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Topics: Construction, Consulting, Risk Management
A question to a Project Risk Manager or anyone else able to answer: How do to take into account the logic relation (predecessor, successor) between activities when you make quantitative risk analysis
I know that exist some software that allow you to make this, but I'd like to know if exist an alternative way, not linked to such softwares.
My doubts are around two themes:
- which information do to ask to the Risk Owner during evaluation in order to make quantitative risk analysis?
- in which way I can evaluate the impact of risk events on the duration of the project (avoiding to overstimate the exstimation)?
Thank you in advance, It's really important for me that someone answer.
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Not sure about the question and whether your concern is with schedule logic or task duration or both. Without software, I'm not too sure how you could evaluate schedule logic other than doing it manually based on the tasks located on the critical or near the critical path. We are introducing 3-Point Estimates (PERT) into our WBS/ scheduling templates with the aim of improving project schedules, as they are typically very optimistic. We are also just now trying to have PMs build risk based schedules, but at the moment we are not there yet. We are fairly good at identifying risks within the project risk register, but again this hasn't necessarily translated into project schedules in terms of possible delays and cost overruns if we also have a cost loaded schedule. I'm interested in seeing what others have to say.
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1 reply by Teresa Ciorciaro
Dec 04, 2019 10:30 AM
Teresa Ciorciaro
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Thank you for answer. My concern was related to how to connect the top risks, reported in the Risk Register, with their own impacts on Schedule and Cost project baseline, in order to make a quantitative analysis (S curve). In the method I'm implementing I'am using @risk, by importing the project's Gantt into excel (it memorizes logic scheme) and by linking each risk event to each activity reported in the Gantt.
I hoped there was an easy way to do this without software.
Without the usage of a sofware, I can link each risk events to an activiy's cost, but can't do the same for the duration analysis.
This approach it's ok for the cost, because are "summable", but it's not true for the duration analysis, because not all the activity in late could lead to a delay of the project. The problem is that sometimes, people I need to interview, are not able to tell me the activities belonging to critical path. For this reason, I'm now asking to my self how to fix this.
I hope I have been clear. Thank you again!
Teresa -

One example of a tool which does this is a Monte Carlo simulation capability within a project scheduling application. @Risk from Palisade is one of the commercial products which is able to do this.

As Steve has indicated, once you provide three point estimates for each activity or at least the activities which present the greatest uncertainty within your network diagram, the tool can run multiple (hundreds or thousands) of scenarios varying the duration of each activity and will provide you with a probability distribution of the expected duration for the overall project or a portion of the project.

Kiron
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1 reply by Teresa Ciorciaro
Dec 04, 2019 10:31 AM
Teresa Ciorciaro
...
Thank you for answer. My concern was related to how to connect the top risks, reported in the Risk Register, with their own impacts on Schedule and Cost project baseline, in order to make a quantitative analysis (S curve). In the method I'm implementing I'am using @risk, by importing the project's Gantt into excel (it memorizes logic scheme) and by linking each risk event to each activity reported in the Gantt.
I hoped there was an easy way to do this without software.
Without the usage of a sofware, I can link each risk events to an activiy's cost, but can't do the same for the duration analysis.
This approach it's ok for the cost, because are "summable", but it's not true for the duration analysis, because not all the activity in late could lead to a delay of the project. The problem is that sometimes, people I need to interview, are not able to tell me the activities belonging to critical path. For this reason, I'm now asking to my self how to fix this.
I hope I have been clear. Thank you again!
Dec 04, 2019 6:44 AM
Replying to Steve Ratkaj
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Not sure about the question and whether your concern is with schedule logic or task duration or both. Without software, I'm not too sure how you could evaluate schedule logic other than doing it manually based on the tasks located on the critical or near the critical path. We are introducing 3-Point Estimates (PERT) into our WBS/ scheduling templates with the aim of improving project schedules, as they are typically very optimistic. We are also just now trying to have PMs build risk based schedules, but at the moment we are not there yet. We are fairly good at identifying risks within the project risk register, but again this hasn't necessarily translated into project schedules in terms of possible delays and cost overruns if we also have a cost loaded schedule. I'm interested in seeing what others have to say.
Thank you for answer. My concern was related to how to connect the top risks, reported in the Risk Register, with their own impacts on Schedule and Cost project baseline, in order to make a quantitative analysis (S curve). In the method I'm implementing I'am using @risk, by importing the project's Gantt into excel (it memorizes logic scheme) and by linking each risk event to each activity reported in the Gantt.
I hoped there was an easy way to do this without software.
Without the usage of a sofware, I can link each risk events to an activiy's cost, but can't do the same for the duration analysis.
This approach it's ok for the cost, because are "summable", but it's not true for the duration analysis, because not all the activity in late could lead to a delay of the project. The problem is that sometimes, people I need to interview, are not able to tell me the activities belonging to critical path. For this reason, I'm now asking to my self how to fix this.
I hope I have been clear. Thank you again!
Dec 04, 2019 7:15 AM
Replying to Kiron Bondale
...
Teresa -

One example of a tool which does this is a Monte Carlo simulation capability within a project scheduling application. @Risk from Palisade is one of the commercial products which is able to do this.

As Steve has indicated, once you provide three point estimates for each activity or at least the activities which present the greatest uncertainty within your network diagram, the tool can run multiple (hundreds or thousands) of scenarios varying the duration of each activity and will provide you with a probability distribution of the expected duration for the overall project or a portion of the project.

Kiron
Thank you for answer. My concern was related to how to connect the top risks, reported in the Risk Register, with their own impacts on Schedule and Cost project baseline, in order to make a quantitative analysis (S curve). In the method I'm implementing I'am using @risk, by importing the project's Gantt into excel (it memorizes logic scheme) and by linking each risk event to each activity reported in the Gantt.
I hoped there was an easy way to do this without software.
Without the usage of a sofware, I can link each risk events to an activiy's cost, but can't do the same for the duration analysis.
This approach it's ok for the cost, because are "summable", but it's not true for the duration analysis, because not all the activity in late could lead to a delay of the project. The problem is that sometimes, people I need to interview, are not able to tell me the activities belonging to critical path. For this reason, I'm now asking to my self how to fix this.
I hope I have been clear. Thank you again!
It can be done, but it is not necessarily easy.

You as the PM need to build the logic into the schedule to figure out what are the critical paths. That done by hand can be very time consuming. The people contributing to the schedule should know what their tasks are, but not how they fit in with everything else.

Once you have one or more critical paths identified, you need a variance for each task such as 100 +/- 10 hours where +/- 10 is the variance. If you add them all up you get a worst case, which normally is not realistic because some things may be longer and others shorter.

The Root Mean Squares method is generally used whenever you are adding up a series of things, each with a variance. That assumes a normal distribution like +/- 10, not +10 or - 2.

You could also figure out the length each task would have to be before it becomes part of the critical path, but that would be a lot of work for dubious benefit.
Mount Carlo simulation may help.

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