Final report e commerce project management risk management in e commerce project

We also discuss the risk management process to ensure that risks are identified,prioritized and tracked throughout the life of the project.. Issue in Project Management...6 Difference be

MINISTRY OF EDUCATION AND TRAINING

UNIVERSITY OF ECONOMICS AND FINANCE

We also discuss the risk management process to ensure that risks are identified,prioritized and tracked throughout the life of the project At the same time, wealso present some examples of how risk management can help achieve projectgoals, enhance reputation, and save costs.

Finally, the report presents a Case Study and applies the above techniques in it

to easily understand the sequence of steps in risk management planning as well

as offer some prevention and mitigation measures risk for the project

ACKNOWLEDGEMENT

We would like to express our gratitude to the Faculty of InformationTechnology, University of Economics and Finance, Ho Chi Minh City forcreating favorable conditions for me to complete this project We would like toexpress our deep gratitude to Mr Tran Thanh Cong, subject lecturer Heenthusiastically supported us to complete this final project and guided usthroughout the course We would like to express our sincere thanks to theteachers of IT Faculty - University of Economics and Finance, Ho Chi MinhCity for teaching and equipping us with valuable knowledge about the subjectE-Commerce Project Management Sincere thanks to family, brothers andsisters, friends who have supported and encouraged us during our study andresearch Through the E-Commerce Project Management course, we havelearned a lot of skills such as teamwork, assessing project risks and coming upwith the best solution We tried very hard to complete the project completely,but due to our limited knowledge and limited experience, we inevitably mademistakes We look forward to receiving the sympathy, comments of teachers,and suggestions from friends so that we can improve more and more

Thank you very much!

TABLE OF CONTENTS

ABSTRACT

ACKNOWLEDGEMENT

TABLE OF CONTENTS

TABLE OF CONTENTS OF FIGURE & TABLES

CHAPTER I: THEORETICAL BASIS

Learning Objectives 6

Definition of Project Risk Management 6

Risk vs Issue in Project Management 6

Difference between “Issues & Risks” 7

The driver of Risk Management Plan 7

The importance of risk management in business 7

CHAPTER II: TYPES OF PROJECT RISK MANAGEMENT

Financial risk management 8

External risk management 9

Performance risk management 9

Schedule risk managementent 10

Operational risk management 11

CHAPTER III: EXAMPLE OF PROJECT RISK MANAGEMENT

Difference between Positive and Negative risk

Example of Positive and Negative risk

CHAPTER IV: PROJECT RISK MANAGEMENT PLANNING & CASE STUDY

Project Risk Management planning

Case study

Identify possible risk events 15

Prepare risk analysis and contingency plans 16

Prioritize the risk 16

Assign a risk owner 19

Monitor risks & communicate project tracking 20

Respond to risk events 21

Assess your risk management plan 21

CHAPTER V: CONCLUSION

References

TABLE OF CONTENTS OF FIGURE Figure 1 Financial risk 9

Figure 2 Schedule risk management 10

Figure 3 Operational risk management 11

Figure 4 Project building process 15

Figure 5 Buble chart 19

Table 1 Example of Positive and Negative risk 13

Table 2 Definitions of risk probability and impacts 17

Table 3 Probability and impact matrix 18

CHAPTER I:

THEORETICAL BASIS

I Learning Objectives

 Understand the concept of risk, risk types, and risk classification

 Master the skills of analyzing and assessing the risks that may occur in theorganization

 Know how to plan for risk management and mitigation, includingeffective risk reduction and prevention methods

 Understand the factors affecting risk management and know how tooptimize the risk management system in the organization

 Capable of assessing and proposing solutions to deal with existing risks,ensuring the safety and stability of the organization's business activities

II Definition of project risk management

Project risk management is the process of identifying, anticipating, mitigating,preventing, and responding to potential risk events that may occur during aproject Project risk refers to anything in the project that doesn’t go as planned.One key thing to note about project risk management is that it’s not all aboutprevention Instead, it’s about acknowledging that things don’t always go asplanned and preparing risk mitigation strategies

III Risk vs issues in project management

 Risk:

