Upload
intaver
View
328
Download
4
Embed Size (px)
DESCRIPTION
Project risk analysis methodology and how RiskyProject software can be used for quantitative project risk analysis. For more information how to perform schedule risk analysis using RiskyProject software please visit Intaver Institute web site: http://www.intaver.com. About Intaver Institute. Intaver Institute Inc. develops project risk management and project risk analysis software. Intaver's flagship product is RiskyProject: project risk management software. RiskyProject integrates with Microsoft Project, Oracle Primavera, other project management software or can run standalone. RiskyProject comes in three configurations: RiskyProject Lite, RiskyProject Professional, and RiskyProject Enterprise.
Citation preview
Quantitative Project Risk Analysis
1
Intaver Institute Inc.
303, 6707, Elbow Drive S.W.,
Calgary AB Canada T2V 0E5
www.intaver.com
Agenda
• Introduction• Part One
– Project Decision Framework– Quantitative Analysis within Project Risk Management
• Part Two – Practical Exercises
• Q and A
2
Introduction
Who is Intaver Institute?– Formed 2002– Group of risk, economic, and decision analysis experts– All to some extent were involved in developing software
tools for these fields
3
Problem
• Many IT projects were late or over budget• No readily available tools for the analysis of project schedules,
the provided similar analysis as the ones they were developing for other industries
• Decision analysis processes including quantitative analysis widely used in many industries, but not project management– Many project manager don’t believe in benefits of quantitative
methods– Most methods and tools remain relatively complex, require special
training, and expensive
4
Vision: Quantitative project analysis for the rest of us
1. Develop application– No specialist training required to get started– Easier to use and understand– Relatively inexpensive
2. Provide project decision analysis training and consulting to support application
5© Intaver Institute 2009
Part One: Project Decisions Framework and Quantitative Analysis
• Project Decision Analysis • Quantitative Project Risk Analysis and Management
6
Project Decision Analysis
• Successful projects are the result of good decisions• Structure decision analysis
– Well defined process founded in decision analysis science– Applicable to project management– Provides framework that will improve project decisions
7
Decision Analysis vs. PMBOK
• Decision analysis not in conflict with PMBOK • Can be easily integrated (as needed) into current PM
Risk Analysis Pyramid
8
Quantitative Analysis
Qualitative Analysis
Risk Management Planning
© Intaver Institute 20098
Quantitative Estimates
• Uncertainties – 3pt estimates– Distributions
• Risk events– Chance– Outcome– Result– Moment of risk
9© Intaver Institute 2009
Types of uncertainties
• Duration• Cost • Start and Finish Times • Lags • Rates and Resource Allocation• Entered as 3 pt estimate
10© Intaver Institute 2009
Types of Risk
• Task • Resource• Global (project or local)
11© Intaver Institute 2009
Risks or uncertainties?
• Use uncertainties in cases where you have historical data that is both strong and analogous
• Use uncertainties in cases where you have some historical data and strong expert opinion (experts have consensus)
• Use risk events when little historical data exists to back up expert opinion
• Use risk events on higher risk projects• You can use a combination of risk events and uncertainties
12
Risk or uncertainties
• Risk events are less prone to the effects of human biases and heuristics
• Easier to recall effect of risk events on projects
13
Event Based Analysis
• Risk event estimates less affected by heuristics and biases• Risk events estimates easier to obtain via relative frequency analysis• Event based analysis of causes of project uncertainty
– Sensitivity analysis can be done to identify critical risks– Uncertainties require additional root cause analysis to identify critical risks
14
Modeling Risk Events
• Chance - % chance that the risk will occur• Outcome – relative % or fixed (e.g. % cost increase, Fixed
delay)• Result - 15% • Example Fire: 20% Chance of a Fixed Delay of 14 days• Risks can have mutually exclusive alternatives
15
Monte Carlo Analysis
• Statistical sampling• Runs many simulations of a project that produces probabilistic
distributions of particular results (cost, duration, finish time, etc.)
• Gaining popularity as size and power of hardware and software improve
16
Project Risk Analysis
• Create project schedule• Define project uncertainties• Define project risks• Perform Monte Carlo Simulations• Analyze results
17
RiskyProject Workflow
WBS
Resources
Costs
Risk List
RiskyProject Analysis
Results of Analysis
• Project outcomes with and without risks and uncertainties• Sensitivity analysis• Cost analysis• Identifying critical risks and uncertainties• Success rates
20
Project Summary
21
Main Project Parameters with and
without risks
Probabilistic results
Result Gantt Chart
22
White bars represent original project
schedule (no risks)
Blue bars represent project schedule
with risks
Because of risks, project duration has significantly increased
Detailed Results of Analysis
23
Move the slider to determine the chance that project will be within
budget
Get detailed statistical data
You may export this data to other software
it graphic or text formats
Detailed results can be shown for each tasks or whole project for cost, duration, start time, finish time, and income.
Cost Analysis
You may compare cash flow with (blue
line) and without (red line) risks
Cash flow is generated based on fixed and variables cost and
income associated with tasks and resources
Crucial Tasks
Crucial tasks have the most affect on the project schedule
Green bars represent tasks uncertainties in which almost not affecting project schedule
Crucial tasks for project cost and duration can be different
Critical Risks
Tornado chart shows the risks that have the most affect on
the project schedule
Critical risks need to be mitigated first
Project Dashboard 3x3
3 most important project parameters (cost, duration,
and finish time)
3 most crucial tasks
3 most critical risks
Project Dashboard 3x3 is a condensed view for most important results
of analysis
Risk ChartThe risk chart shows risk uncertainty for tasks versus duration or cost
This task has low duration but high
risk
These tasks have balanced risk versus
duration ratio.
Success Rate
The deadline is causing calculation of
the task in 86% of cases
A task can be canceled if it reaches a task or a project deadline or if it is affected by risk with a “Cancel task” outcome.
This task is affected by one of many risks with impact “Cancel task” Success rate is calculated
based on number of times the task is not
canceled
Tracking
This task is 100% completed (green bar)
For each task at any moment you may enter how much work has been completed
This task is partially completed (yellow
bar)
Risky project automatically adjust probability of risks for
partially completed tasks
Tracking Results
New project forecast is done each time actual project data is entered
Original (baseline) project duration
Actual project duration
Low, base, and high forecast
Intaver Institute
32
Intaver Institute performs project risk management, risk analysis, and decision analysis training and consulting
Download a trial version of RiskyProject at: http://www.intaver.com/index-downloads.html (version 2.1)
White papers, presentations : http://www.intaver.com/index-whitepapers.html
Courses: http://www.intaver.com/riskyproject_training.html
Future Reading
Lev Virine and Michael Trumper
Project Decisions:
The Art and Science
Management Concepts, Vienna, VA, 2007
Lev Virine and Michael Trumper
Project Think:Why Good Managers Make Poor Project Choices
Gower, 2013