Decision makers depend on reliable capital project cost and schedule risk analyses to give them confidence in their capital investment decisions.
To deliver reliability, risk analysts need to apply project risk quantification (PRQ) methods that work. That means the PRQ methods should: – be based on empirical research of risk drivers and validated against actual data, – be applicable on all projects– simple and complex, large and small, conceptual or detailed, and good or bad quality estimates and schedules, and – be simple enough that consultants are not needed except for an outside view of strategic projects.
Unfortunately, few methods meet these criteria. Too often methods are purely subjective, and/or ignore the risk drivers that matter. Other methods rigidly tie to risk registers that were never intended for quantification. The discussion will review research on what drives project cost growth, schedule slip and accuracy. It will highlight the concept and importance of “systemic” risk (i.e., qualities of one’s capital project system). It will then review an integrated set of PRQ methods “that work” for projects, programs and portfolios of every description for both owners and contractors. The session is based on the presenter’s book: “Project Risk Quantification: A Practitioner’s Guide to Realistic Cost and Schedule Risk Management”.
This is a must watch session for anyone working in risk management and a great foundation for the whole week. Make sure you sign up!
https://2019.riskawarenessweek.com/talks/project-management/
About John
John Hollmann is author of the book “Project Risk Quantification” (hardcopy via http://www.decisions-books.com or on Kindle via Amazon). John, owner of Validation Estimating, LLC (VE), works with capital program managers and project leaders to improve their cost engineering practices, including cost/schedule risk quantification in support of investment decision making.
John regularly reviews major international estimates in many industries and conducts risk analyses in support of investment decision making and contingency setting. Mr. Hollmann is a frequent speaker at international conferences, has written many papers and was lead author of the AACE® International text; the Total Cost Management (TCM) Framework. John is an Honorary Life Member of AACE® and recipient of their Award of Merit and Lifetime Achievement Awards. He also led development of the AACE® Decision and Risk Management Professional (DRMP) certification.
Prior to founding VE, Mr. Hollmann led the Cost Engineering Committee metrics and research efforts at Independent Project Analysis, Inc. John is a registered Professional Engineer with an MBA, a Certified Cost Professional, a Certified Estimating Professional and Decision and Risk Management Professional.
Check out other risk management books
RISK-ACADEMY offers online courses
Informed Risk Taking
Learn 15 practical steps on integrating risk management into decision making, business processes, organizational culture and other activities!
ISO31000 Integrating Risk Management
Alex Sidorenko, known for his risk management blog http://www.riskacademy.blog, has created a 25-step program to integrate risk management into decision making, core business processes and the overall culture of the organization.
Advanced Risk Governance
This course gives guidance, motivation, critical information, and practical case studies to move beyond traditional risk governance, helping ensure risk management is not a stand-alone process but a change driver for business.
One thought on “REPLAY: Project Risk Quantification: Methods that Work #riskawarenessweek2019”