Risk Paper - How Risks Were Identified, Ranked, and Monitored

I. Introduction

The purpose of this paper is to provide insight into the importance of structuring a risk management plan when working with a new client. A new client should not be treated as a one-time contract but as a possibility for future contracts for your company. When starting a new project for a new client, it important that a formal risk review of that client is done by your company's project management team.

Why is this important? Understanding and knowing your client's needs is very important and detrimental to the success of your project. And will ensure a long-term relationship with the new client, which may potentially lead to new referrals.

As the Business Development Manager for my company, there is nothing worse than hearing "We will never work with your company again." These are words no marketing person wants to hear. It takes a long time to bring in a new client; there are phone calls, meetings, rejections, and promises that we have to make in order to get these new clients to trust us with their projects. So when we hear those words, we have to go back to the project manager and find out what went wrong. How could we have prevented these mistakes and kept our client happy?

This paper will briefly discuss how risks were identified, ranked, and monitored. It will discuss how to check risk factors more closely, evaluate the costs of losing a client, and will include a risk-management plan.

II. Planning

Planning is the first step towards a successful project and a happy client. Working together with your project management team to go over the details about the client's needs and expectations with the project is important. The company has to know what the client wants and how to provide them with their best services. From contract negotiation, scope details and client expectations, these are just tip of the iceberg of items that should be talked about. As automobile maker, Henry Ford once quoted "Coming together is a beginning. Keeping together is progress. Working together is success." (Stirtz, 2008).

The projects length and size will also help to determine any the complexity of the relationship between your company and your new client. A relatively short project will result in satisfied client because there will be less risk issues associated with it. Larger, more complex and longer projects will likely have more risks associated with it and will cause strain between yourself and your new client. There is a greater chance of a successful start to a business relationship if the possibilities of changes are confronted and if a plan is made to minimize the risks of those changes.

III. Identifying and Assessing New Client Risks

Based on my experience with dealing with new clients, I have identified some possible risk factors. They are the following (see table A):

Table A: New Customer Risk Factors

Risk Factor Probability of occurrence Rating (1-10) Impact of occurrence Rating (1-10)

New Client

Relationship

Based on the project management teams assessment of our relationship with this client, what is the probability that we could experience cost, schedule, or performance problems in our execution of this contract? 10 If problems do occur as a result of our relationship with this customer, what could be the extent of the impact on the project success criteria for this contract? 8

Client Communication What is the probability of miscommunication we could experience that would affect the cost of the contract, lead to incorrect scope, or incomplete understanding of client needs? 8 If problems do occur as a result of miscommunication what could be the extent of the impact on the success criteria for this project? 10

Client commitment Based on our team's assessment of the client's level of commitment of resources and budget to this contract, what is the probability that we could experience cost, schedule, or performance problems in our execution of this contract? 5 If problems do occur as a result of the customer's commitment of resources and budget to this contract, what could be the extent of the impact on the success criteria for this contract? 6

Scheduling What is the possibility of incomplete understanding of client's business operation can lead to an underestimate of our company's time to survey their current operations? 2 If problems do occur as a result of scheduling and incomplete understanding of scope what could be the extent of the impact on the success of this contract? 2

Average column rating Average column rating

Customer