1. DEMYSTIFYING INTEGRATED COST &
SCHEDULE RISK ANALYSIS
Robert Balaam
APM Risk SIG webinar
Tuesday 14 November 2023

2. OVERVIEW

3. OVERVIEW
• Integrated Cost & Schedule Risk Analysis (ICSRA) provides powerful insight into how a
project’s critical path and cost can deviate when Estimating Uncertainty and Risk are
considered. These insights can be far superior to just using the critical path, or
performing separate Quantitative Schedule Risk Analysis (QSRA) and Quantitative Cost
Risk Analysis (QCRA).
• This talk will provide an overview and demonstrate progressive approaches and
techniques to ICSRA which can be used at various stages throughout a project’s
lifecycle, and using outputs to make better informed decisions and consider additional
actions.
• The session is aimed at project professionals at all levels to demystify a method which is
often thought of as too complicated or unnecessary.
• It is also aimed at corporate and board professionals to express the supplementary
understanding and awareness provided by ICSRA, why it should be executed on major
projects and programmes, and the benefits of implementing ICSRA into projects and
organisations.

4. INTRODUCTION

5. PEOPLE - PLANT - PROCESS - PERFORMANCE - PREDICTION
• London, UK > Europe, USA > Canada > London, UK
• PMO, Project Controls, Risk, & IT Projects for 25+ years
• Management Consultant on many major programs/projects:
• Airports: Major Airport New £4Bn Terminal
• Rail: Major Programmes, Portfolio £100Bn
• Nuclear Power: New £15Bn, Major Refurbishments £7Bn
• Defense: Major Air, Land, & Sea £40Bn
• Football, Football (NFL!), Walking, Cycling, Snooker, Tennis
INTRODUCTION

6. INDUSTRIES & SECTORS

7. BILLION POUND OPPORTUNITIES

8. BASE PLATING
• Scarcity of development space
• Shortage of housing / facilities
• “Air Rights” above railway tracks & stations
• Hudson Yards, New York: $25b, own energy supply!
Euston? HS2? Clapham Junction?
https://www.hudsonyardsnewyork.com/about/building-hudson-yards
https://www.theguardian.com/us-news/2019/mar/14/hudson-yards-new-york-city-open-debut
https://www.imdb.com/title/tt9591896/

9. ICSRA: THE PROBLEM

10. ICSRA: THE PROBLEM
How do Programme / Project Managers
make decisions to provide best value to
mitigate / recover / expedite / buffer the
schedule, including duration / estimating
uncertainty, risk, and schedule-logic
dependencies and constraints?
TIME CONTINGENCY MANAGEMENT

11. ICSRA: THE PROBLEM
• No Process
• No Experience
• Risk mapping takes too long
• Schedule & Cost information misalignment
• Software hard to use
• Not detailed enough
• Too detailed
• Don’t get the right results
• No buy-in from leadership
£ £

12. ICSRA: BENEFITS
• Removes “risk mapping”
• Drives ‘Real’ conversations
• Drives accountability, engagement, behaviours
• Utilises whole team, knowledge, experience
• Greater understanding & awareness of drivers
• Improves Change Management assessments
• Matures schedule and cost estimate
• Joint Confidence Levels (JCL)
• Superior Budget & Cash-Flow forecasting
• Enhanced Change Management & Contingency Management

13. PROJECT BASICS

14. PROJECT BASICS
• Scope: Time / Cost / Quality
• Assumption, Exclusions, Dependencies (AED)
• Work Breakdown Structure (WBS): WBS Dictionary
• Organisational Breakdown Structure (OBS)
• Responsibility Assignment Matrix (RAM): Accountability
• Control Accounts (CA): Performance Measurement
• Work Packages (WP): Company
• Activities: Earned Value Technique
• Resources: People / Plant
• Logic & Constraints: Dependencies / Availability
• Decomposition: (Future) Planning Packages

15. PROJECT BASICS: SCHEDULE
WBS
OBS
CA-1
WP-1.1
WP-1.2
CA-2
WP-2.1
WP-2.2
CA-3
WP-3.1
WP-2.3

16. QUANTITATIVE RISK ANALYSIS
(QRA) BASICS

17. QRA BASICS
• Base Estimate
• Estimate Uncertainty (EU): Duration, Cost
• Risks: Threats / Opportunities: Risk Workshops / Risk Interviews
• Distributions: Single Point, Uniform, Triangular…
• Correlation: Matrix, Factors
• Simulation: Scenarios
• Outputs: S-Curves, Percentiles…
• Contingency: Time & Cost!