A risk is an event that may occur that could affect a project A risk can be

a benefit or a challenge That could happen in the future

 Issue:

An issue in business is a challenging event that has already occurred or iscurrently occurring Even with careful planning, challenges can arise, andproject managers can use problem-solving skills to create positivesolutions

IV Difference between “Issues” & Risks”

 Present focused

 Always negative

 Documented in “Issue register”

 Response will be “Issue

work-around”

 Future focused

 Can be postive or negative

 Documented in “Risk register”

 Response will be done based on

“risk response planning”

V Drivers of The Risk Management Plan

 The main drivers of a risk management plan are given here:

 Early identification of risk and defining its mitigation plan reduces thenegative impact of the risk on the overall project

 One of the main drivers of risk management plan is to reduce thedeviation of planned effort, cost, and schedule The risk managementplan also ensures that specified functionalities are properlyimplemented

VI The importance of risk management in busines

 Maintain the stability of business operations

 Ensure the safety and security of working for the organization

 Protect your business from damage to property, resources and people

 Cut down on remedial costs incurred due to risks

 Creating conditions for businesses to develop and compete sustainably

There are several ways to approach risk management depending on the lens thatyou look through Here are the most common approaches to managing varioustypes of business risk

1 Financial risk management

 Financial risk management is the practice of protecting economic value in

a company by managing financial risks - primarily operational risk,applied signal risk and market risk, underfunding, not enough capital,

 For risk management in general, financial risk management entailsidentifying the source, measuring the risks, and planning to address them

 Financial risk management focuses more on when and how to hedge risk,often using financial instruments to manage risk costly risks

 Example: Lack of capital - The cost of planning large strategic projects,

need to mobilize investment capital for the plan

Figure 1 Financial risk

2 External risk management

 The type of external risk management is the process of identifying,assessing, planning, and managing risks related to external factorsaffecting an organization's operations Examples include governmentpolicy changes, market fluctuations, the impact of natural disasters orcybersecurity threats, new regulations, emergencies, weather events,supply chain issues and market events

 External risk management enables an organization to respond and copewith unforeseen changes and minimize their impact on the organization'sbusiness The strength of external risk management is that it helpsorganizations respond quickly and effectively to uncertain or changingexternal conditions without affecting the organization's profitability orencountering other problems consequential difficulties such as loss ofproperty or damage to the reputation of the organization

 Example: Change in staffing: The project has difficulty recruiting and

retaining staff or project managers, causing the project to be delayed

3 Performance risk management

 Performance risk management is the process of managing risks related to

an organization's performance in decision making and business strategyimplementation This type of risk management focuses on optimizing the

 Example: Lack of information and thorough analysis on factors affecting

the project such as market, customers, competition, and funding

4 Schedule risk management

 Schedule risk is the risk that activities take longer than expected and isoften the result of poor planning It is closely related to cost risk, asschedule delays often increase costs and also delay project outcomes,including benefits

 Delays lead to missed planning milestones and possible loss ofcompetitive advantage Schedule risk leads to cost risk because longerprojects cost more It can also lead to performance risks, due to misseddeadlines for completing the intended task

 Example: Delayed schedule - When the project has a high degree of

complexity, there is a greater chance of items being missed during scopedevelopment This oversight can cause many changes to occur duringproject execution

Figure 2 Schedule risk management

5 Operational risk management

 Operational risk management is the risk of loss due to inefficient or faultyinternal processes, people, systems, or external events that could disruptthe flow of business operations Losses can be direct or indirectfinancially

 Example: A poorly trained employee could lose a sales opportunity, or

indirectly the company's reputation could suffer due to poor customerservice

Figure 3 Operational risk management

CHAPTER III:

EXAMPLES OF PROJECT RISK MANAGEMENT

People tend to associate the word “risk” with a negative impact But in projectrisk management, the term applies to anything that doesn’t go as planned Inother words, it also includes events that can positively affect your project

