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Topics: Benefits Realization, Cost Management, Risk Management
How do you run your Schedule / Cost Simulation?

I was wondering

1 - how you normally go about a simulation for a given project. You do a cost analysis and then a schedule analysis? You do both of them together? It depends on the situation? tell me about it...

For myself, I could say I normally do a schedule (time) exercise and later on I add the cost component, finishing the exercise with a financial analysis in which I can see a risked NPV for the project, for instance. Sometimes it suffices to do the schedule analysis, because we want to focus in this dimension, but I rarely do the cost without a schedule one first.

2 - who does the risk analysis in your organization? Is it the project team or do you have a third person doing that? Can you comment on pros and cons?

In my case, the team does the analysis. And I think that makes us target to all kinds of bias.
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We do cost risk analysis and schedule risk analysis as separate exercises. In our organization the cost analysis is usually performed before the schedule risk. They are both performed by the Project team with a Risk manager and/or Planner as facilitator.

All our large and complex projects go through these processes but smaller and simpler projects do not.

In order to perform the cost and schedule risk at the same time you need a tool that can handle the two dimensions at the same time. Preferably without exporting and importing data back forth between applications.

More interesting I think is how you interpret the results and outcomes of a Cost Risk and Schedule Risk assessment and the actions the project manager together with sponsor/owner wishes to take. Accept increase in budget ranges for P50 and P80? Decrease scope to lower the uncertainty? Allow for more time until delivery and accept a date interval for a delivery milestone date rather than a fixed target date.

Ghilerme, yoiu are working into a very special domain which some things like you stated are very important and mainly the environement and way of planning able the use of that. I have worked into this environment too.Today I am working inside an organization where some initiatives in some of the business deserve that type of analysis and into some other not. Just to asking about my personal experience (past end present) the path that works for my is this (macro level): 1-defining project requirements from product requirements. 2-define scope. 3-create WBS. 4-define activities. 5- define activity sequence. 6-resource estimation. 7-duration estimation. 8-create schedule. 9-create cost and finance. After all that I start to run simulations. By hand in the past, using some automated tools today. It helps to us to define risks too.

Completely agree with Sergio. The creation of the schedule is very important to determine the project timeline and time phased project cost distribution before commencing the stimulation. My organization utilizes PERT risk management software for the simulation. It is done internally by the project team and led mostly by the PM.

Once the project timeline and cost distribution are established, the risk analysis and simulation are usually in this order, cost first followed by the schedule. Although, I have experienced a situation where the schedule risk analysis was done prior to cost risk analysis. I believe it depends on the PM preference.

If you mean the the cost/schedule analysis ( their baselines) at planning phase then in my opinion the cost should be before or parallel processes.
However think about the constrain triangle (should be balance - scope-cost-time).
Risk analysis process used come after that and go to iteration.

Usually project team who used to analyse the individual & overall project risks.
but if the one of the key stakeholder/PM want to share then no problem or by using Expert judgment.


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