18. QUANTITATIVE SCHEDULE
RISK ANALYSIS
(QSRA)

19. QSRA BASICS
• Base Estimate: Schedule
• Duration Uncertainty (DU)
• Risks: Threats / Opportunities
• Distributions: Single Point, Uniform, Triangular…
• Correlation: Matrix, Factors
• Simulation: Scenarios
• Outputs: S-Curves, Percentiles…
• Contingency: Schedule Buffer / Time Risk Allowance

20. QSRA: SCHEDULE QUALITY
• APM Schedule Maturity Assessment
• https://www.apm.org.uk/book-shop/the-scheduling-maturity-model/
• DCMA
• https://www.dcma.mil/
• GAO
• https://www.gao.gov/products/gao-16-89g
• NDIA
• https://www.ndia.org/divisions/ipmd/committees/planning-and-scheduling

21. QSRA: COMPONENTS
Base
Duration
Duration
Uncertainty
Risk
• Duration Uncertainty can have negative element
• Multiple risks can be mapped to one activity
• Risks can be negative (opportunities)
• Correlation also applied to relevant activities
• All elements combine to generate duration for each iteration
• Simulation has x iterations
• Current, Post-Mitigated, Target, simulations

22. QSRA: BASE

23. QSRA Iteration Duration
ID Project Base Duration Base Duration
Rank
Duration
Uncertainty
Risk Iteration
Duration
Iteration
Duration Rank
1 Activity 1 40 12 6 25 71 15
2 Activity 2 20 20 2 18 40 20
3 Activity 3 40 12 11 38 89 10
4 Activity 4 80 3 11 22 113 2
5 Activity 5 60 6 11 -5 66 16
6 Activity 6 90 1 15 4 109 4
7 Activity 7 40 12 17 49 106 5
8 Activity 8 60 6 6 6 72 14
9 Activity 9 50 10 5 -9 46 19
10 Activity 10 80 3 7 12 99 8
11 Activity 11 80 3 17 34 131 1
12 Activity 12 30 18 17 34 81 12
13 Activity 13 40 12 16 47 103 6
14 Activity 14 30 18 2 15 47 18
15 Activity 15 60 6 18 17 95 9
16 Activity 16 40 12 13 47 100 7
17 Activity 17 90 1 4 18 112 3
18 Activity 18 40 12 3 44 87 11
19 Activity 19 50 10 1 15 66 16
20 Activity 20 60 6 5 13 78 13
QSRA: ITERATION 1
Activity Name

24. QSRA: ITERATION 1

25. QSRA Iteration Duration
ID Project Base Duration Base Duration
Rank
Duration
Uncertainty
Risk Iteration
Duration
Iteration
Duration Rank
1 Activity 1 40 12 9 20 69 14
2 Activity 2 20 20 4 5 29 20
3 Activity 3 40 12 10 1 51 18
4 Activity 4 80 3 1 36 117 4
5 Activity 5 60 6 8 31 99 7
6 Activity 6 90 1 5 26 121 3
7 Activity 7 40 12 3 45 88 10
8 Activity 8 60 6 3 5 68 15
9 Activity 9 50 10 2 5 57 17
10 Activity 10 80 3 17 46 143 1
11 Activity 11 80 3 13 49 142 2
12 Activity 12 30 18 11 38 79 11
13 Activity 13 40 12 2 32 74 13
14 Activity 14 30 18 4 45 79 11
15 Activity 15 60 6 3 30 93 9
16 Activity 16 40 12 17 -8 49 19
17 Activity 17 90 1 3 2 95 8
18 Activity 18 40 12 20 1 61 16
19 Activity 19 50 10 10 44 104 6
20 Activity 20 60 6 2 46 108 5
QSRA: ITERATION 2
Activity Name

26. QSRA: ITERATION 2

27. QSRA: S-CURVE
0
10
20
30
40
50
60
70
80
90
100
01/01/2026
01/04/2026
30/06/2026
28/09/2026
27/12/2026
27/03/2027
25/06/2027
23/09/2027
22/12/2027
21/03/2028
19/06/2028
Percentile
End Date
Activity 20: S-Curve
Percentile Date
0 02/01/2026
5 10/05/2026
10 15/07/2026
15 17/08/2026
20 16/09/2026
25 16/10/2026
30 15/11/2026
35 14/12/2026
40 11/01/2027
45 07/02/2027
50 06/03/2027
55 01/04/2027
60 26/04/2027
65 25/05/2027
70 27/06/2027
75 06/08/2027
80 21/09/2027
85 13/11/2027
90 14/01/2028
95 27/03/2028
100 19/06/2028

28. • Key Drivers: Which activities / uncertainty / risks most influence end date
• Criticality Index (CI): Probability activity lies on critical path
• Significance Index (SI): Relative duration importance of an activity
• Schedule Sensitivity Index (SSI): SI * CI
• Cruciality Index (CRI): Duration - Total Duration correlation
• Resource Analysis
QSRA OUTPUTS