1 Difference between Positive and Negative risk:

 An opportunity to improve your

project  A threat to your project's success

 Often gives improved results  Results in a negative outcome or

even failure for your project

 Should be seized and built upon  Should be avoided, minimized,

or eliminated

 Managing positive risks can

include exploiting, sharing, and

enhancing the risk

 Managing negative risks caninclude avoiding, transferring, ormitigating the risk

Table 1.1 Difference between Positive and Negative risk

2 Example of Positive and Negative risk:

Table 1 Example of Positive and Negative risk

 Positive risk refers to unplanned events

that benefit ofproject

 Negative risk means that the unplanned event has a detrimental effect on project

 Miscalculation of a project budget could

lead to cost savings or funding additional

projects

 Supplier loss

 Example: If a company completes a

project under budget, it might be because

of the project manager's miscalculation of

the costs or lack of prudence While

miscalculating a project's costs is a risk,

the result in this example is positive,

resulting in the company being able to

reallocate its profits into activities that

support its growth and development

 Example: You could

go past your deadline, surpass your budget, orhave a supplier shut down in the middle of the project

CHAPTER IV:

PROJECT RISK MANAGEMENT

PLANNING & CASE STUDY

I Project risk management process: 7 steps

 Identify positive risk events

 Risk identification

 Prioritize risk

 Assign a risk owner

 Monitor risk and communicate project tracking

 Respond to risk events

 Assess your risk management plan

II Case study:

“FIT ME BEST” APPLICATION ANNOUNCEMENT PROJECT

Slogan: Be yourself in the most perfect version.

You are a project manager for Fashion Brand Zara The brand is working on anew project on the occasion of the upcoming April 30 holiday Due to fundingfrom stakeholders who are investors, the project is underway and will hit themarket in the near future

You have been asked to lead the project to manage, control and plan thisproject

The goal of the project is to sell as many items as possible, gain a 30% increase

in new customers and build brand trust

Based on the concept that was developed, the project team developed a schedule

of the project's progress from concept to project completion

And to control well and ensure that the project goes smoothly, it is indispensablefor the risk management process, that is, the activity of anticipating potentialrisks and planning to respond to it

Figure 4 Project building process

1 Identify positive risk events:

The first step in the planning process is to identify possible risk events beforethe project starts This is sometimes referred to as conducting a

“premortem.”

 Cost less than expected

 Early project completion time

 Need less than of the original plan

2 Risk identification

 After the brainstorming session, it’s time for risk assessment Determinethe likelihood of each risk event happening, the estimated impact size, and

a potential response plan

 Information from past projects can help your team predict risk probabilityand impact

 Plan progress has been delayed

 Cost is higher than expected

 Change steps from plan

 Investors withdraw capital

 The party involved did not complete the project on time

 Project security leaked to competitors

 HR quits

 Specialized personnel are not skilled enough

 Project manager mispredicted completion time

 Data system infected with virus

 This helps you set priorities while looking at the big picture This way,you can understand which risks deserve more attention and which you canreasonably tolerate

 Plan progress has been delayed

 Cost is higher than expected

 Project security leaked to competitors

 Specialized personnel are not skilled enough

 Data system infected with virus

Table 2 Definitions of risk probability and impacts

Definitions of risk probability and impacts: When there is a probability

assessment of a particular risk is 70% in qualitative analysis A risk-averseperson might think 70% is very high, while a risk-averse person might think70% is a low number The definitions of likelihood and impact help standardizethese interpretations, help everyone understand the extent of a risk, and also helpcompare risks across projects

Table 3 Probability and impact matrix

Probability and impact matrix: A grid showing the association between the

likelihood of a risk occurring and its impact on the project's objectives if the riskoccurs Descriptive terms (such as very high, high, medium, low and very low)

or numerical values may be used for likelihood and impact When numericalvalues are used, these values can be multiplied together (Probability x Impact, P

x I) to give a probability and impact score for each risk (risk score), allowing thelevel of risk to be assessed relative priority of individual risks This matrix will

be used together with risk appetite, for example, we will divide those risks with

a risk score higher than 0.24, then classify those risks into a group, need to havesolutions for those risks This is to bring it to the lower risk score zone From0.07 or less, put in a group without giving immediate response plan, just put on

a list to watch later (watchlist) The risk appetite of different projects, they willchoose different risk score thresholds to arrange