Schedule Risk Analysis
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© 2012 Gd Suryawan, CCE CONFIDENTIAL – This information is proprietary to Gd Suryawan, CCE and is to be used, disclosed or reproduced only under written permission from Gd Suryawan, CCE. All rights are reserved Assessing The Likelihood of Meeting Project Schedules/Milestones Thereby Minimizing Potential Delays by Utilizing Schedule Risk Analysis Techniques Gd Suryawan, CCE Project Consultant
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Transcript of Schedule Risk Analysis
© 2012 Gd Suryawan, CCE CONFIDENTIAL – This information is proprietary to Gd Suryawan, CCE and is to be used, disclosed or reproduced only under written permission from Gd Suryawan, CCE. All rights are reserved
Assessing The Likelihood of Meeting Project Schedules/Milestones Thereby Minimizing Potential Delays by Utilizing Schedule Risk Analysis Techniques
Gd Suryawan, CCE
Project Consultant
© 2012 Gd Suryawan, CCE CONFIDENTIAL – This information is proprietary to Gd Suryawan, CCE and is to be used, disclosed or reproduced only under written permission from Gd Suryawan, CCE. All rights are reserved
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Value of Conducting Schedule Risk Analysis
Provide appropriate project outcome, certain range for strategic planning and investment decision
Improve project team alignment and understanding on project uncertainties and risks that may potentially impact the project outcome
Improve project schedule predictability
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Risks and UncertaintiesWhat Are the Odds?
Daily trip from Home to Office 5.7 km (3.5 miles) Start: 7AM
Route: Wika – Pemda – BB – Guntur – Nusantara – Sentosa – Pasir Ridge
Time Record: D to P
Date Duration Weather
March 29 21 mins Normal
March 30 23 mins Normal
March 31 35 mins Raining
April 1 24 mins Normal
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What is Your Predictability Performance?
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How many projects met commitment?
How many projects got delayed?
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How We Can Improve Predictability Performance?
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Better planning by identifying uncertainties and potential risks that may impact the project
Risks and uncertainties are translated as appropriate contingency
Quantitative risk analysis is one of proven risk management methodologies to identify, assess and determine appropriate contingency
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Why do we need SRA
Every single project, in fact, will face unexpected conditions during execution phase improving or reducing project performance
An estimate is a prediction of the expected final duration of a proposed project by nature, it is associated with uncertainty probability of delay or early completion
Accurate estimates to support Management investment decision and planning
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Provide insights to maximize the value of the project opportunity by capturing risks (interdependencies), magnitude of uncertainties and understand both impacts in delivering the project as committed.
Identify and quantify significant risks to the project schedule
Share and understand major risks driving the project Identify and set priorities for risk management and value realization Communicate risks and uncertainties to stakeholders
Determine appropriate levels of contingency
Bottom line: improve schedule predictability
SRA Objectives
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AACE International Total Cost Management Process Map for Risk Management1
1 AACE International. Total Cost Management Framework
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Range Estimating – RP41R-08
Determining uncertainties range – best and worst cases
Identify and examine project uncertainties on each project schedule task durations
Expected Value – RP 44R-08
Expected Value = Probability of Risk Occurring x Impact if It Occurs
Identify and examine project specific risks (risk events)
AACE International Recommended Practices Risk Analysis and Contingency Determination
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Process Requirement
Deterministic or baseline schedule
Documented and understood assumption and baseline schedule Completed schedule assurance – review and validate schedule
Preliminary risk register (if any)
Integrated project team and resources with relevant and related project experience
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Schedule Risk Analysis Process
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SRA Process
Develop Schedule Model select high level, critical and near critical tasks
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Translate the Schedule Model into a spreadsheet
SRA Process
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Team discusses scenario/comments on selected schedule task and determine uncertainties range of each task schedule (Min/P10 & Max/P90)
SRA Process
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Determine specific risks (events) and build-in to related tasks
Expected Value = Probability of Risk Occurring x Impact if It Occurs
Likelihood
Impact
SRA Process
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Run the simulation S-Curve and Tornado
SRA Process
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SRA Result
Probabilistic project schedule – finish date or selected milestones.
Contingency level
Each company has own expectation on level of acceptable risk tolerance (Confidence Level). Contingency is determined by the difference between the acceptable confidence level and project schedule baseline
Sensitivity/Tornado Chart
Represent prioritized risk drivers project team need to develop appropriate moving forward plan to reduce amount of risks impact or likelihood of respected risk drivers
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Important Consideration
Schedule slip potentially impact to cost increase
It is recommended to perform Cost Risk Analysis with built-in schedule duration uncertainties into cost model
Over time, some risks will be realized, other will be retired and some will be discovered: Risk Management never ends2. Realizing this condition, the quantitative risk analysis should be conducted periodically to ensure the validity of all risks information and effectiveness of mitigation plan.
Effective Risk Management plan will improve the likelihood of the project achieving its goals
2 United States Government Accountability Office, GAO-09-3SP
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“We do what we said we’ll do”Plan your Work, Work your Plan
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