Risk management plan for Blue Wolf

Question

Task: A case study for students to practice the contract management concepts.

Answer

Background of the company and the project
The concerned project deals with the risk management plan and the execution and management of the project. For conducting the assignment the Blue Wolf company has been taken into consideration. The concerned company is a global Salesforce consulting agency with its base in New York City, founded in the year of 2005, with total assets of $1.5 billion. The company has recently decided to implement software that is relieved to be beneficial for the company and the services that it provides. The software is a service cloud that enhances the customer relationship management platform to support the services that it provides. It is such software that helps to provide the same amount of service to the customers, anywhere, anytime. The project discusses the delivery methods, financial contract, and risk management plan.

Project delivery method
No matter what project it is it requires a mixture of services, designing, construction, and planning. Therefore, it is important to organize the list of services to execute the project in the most efficient manner. However, before choosing the perfect method that fits well with the project, a few more things must be considered prior to this. These things are the risks that are involved, the owner’s experience and financial assistance, and the schedule. Herein for the project two of the methods have been selected to be the best fit under such a situation as it has been discussed here in the project ofrisk management plan, those are -- Design-Bid-Build (DBB) and Design-Build (DB). The former is the most common and the most popular method of project delivery, as it is quite a cost-effective method. As the designer and the architect of the project work for the owner directly, it has several opportunities for the owner to input things in the project. On the other hand, the later one chosen has become quite popular in recent times. However, unlike the previous process, this process is quite straightforward for the owners. The owner does not receive as much liberty for inputs as in the previous method. In this case, both the process of construction and designing is handled by a similar firm (O’Connor et al., 2016). Therefore, in order to develop and implement the software of service cloud to two concerning processes that have been identified in the risk management plan is best for the project delivery method as it is cheaper and better along with being dynamic.

Financial contract type
It is a deal that is independently arranged to commit to the service provider and the client company. It can be of any type from buying, selling, and repurchasing to leading, or something other than these. These are mainly transactions that have typically participated in the financial markets. The types of contracts that have been identified are the best suited for the concerned project are-- Lump sum contract, guaranteed maximum price contract, cost-plus-fixed-fee contract. For the risk management plan, the best-suited contracts are the lump sum contract which is a traditional contract type and the best one as the company has decided to pay a single large amount to the service provider company to prepare the software that is to be implemented (Burgelman and Vanhoucke, 2018). Since it is a big project that involves quite a fair amount of money, the lump sum agreement will reduce the risk of the owners and the profit amount is expected to be greater. A cost-plus-fixed-fee contract is also a contract that is a perfect fit for the project. This provides an additional fixed fee to the service provider company for the service that is being provided. This has been identified to be a clean and straightforward step that can be taken up. The final cost might be less than the general contract, and turn out to be profitable. Lastly, the guaranteed maximum price contract is such a factor that agrees that the contract will not exceed the sum that has been imputed in the deal signed between the BlueWolf and the software service provider company. However, there always remains a risk for the concerned contract as in case of losses or some mishaps it has to be borne by the company due to miscalculation (Kerzner, 2017). The GMP for risk management plan provides benefits by assisting to transfer some of the risk cost to be bear by the contractee, as long as the contract is valid.

What are the recommendations on the best procurement methods for risk management plan?
The procurement method includes several processes like competitive proposals, request for qualifications, direct purchase, and competitive binding. It is a series of procedures and activities aiming to acquire information technology. The procurement method under such circumstances is grouped into two: implementation and management. Implementation involves requirement setting, acquisition, contract execution. Requirement setting involves the steps like:

Step 1: organizing the project team. Step 2: a cost-benefit analysis. Step 3: look for an alternative for opportunities and risks. Step 4: regulating benefits and Step 5 involves obtaining approvals for the management process. The process of acquisition involves four stages those are: firstly, identifying the strategic solutions. Secondly, creating a communication channel. Thirdly, evaluation of the IT supplier proposal (Abrahamsson et al., 2017). Lastly, negotiate with the vendors. Contract execution involves coordinating and managing the activities that are involved in the contracts.
The management procedure for risk management plan involves-- vendor management and quality management. This involves the overall governance of the project.

