal
15% 9,000 1,350
communication

Ignoring safety codes 23% 9,000 2,070

Inconsistency of
23% 11,500 2,645
budget
Error in the wiring
31% 14,500 4,495
process
The total estimated contingency reserve 11,040
Total estimated cost according to budgeting in
40,758
Appendix 2
Total estimated contingency reserve and cost of the
51,798
project

Buffer Time

In this project, for having better risk management to protect the drawbacks of the delays

related to the probable risks and keep the project on track, extra time is added to estimating the

timeline. This time estimation is called buffer time, the same as a contingency fund, and is

closely related to the percent of likelihood of occurring risks in the project (Schragenhiem &

Ronen, 1989). This buffer-adjusted will not affect the project schedule. The baseline schedule is

predicted that the whole project will be done in 75 days (start date on 01.02.2022 and end date on

15.04.2022). Then, based on the whole impact rate, the extra time should be 20 days and added

to the main timetable. For finding the days that will allocate to each risk, in table 6, the buffer

time is computed and shown.

Table 7
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Buffer Time
Buffer Time (Based on
Risk Probability Impact
20 days)
Change in codes and standards 8% 12% 2.4
Ineffective internal communication 15% 18% 3.6
Ignoring safety codes 23% 18% 3.6
Inconsistency of budget 23% 23% 4.6
Error in the wiring process 31% 29% 5.8
Total estimated buffer time-days 20

Risk Response Control

After defining and assessing the risks and determining the risk response strategies of the

project, we prepared a risk register. The risk register is the foundation of the last stage of risk

management, which is risk control. Risk control includes implementing a risk response strategy,

monitoring start-up events, initiating contingency plans, and monitoring new risks (Kwak &

Stoddard, 2004). Table 5 shows the project risk register. The project manager and supervisors

monitor potential risks as the project progresses. Based on the background and experience of the

project execution team, many potential risks have been anticipated and controlled. Also, various

measures are taken to control and prevent new risks.

According to the company rules and organizational culture, all team members are obliged

to inform the project manager of any errors in the processes. Given that the quality of services

and commitment to schedule is a priority of the company, the timely and explicit announcement

of mistakes or potential risks is not punished, but denial and concealment are unacceptable. Risk

identification and assessment are constantly updated with new information based on the nature of

the project. Risk profiles should be tested to see if the initial responses are correct. Ongoing

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meetings with project stakeholders, including executives and hotel managers, are held to review

and identify potential new risks.

Another important factor in risk response control is the documentation of responsibilities

that have been carefully done in this project. Each identified risk is assigned (or shared) by

mutual agreement of the owner, project manager, and executive team that has line responsibility

for the work package or segment of the project. It is best to have the line person responsible

approve the use of budget reserve funds and monitor their usage rate.

Table 8
Risk Register

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 Persuasive Letter

Date: Feb 27th, 2022

From: Ashkan Alavian, Project Manager at feeling safe CCTV company

To: Hilton Hotel

Subject: Project Risk Management Plan

My purpose in writing this letter as project manager of Feel safe company is to emphasize the

importance of the risk management plan in our project. By using a systematic procedure, we try

to manage the risk via identifying, assessing, and responding to all risks of the project, even

positive or negative.

There are various risks that can impact the results of our project. The most important

categories of risks are as follow:

Cost

Expenses associated with events can have an effect on the budget of the project

Schedule

there is the possibility of unexpected conflicts related to scheduling.

Performance

The risk is that a project will produce results that are not in keeping with its specifications.

Having a good project risk management plan helps us to understand how our project

might go in the wrong way. Developing alternative strategies for budget, schedule, and human

resources problems will facilitate the formulation of Plan B, C, and D.

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The management of risks must be done separately for each project within a program or portfolio.

It is possible for project managers to monitor and manage risks at the program level if they have

a proper organizational structure.

Our company may have many ongoing projects with different sizes and types that can

have various stakeholders. Program management facilitates the management of our projects.

With the plan, we can reduce the number of contingency fundings, focus help on the program's

most imperative risks rather than individual projects, and reduce costs by reducing risk at the

program level. Although project risk management can have costs, it is essential to note that it is

an investment. A profitable project with an effective risk management plan yields the benefits

outlined here.

We recommend that all projects with an estimated cost of more than $10,000 be

performed using this practice based on our research and past pieces of knowledge. Do not

hesitate to ask any questions.

Best Regards,

Ashkan Alavian

Project manager

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 Appendix 1

Work Breakdown Structure (WBS)

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 Appendix 2
Budgeting

Cost items Quantity Unit Cost (CAD) Total Cost (CAD)

Direct cost
Equipment and supplies
ANNKE Security Camera
60 120 7,200
HD
ANNKE 8 Channel DVR 1 1,200 1,200
5 TB Hard Drive with
2 250 500
backup
Camera Wall Mounts 10 30 300
Juniper 12 port switch 1 2,150 2,150
Connectors 12 40 480
Modem 1 200 200
Camera Cables 3 300 900
32 inch LED Monitor 2 225 450
Adapters 13 35  455
Fittings 24 10 240
Labor, Setup, and other costs 
CCTV Setup 60 40 2,400
Intranet Setup 40 40 1,600
Software licenses 2 200 400
Installing technicians’
320 hours 30 9,600
wages
Test Run 2 500 1,000
Overhead costs
Orientation for the whole
3h 30 90
staff
Training for the security
10 h 30 300
staff
Project manager salary -  -  4,000 
Transportation - - 500
Total direct cost -  -  $ 33,965 
General and administrative (G&A) overhead cost
20% of total direct costs $6,793
Total cost $40,758
Profit (35% of total cost) $14,265
Total bid $55,023

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project

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