Events are an important part of business strategy. Every organization carries some form of events regularly, including marketing promotions, field days, hosting customers, workshops, and others. Bold Ltd is a sales and marketing company, and on many occasions, it holds events for a different purpose. The management understands the risks involved, and any failure to identify risk in advance and mitigate it could potentially lead to significant losses for the company, including loss of a potential customer.
The success of events depends on various factors such as costs, risks, and time, among others. Among these factors, risks are the most crucial. Risks are the expected or unexpected factors that could affect the success of the project by either increasing the budget, timeline, or quality. Risks are just potential issues but become issues when they become realities. Risk management is required to prevent the risks from becoming real issues. Risk management is the process through which risks are identified, classified, prioritized, and handled before they become real issues. Bold Ltd experiences several potential risks when doing business, such as overspending, power outage, bad weather, among others, that may hinder its success. To ensure the project goals are achieved, the risks should be managed. Bold uses the following process for risks identification:
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Risk Identification
This is the process where all the potential risks that may negatively affect the quality, time, or cost of the business are identified. Identification of the risks is a continuous process that depends on the life cycle of the business (Lavanya & Malarvizhi, 2008). In the course of running events, other potential risks may be identified and would be recorded for easier management. The risks in the Bold projects may be readily apparent, while others may require more time to determine.
The team is expected to use various techniques and tools to collect accurate information regarding potential risks. One of the techniques includes brainstorming and using historical data. Brainstorming involves analyzing the project and identifying the areas of shortages where risks may arise. The identified risks are analyzed to classify them, depending on urgency and seriousness. Historical data obtained from other events, analyzing the risks encountered can be accessed to help the team identify the potential risks and how they can be handled. The major risks identified for Bold Ltd business model and causes are shown in the table below:
|
Risk |
Causes |
| Overspending |
Poor budgeting and approximation. Increase in price of commodities. |
| Power Outage |
Bad weather. Defective instruments. |
| Poor quality services |
Incompetent service providers. Poor quality supplies. Unqualified professionals |
| Emergencies |
Fire outbreaks Terrorism |
| Absent client/host |
Fallout with the company Poor transport Emergencies |
The potential risks can be categorized for easier analysis as follow;
| Technical | External | Organizational | Commercial |
|
Power Outage Emergencies Poor quality services |
Weather Too many guests Change in the price of commodities |
Inadequate funds Client not attending event |
Poor delivery by vendors |
Risk Assessment
After identification of the potential risks in the project, the team assesses the risks depending on the probability of happening and potential effects on the project outcome (Price, 2014). The risks are not equal, and some have a higher probability of occurring. Some of the risks may also have a huge impact on the expected output. The project team will assess the probability of the risks occurring and the severity of their effects on the outcome of the project. The table below shows the breakdown of the risks, probability of happening, and severity of the final output on the project.
| Risk | Probability | Cost | Schedule | Scope | Quality | Score |
| Overspending |
25% |
4 | 2 | 1 | 2 | 2.3 |
| Bad weather |
25% |
1 | 3 | 1 | 2 | 2.1 |
| Insufficient resources |
20% |
1 | 1 | 2 | 3 | 1.4 |
| Emergencies |
20% |
1 | 2 | 3 | 3 | 1.8 |
| Poor quality services |
10% |
4 | 3 | 1 | 2 | 1.0 |
| Power outage |
5% |
3 | 3 | 1 | 2 | 0.5 |
| Absent client |
5% |
1 | 4 | 4 | 4 | 1.2 |
The risk of overspending has a high probability of occurring and severe effects on the expected output of the project. It should, therefore, be managed and expertly evaluated to ensure that all factors that could lead to an increase in the cost are handled to prevent the rise in the cost of the project. In-depth market analysis for commodities and other expenditures should be done so that a reasonable budget can be approximated to match the desired budget.
Risk response development
In the risk response development phase, the team will evaluate the highest-ranked risks, which has a higher probability of occurring and pose a big threat to the success of the project. A plan will be devised to deal with the risks to make them manageable to reduce the chances of their occurrence hence reduce the threat to the success of the project (Lavanya & Malarvizhi, 2008). In this case, the team will develop mitigation strategies, preventive measures, and a contingency plan to deal with the risks.
| RISKS | Description | What could go wrong? | Mitigations | Contingency Plans |
| Overspending | The expected budget may be exceeded in the course of the project which may bring financial constraints to the sponsor | Some services, supplies, or venue may be unpaid for which would hinder the marriage from taking place. | - Involving an event organizer to help approximate the budget. | - Comparing the budget with a budget of an approved event organizer. |
| Bad Weather | Sunshine is expected all day, but the weather may change which will be unfavorable for the ceremony | The ceremony will be disrupted, with many guests leaving before time. | Renting an indoor facility where all activities will be done indoors. | - Securing an indoor venue. |
| Power Outage | Various factors such as bad weather may cause a power outage | The entertainment will be cut short which will make the wedding boring | Securing a backup generator to provide power in case of a power outage | Getting a private contractor to supply power during the event. |
| Bride or groom absent | The bride or the bridegroom may fail to turn up for the ceremony. | The wedding will be canceled. | Establishing proper communication with the bride and bridegroom to ensure they show up during the event. | Arrange for transport and provide support individuals to the bride and groom. |
| Poor quality services | Poor quality food may be served. | The guests will be displeased. | Hire a highly qualified and rated team as caterers. | Closely monitor the serving and cooking process to ensure all is well. |
| Emergencies | Emergencies such as fire or terrorism may occur in the ceremony. | The guests will be injured or traumatized. | Ensure all electrical systems are not faulty. Hire a qualified security team. | Request security provision by the police. Have emergency contacts of guests. |
Risk response control
This process involves the execution of the developed risk management plan to handle the risk events as the project progresses (Melnic, 2010). During the development of the project, risks evolve, become clearer, and have a varying effect on the project outcome. When there are changes in the project, the initial cycle to identify, analyze, and respond is repeated. Some of the identified risks normally resurface, while others do not. The project development team will identify the repeated risk and manage it using the initial strategy. New risks must be managed individually by creating mitigation and contingency plans to deal with them. The team members should update the risk register to include the new changes encountered (Ben-David & Raz, 2001). The risk register therefore grows and becomes dynamic due to the frequent updates.
References
Ben-David, I., & Raz, T. (2001). An integrated approach for risk response development in project planning. Journal of the Operational Research Society , 14-25.
Lavanya, N., & Malarvizhi, T. (2008). Risk analysis and management: A vital key to effective project management. PMI® Global Congress, 2008. Asia Pacific, Sydney, New South Wales, Australia. Newtown Square, PA: Project Management Institute.
Melnic, A. (2010). Risk Response Strategies in Project Management. Metalurgia International , 74-78.
Price, M. (2014). Guidebook for Successfully Assessing and Managing Risks for Airport Capital and Maintenance Projects. Pickerington, OH: The National Academies Press.
