Altex Corporation Case Study
Altex Corporation Case Study: PROJ 6302 H1
1. Why was a risk management plan considered unnecessary?
According to the contract award, contracts at that time did not require that a risk management plan be develop while according to the sponsor the risk management plan was not necessary because most of the new weapon systems requirements are established by military personnel who have no sense of reality about what it takes to develop a weapon system based on technology which does not even exist yet. According Kerzner, in the earlier days of the project management on many commercial programs, the majority of project decisions heavily favored cost and schedule. This was because we knew more about cost and scheduling than we did about the technical risks. But on the other hand it is essential that programs define and implement appropriate risk management and contingency plans to enhance program management effectiveness and provide program managers a key tool to reduce life cycle costs (Kerzner, 2009).
2. Should risk management planning be performed in the proposal stage or after the contract award assuming that it must be done?
Risk management is employed throughout the program’s life cycle and should be developed early in the program from the very beginning and addressed continually throughout the program. Risk management is not a separate program function but part and parcel of the overall program planning and management process. In order to be effective, the risk management process must be recognized as a program management activity, and not something limited to the engineering function. Any program element associated with cost, schedule, and performance has a direct interface with the risk management process. This process does not change fundamentally as the program progresses, although some changes or adjustments might occur as the program progress (Kerzner, 2009).
3. Does the customer have the right to expect the contractor to perform risk analysis and
1. Why was a risk management plan considered unnecessary?
According to the contract award, contracts at that time did not require that a risk management plan be develop while according to the sponsor the risk management plan was not necessary because most of the new weapon systems requirements are established by military personnel who have no sense of reality about what it takes to develop a weapon system based on technology which does not even exist yet. According Kerzner, in the earlier days of the project management on many commercial programs, the majority of project decisions heavily favored cost and schedule. This was because we knew more about cost and scheduling than we did about the technical risks. But on the other hand it is essential that programs define and implement appropriate risk management and contingency plans to enhance program management effectiveness and provide program managers a key tool to reduce life cycle costs (Kerzner, 2009).
2. Should risk management planning be performed in the proposal stage or after the contract award assuming that it must be done?
Risk management is employed throughout the program’s life cycle and should be developed early in the program from the very beginning and addressed continually throughout the program. Risk management is not a separate program function but part and parcel of the overall program planning and management process. In order to be effective, the risk management process must be recognized as a program management activity, and not something limited to the engineering function. Any program element associated with cost, schedule, and performance has a direct interface with the risk management process. This process does not change fundamentally as the program progresses, although some changes or adjustments might occur as the program progress (Kerzner, 2009).
3. Does the customer have the right to expect the contractor to perform risk analysis and