• Vendor management involves the taste that is related to the optimization of the relation of the customer company and the service provider company that adds value to the business. Furthermore, asset management involves optimizing and managing the asset all throughout the project life and until the contract is valid (Calefato et al., 2018).
• Another most important factor is quality management as it involves assuring the project is contributing to the continuous improvement and the services that it provides, are serving the purpose of the company. This also involves the quality check of the software that is being developed.

Risk management plan
The risk management plan is a document of the foreseen risks that are related to the project and the impacts it has along with the responses to the risks identified. This is important for the reason that it allows us to identify the risks to eliminate or avoid if possible. There are mainly five steps that are related to the risks management plan. The first part of risk management plan is to identify the risk factors and the reasons behind it. Second is analyzing the risk and how it might affect the business and the operating environment (Niazi et al., 2016). The third is the evaluation of the assessed risk. Fourth is accepting the risk and treating it accordingly. Then finally comes reviewing and monitoring the risk as not all risks can be eliminated.

Risk mitigation plan
According to several studies on risk management plan, it has been revealed that there is no such way and conventional method of risk mitigation. However, there are some strategies that might help in this process which are:

• Risk avoidance
  This is the most strategic and best way as it says to identify and avoid the risk before it could bring in some ill effects. It helps in configuring the project so that the risk factors totally vanish or can be reduced to an acceptable worth (Alqudah and Razali, 2016).
• Risk controlling
  Risk control is the method that controls the risk factors and the consequences as a result of the risk. It can be many like implementing an early warning system and installing a data gathering system to assess the risk and the probability. This will help to take action earlier in the most cost-effective way to benefit the business.
• Risk transfer or sharing
  This is yet another method that is fairly beneficial as it encourages sharing the issue with a third party who can help mitigate the issue like an insurance company (Kim et al., 2016).
• Risk assumption
  This is the most important stage of risk management plan that is assuming the risk factors and their effects. It helps in the assumption of the risks and accepting the risk factors. It is even cost-effective as it assumes the risk and the loss can be effectively managed.

Risk register

(Table showing the risk register)
(Source: Created by the learner)

References
Abrahamsson, P., Salo, O., Ronkainen, J. and Warsta, J., 2017. Agile software development methods: Review and analysis. Risk management planarXiv preprint arXiv:1709.08439.

Alqudah, M. and Razali, R., 2016. A review of scaling agile methods in large software development. International Journal on Advanced Science, Engineering and Information Technology, 6(6), pp.828-837.

Burgelman, J. and Vanhoucke, M., 2018. Maximising the weighted number of activity execution modes in project planning. European Journal of Operational Research, 270(3), pp.999-1013.

Calefato, F., Lanubile, F., Maiorano, F. and Novielli, N., 2018. Sentiment polarity detection for software development. Empirical Software Engineering, 23(3), pp.1352-1382.

Kerzner, H., 2017. Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons.

Kim, M., Zimmermann, T., DeLine, R. and Begel, A., 2016, May. The emerging role of data scientists on software development teams. In 2016 IEEE/ACM 38th International Conference on Software Engineering (ICSE) (pp. 96-107). IEEE.

Niazi, M., Mahmood, S., Alshayeb, M., Riaz, M.R., Faisal, K., Cerpa, N., Khan, S.U. and Richardson, I., 2016. Challenges of project management in global software development: A client-vendor analysis. Information and Software Technology, 80, pp.1-19.

O’Connor, J.T., O’Brien, W.J. and Choi, J.O., 2016. Industrial project execution planning: Modularization versus stick-built. Practice periodical on structural design and construction, 21(1), p.04015014.

Sedano, T., Ralph, P. and Péraire, C., 2017, May. Software development waste. In 2017 IEEE/ACM 39th International Conference on Software Engineering (ICSE) (pp. 130-140).Risk management plan IEEE.