1-Executive Summary
With the aim of improving customer service and expanding business opportunities GLE has embarked on a project to implement a new Customer Management System (CMS). As this type of project is a new venture for GLE and GLE has little experience in managing projects and even project delivery methodologies, management decided that once the project moved into the design and construction phases it would be wise to hire the services of a Project Advisory team to identify the risks and develop a comprehensive risk assessment plan.
Our first task was to identify the potential risks and then perform qualitative and quantitative risk analysis before developing a risk response plan. The integration of qualitative and quantitative analysis enables an in depth understanding of the project, organisational risk factors and risk events that GLE might encounter (Holzmann and Spiegler, 2011:545) thus enabling an appropriate risk response plan to be developed.
One risk identified had a probability of 90% and should therefore not be treated as a risk but as an event and the cost of that event should be added to the budget.
Our report also recommends mitigation plans for the risks we identified, especially those that have been categorized as high or extreme and the cost of mitigation $8.8M needs to be added to the original budget of 38.2m. Mitigation will not necessarily eliminate the risk but it will reduce the severity of its impact.
Based on the EMV a contingency reserve of $19M has been calculated to cover the remaining risks, the “known unknowns”.
In addition to the contingency reserve we also recommend that a management reserve of $3.13M [5% of the total budget] is added to the budget to cover the cost of any “unknown unknowns’.

Description AUD
Budget (including mitigation plan) $8.8M + $34.7M ($38.2-$3.5M)
Contingency Reserve $19.00M
Management