29. QUANTITATIVE COST
RISK ANALYSIS
(QCRA)

30. QCRA BASICS
• Base Estimate: Cost Breakdown Structure
• Cost Uncertainty (CU)
• Risks: Threats / Opportunities: Prolongation Risk
• Distributions: Single Point, Uniform, Triangular…
• Correlation: Matrix, Factors
• Simulation: Scenarios
• Outputs: S-Curves, Percentiles…
• Contingency: Project Contingency, Programme Contingency

31. QCRA: COMPONENTS
Base Cost Cost Uncertainty Risk
• Cost Uncertainty can have negative element
• Multiple risks can be mapped to one cost element
• Risks can be negative (opportunities)
• Correlation also applied to relevant cost elements
• All elements combine to generate cost for each iteration
• Simulation has x iterations
• Current, Post-Mitigated, Target, simulations

32. QCRA Iteration Cost
ID Cost Element Base Cost Base Cost Rank Cost Uncertainty Risk Iteration Cost Iteration Cost
Rank
1 Cost Element 1 £ 41,832 17 £ 45,962 £ 77,002 £ 164,796 15
2 Cost Element 2 £ 144,486 2 £ 92,900 £ 125,612 £ 362,998 3
3 Cost Element 3 £ 82,880 10 £ 79,271 £ 153,466 £ 315,617 6
4 Cost Element 4 £ 137,107 4 £ 116,788 £ 82,263 £ 336,158 5
5 Cost Element 5 £ 33,250 19 £ 7,171 £ 22,410 £ 62,831 20
6 Cost Element 6 £ 93,971 8 £ 75,866 £ 139,984 £ 309,821 7
7 Cost Element 7 £ 85,594 9 £ 92,718 £ 94,576 £ 272,888 9
8 Cost Element 8 £ 44,609 16 £ 52,078 £ 81,870 £ 178,557 14
9 Cost Element 9 £ 109,968 5 £ 47,411 £ 123,528 £ 280,907 8
10 Cost Element 10 £ 74,702 12 £ 86,176 £ 102,093 £ 262,971 11
11 Cost Element 11 £ 149,075 1 £ 120,336 £ 290,098 £ 559,509 1
12 Cost Element 12 £ 41,394 18 £ 25,511 £ 48,877 £ 115,782 18
13 Cost Element 13 £ 137,172 3 £ 40,756 £ 228,309 £ 406,237 2
14 Cost Element 14 £ 23,579 20 £ 17,906 £ 33,869 £ 75,354 19
15 Cost Element 15 £ 100,639 7 £ 115,934 £ 130,509 £ 347,082 4
16 Cost Element 16 £ 53,803 14 £ 9,848 £ 96,065 £ 159,716 16
17 Cost Element 17 £ 79,315 11 £ 82,442 £ 105,495 £ 267,252 10
18 Cost Element 18 £ 64,613 13 £ 38,911 £ 119,907 £ 223,431 13
19 Cost Element 19 £ 47,689 15 £ 25,415 £ 65,006 £ 138,110 17
20 Cost Element 20 £ 103,845 6 £ 26,645 £ 124,032 £ 254,522 12
Total £ 1,649,523 £ 1,200,045 £ 2,244,971 £ 5,094,539
QCRA: ITERATION 1

33. QCRA Iteration Cost
ID Cost Element Base Cost Base Cost Rank Cost Uncertainty Risk Iteration Cost Iteration Cost
Rank
1 Cost Element 1 £ 41,832 17 £ 13,655 £ 31,427 £ 86,914 19
2 Cost Element 2 £ 144,486 2 £ 33,341 £ 279,422 £ 457,249 1
3 Cost Element 3 £ 82,880 10 £ 41,928 £ 111,274 £ 236,082 9
4 Cost Element 4 £ 137,107 4 £ 52,469 £ 142,567 £ 332,143 4
5 Cost Element 5 £ 33,250 19 £ 13,294 £ 60,893 £ 107,437 18
6 Cost Element 6 £ 93,971 8 £ 56,496 £ 153,744 £ 304,211 6
7 Cost Element 7 £ 85,594 9 £ 35,405 £ 82,316 £ 203,315 12
8 Cost Element 8 £ 44,609 16 £ 33,984 £ 63,197 £ 141,790 15
9 Cost Element 9 £ 109,968 5 £ 41,671 £ 148,210 £ 299,849 7
10 Cost Element 10 £ 74,702 12 £ 45,369 £ 90,641 £ 210,712 11
11 Cost Element 11 £ 149,075 1 £ 163,404 £ 106,215 £ 418,694 2
12 Cost Element 12 £ 41,394 18 £ 30,262 £ 46,906 £ 118,562 16
13 Cost Element 13 £ 137,172 3 £ 19,610 £ 74,014 £ 230,796 10
14 Cost Element 14 £ 23,579 20 £ 14,240 £ 42,076 £ 79,895 20
15 Cost Element 15 £ 100,639 7 £ 119,400 £ 110,675 £ 330,714 5
16 Cost Element 16 £ 53,803 14 £ 14,478 £ 76,662 £ 144,943 14
17 Cost Element 17 £ 79,315 11 £ 89,682 £ 74,785 £ 243,782 8
18 Cost Element 18 £ 64,613 13 £ 7,906 £ 35,107 £ 107,626 17
19 Cost Element 19 £ 47,689 15 £ 21,187 £ 79,925 £ 148,801 13
20 Cost Element 20 £ 103,845 6 £ 99,033 £ 148,932 £ 351,810 3
Total £ 1,649,523 £ 946,814 £ 1,958,988 £ 4,555,325
QCRA: ITERATION 2

