REMINDER Check in on the COLLABORATE mobile app Schedule Risk Analysis – What Could Possibly Go Wrong? Prepared by: Ian Nicholson, P.Eng. VP Solutions Emerald Associates, Inc. Lessons learned over many years of Schedule Risk Analysis Exercises Session ID#: 15431
Transcript
1. REMINDER Check in on the COLLABORATE mobile app Schedule
Risk Analysis What Could Possibly Go Wrong? Prepared by: Ian
Nicholson, P.Eng. VP Solutions Emerald Associates, Inc. Lessons
learned over many years of Schedule Risk Analysis Exercises Session
ID#: 15431
2. Introduction Session ID#: 15431
3. Presenter Ian Nicholson, P.Eng. VP Solutions, Emerald
Associates Oracle Primavera Risk Analysis trainer and consultant
Conducted many Schedule Risk Analysis in many industries Started
using Risk Analysis on cost estimates in construction projects
Emerald is a Oracle Primavera Platinum Partner Specializing in
Primavera One of two Oracle University Trainers for Risk Analysis
in North America We started working with Risk Analysis as the
Canadian Pertmaster reseller in 2001
4. Why Conduct Risk Analysis? Helps projects teams and
executives understand and manage risks to a project Gets project
team discussing the challenges of the project Keeps the project
team focused on the right issues Near critical paths that can come
and haunt you Requirement of many companys gate approval process
Project Risk Assessment is shown to significantly reduce project
cost growth - COAA Alberta Construction Report, 2009
5. The Minefield of Schedule Risk Analysis Session ID#:
15431
6. What are the common failures encountered during Schedule
Risk Analysis? There are six areas that we need to careful with:
Schedule construction issues Political Issues Risk
Register/documentation issues Project specific issues Risk model
issues Results interpretation issues An mistake in any of them can
lead to poor results
7. Building a schedule suitable for Risk Analysis Session ID#:
15431
8. Schedule construction issues Is the schedule poor
mechanically? Bad logic/open ends High Level/LOE schedules linked
SS or FF only Constraints Schedules that dont reflect reality Where
did the estimates come from? Is it Optimistic/Pessimistic Was the
schedule benchmarked before the RA? Too much detail/not enough
detail conundrum When is the right level of detail? CLT and
Correlation
9. Schedule construction issues Schedule at different levels of
development or from different authors Do you need to develop a
schedule specifically for the risk analysis? Variance between
deterministic models in different systems P6 and RA both come from
Oracle but they dont schedule the same way! A schedule is garbage
in, garbage out. A Risk Analysis is garbage in, toxic waste out!
David Phillips
10. Political Issues in the Schedule Risk Analysis Process
Session ID#: 15431
11. Political Issues Project team may hide issues that are
politically sensitive Cant alter the schedule too late in the
process to incorporate the results The results could kill the
project! Mitigation strategies are not realistic or attainable
External Influences not well mapped No details around
permits/approvals Political Environment Project influencers
13. Risk Register/Interview Issues Does the existing register
capture all the risks? Agendas vs Information One on One vs Group
interviews Does the PM keep everyone quiet? Three monkeys approach
no interviews, or blinders Risk vs Opportunities Why do we call it
Risk Analysis? Opportunity Analysis is just as important but often
ignored
14. Risk Register/Interview Issues Reviewer bias Who knows the
project better than the project team? Yet the team may be blind to
the risks Reviewer needs to be a facilitator Existing Risk register
Is it valid? Does it contain schedule risks? Does it reflect
schedule risk, cost risk, safety risk, reputation, etc. Mapping of
the risks to the schedule
15. Project Specific Challenges Session ID#: 15431
16. Challenges of fast track projects Focus naturally falls on
engineering, since that is where the detail is Not enough focus on
Construction or C&SU even though that is where the majority of
the risk is Engineering/Procurement use all the float If you have
separate E-P-C schedules, make sure that they are linked and run
the analysis one combined project if possible.
17. Technology Risk Scale up risk New technology risks New
process risk Non-project stakeholder risk C&SU and production
ramp up delays Government incentive dates
18. Other project specific risks TAs Resource
availability/congestion Tight timeframes Pre-fab/Modularized
Construction What happens when you dont control inventory Road
closures, load limits Offshore Cost of on-boarding/off boarding
Pharmaceuticals Approval windows Lump Sum or Design Build Are the
contractors and owners risks the same?
19. Building the Risk Model Session ID#: 15431
20. Risk Model Issues Risk double dipping Risk Events vs
Uncertainty Risk Register Advanced Modelling Probabilistic
Branching/Links Task Existence Resource Risk Low Probability/High
Risk Events Only affect P90-P100, yet can be fatal KISS
Distribution shapes
21. Risk Model Issues Levelling required Trying to do schedule
risk in a spreadsheet Poor documentation All risks/uncertainties
applied to the plan need to be documented If the results are not as
expected, it can be hard to track down Probabilistic Branching and
Existence cannot be transferred back to P6, so documentation is
critical You may have to go back 6 months later and update the plan
Risk analysis is not completed regularly, only when a gate review
demands it
22. Risk Model Issues Cost vs Schedule Risk Done separately Not
combined at any point Yet are completely related On average,
Alberta based projects experienced 19% project cost growth and 17%
project schedule growth COAA
23. Interpreting the Results Session ID#: 15431
24. Results Interpretation Issues The results should not be a
surprise! 80% of the value comes before the analysis is run Poor
understanding of results Does it pass the sniff test? What is
really creating the results Not using the analysis tools
effectively Creating mitigation strategies Reduce the risk Mitigate
the risk Transfer the risk Accept the risk Poor results should be
considered an opportunity
25. Summary Session ID#: 15431
26. Summary Risk analysis is a great tool, but the process is
more important than the software Risk Analysis to be properly
executed Needs repeatable process see the PMI Risk Maturity Model
Needs Management Buy-in Dont make it a check box on a form
Acknowledgement: Special thanks to David Phillips of Emerald
Associates and John Zhao of Statoil for their inputs and insights
into this presentation
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