082213 Risk Concepts, Philosophies, Methods and Approaches

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The term risk and its attributes seem simple enough yet can be a lot bigger & complex than meets the ordinary mind. Human comprehension is infinitely varied, limited only by the individual's imagination and creativity in his/her pursuit to understand the risk concept. It will not be a surprise to me that out of the many recent great exchanges comes some new governing law on Risk Management.

I consider self-reflection is an excellent approach to learning and that is why I hope you can be an active participant as you get you get yourself personally involved in this learning experience. You are encouraged to contribute experiences that promote discussion and understanding of risk concepts, philosophies, methods and approaches.

Happy reading everyone!

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082213 Risk Concepts, Philosophies, Methods and Approaches

  1. 1. 082213-Risk Concepts, Philosophies, Methods and Approaches Page 1 of 32 Author: Rufran C. Frago, P. Eng., PMP, CCP, PMI-RMP Risk Concepts, Philosophies, Methods and Approaches
  2. 2. 082213-Risk Concepts, Philosophies, Methods and Approaches Page 2 of 32 Author: Rufran C. Frago, P. Eng., PMP, CCP, PMI-RMP Risk Concepts, Philosophies, Methods and Approaches TABLE OF CONTENTS 1. Introduction............................................................................................................................. 6 2. Abbreviation and Acronyms.................................................................................................. 7 3. Risk relativity .......................................................................................................................... 8 4. Risk is not absolute ................................................................................................................. 8 5. Risk, the three blind managers and the elephant................................................................. 9 6. Zooming out and zooming in ............................................................................................... 10 7. Can risk be neutral? ............................................................................................................. 10 8. What is it that we do every day?.......................................................................................... 10 9. Risks and objectives.............................................................................................................. 11 10. Chaos theory and risks ..................................................................................................... 11 11. Risks and the Fable-“The Mouse and the Mouse Trap”............................................... 11 12. Fabled conclusion.............................................................................................................. 13 13. Approach to duration ranging ......................................................................................... 13 13.1. Growing opinion on ranges........................................................................................... 14 13.2. Relative values between your 3-point estimate ........................................................... 14 13.3. Three point references................................................................................................... 15 13.4. Avoid double-dipping.................................................................................................... 15 14. Quality of input data......................................................................................................... 15 14.1. Validating the project schedule.................................................................................... 16 14.2. Issue on calendars.......................................................................................................... 16 14.3. Baseline schedule ........................................................................................................... 17 15. Preparing the schedule risk model .................................................................................. 17
  3. 3. 082213-Risk Concepts, Philosophies, Methods and Approaches Page 3 of 32 Author: Rufran C. Frago, P. Eng., PMP, CCP, PMI-RMP Risk Concepts, Philosophies, Methods and Approaches 15.1. Use of schedule filter...................................................................................................... 17 15.2. Issue on using static paths............................................................................................. 18 15.3. Very high level summary (VHLS)................................................................................ 18 15.4. Medium level summary (MLS) .................................................................................... 19 15.5. Reservation on using summary model......................................................................... 20 15.6. Fit for purpose model.................................................................................................... 20 16. Two types of schedule risks .............................................................................................. 21 17. Proponents of VHLS schedule model.............................................................................. 21 17.1. Proponent #1 replied:.................................................................................................... 21 17.2. Proponent #2 replied:.................................................................................................... 21 17.3. Proponent #3 replied:.................................................................................................... 22 17.4. Proponent #4 replied:.................................................................................................... 22 18. Why do I stay away from VHLS when it comes to mega-projects? ............................. 22 18.1. Lost logics ....................................................................................................................... 22 18.2. Forced reliance on lags and constraints ...................................................................... 23 18.3. The higher the level, the greater the unknown ........................................................... 23 18.4. Contracts and level of schedule.................................................................................... 24 18.5. The schedule owner should provide the summary model.......................................... 24 18.6. Using the WBS in quantification instead of the summary model .................. 25 19. Optimum size of the schedule for SQRA ........................................................................ 25 20. Running SQRA using the detailed schedule ................................................................... 25 21. Integrated Cost and Schedule Quantitative Risk Analysis (ICSQRA) ........................ 26 22. Run multiple risk models.................................................................................................. 26 23. Deterministic schedule...................................................................................................... 26
  4. 4. 082213-Risk Concepts, Philosophies, Methods and Approaches Page 4 of 32 Author: Rufran C. Frago, P. Eng., PMP, CCP, PMI-RMP Risk Concepts, Philosophies, Methods and Approaches 24. Political dates..................................................................................................................... 27 24.1. Which schedule to use? ................................................................................................. 27 24.2. Schedule contingency versus political date ................................................................. 28 25. BIBLIOGRAPHY ............................................................................................................. 29 26. INDEX................................................................................................................................ 30
  5. 5. 082213-Risk Concepts, Philosophies, Methods and Approaches Page 5 of 32 Author: Rufran C. Frago, P. Eng., PMP, CCP, PMI-RMP Risk Concepts, Philosophies, Methods and Approaches
  6. 6. 082213-Risk Concepts, Philosophies, Methods and Approaches Page 6 of 32 Author: Rufran C. Frago, P. Eng., PMP, CCP, PMI-RMP Risk Concepts, Philosophies, Methods and Approaches Sorry, the article you are looking was removed. You will find a more detailed discussion about the subject and other related topics in the paperback edition of the book "Risk- based Management in the World of Threats and Opportunities: A Project Controls Perspective." It is also available in Amazon’s Kindle edition. Copy and paste the following on your browser. http://www.amazon.com/RUFRAN-C.-FRAGO-PMI- RMP/e/B01055MPYI http://www.amazon.com/dp/B0104OFUDI/ref=rdr_kindle_ ext_tmb https://www.linkedin.com/pulse/risk-based-management- world-threats-opportunities-rufran?trk=prof-post Cheers, Rufran (070615) Sorry, the article you were looking for was removed.

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