34. 0
10
20
30
40
50
60
70
80
90
100
£
1,000,000
£
1,500,000
£
2,000,000
£
2,500,000
£
3,000,000
£
3,500,000
£
4,000,000
£
4,500,000
£
5,000,000
£
5,500,000
£
6,000,000
£
6,500,000
Percentile
Total Cost
Total Cost S-Curve
Percentile Total Cost
0 £ 1,268,332
5 £ 1,405,076
10 £ 1,491,898
15 £ 1,547,023
20 £ 1,599,523
25 £ 1,649,523
30 £ 1,799,523
35 £ 1,957,023
40 £ 2,122,398
45 £ 2,296,042
50 £ 2,478,368
55 £ 2,669,810
60 £ 2,870,824
65 £ 3,102,996
70 £ 3,371,154
75 £ 3,680,877
80 £ 4,038,606
85 £ 4,451,784
90 £ 4,929,005
95 £ 5,480,194
100 £ 6,116,818
QCRA: S-CURVE

35. INTEGRATED COST &
SCHEDULE RISK ANALYSIS
(ICSRA)

36. ICSRA: APPROACH
• Organisational / PMO culture key
• Schedule and Cost systems driven by WBS & Control Accounts
• Estimating Uncertainty and Risk assigned to schedule
• Schedule decomposed jointly with cost decomposition
• Activities reviewed wholistically – Time, Cost, & Risk together!
• Application Programme Interfaces (APIs) to reduce errors

37. ICSRA: COMPONENTS
Activity
Duration
Duration
Uncertainty
Time Risk
Activity
Cost
Cost
Uncertainty
Cost Risk
• Direct conversations and challenges
• Greater understanding of Estimating Uncertainty & Risk
• Accountable elements > drives ownership!

38. ICSRA: JOINT CONFIDENCE LEVELS
• ISSUE: QSRA & QCRA results don’t reflect combined effects.
• RESULT: Better insight, more accurate estimating & forecasting.

39. ICSRA: CASH FLOW
• ISSUE: Cash flow forecasting is poor.
• RESULT: More accurate forecasting and insight.
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00
Risk Cost Profile by End Date Series1
Series2

40. ICSRA ASSURANCE: SCHEDULE HIERARCHY
• ISSUE: Schedule incomprehensible by stakeholders, difficult for scenarios.
• RESULT: Comparative assessments, additional insight.
Initial
Initial
Design
Detailed
Design
Procurement Construction Commissioning Handover
Summary
Schedule
(by Phase)
WBS
Control
Account
Work
Package
Work Package / Activity
(Key areas as required)

41. ICSRA ASSURANCE: SUMMARY SCHEDULE
• The Summary schedule should be high level, contain 100% of
work, have all phases, key deliverables, key milestones, key
undertakings, key sequences, key paths, identify key
interdependent logic, tactical relationships, be sufficiently
reflective, consistent, and aligned with the detailed schedule.
• Challenge schedule producer with this statement > signature !!
• Tip: Start with detailed Level 3-4 and look for logic across
components.

42. ICSRA ASSURANCE: PRAGMATIC
• ISSUE: Too many risks to map to schedule.
• RESULT: Pragmatic assessment.
• Red risks
• Red & Amber risks
• Red & Amber & ‘Green Total’ risks
• Risks on / near critical path
• Risks on activities with low float
• Highlights key areas > detailed analysis

43. ICSRA: BENEFITS
• Removes “risk mapping”
• Drives ‘Real’ conversations
• Drives accountability, engagement, behaviours
• Utilises whole team, knowledge, experience
• Greater understanding & awareness of drivers
• Improves Change Management assessments
• Matures schedule and cost estimate
• Joint Confidence Levels (JCL)
• Superior Budget & Cash-Flow forecasting
• Enhanced Change Management & Contingency Management

44. THE FUTURE !!

45. FUTURE OUTPUTS
• ISSUE: Outputs don’t provide decision making information.
• RESULT: Powerful decision making insights.
• Most cost-effective activities (current and future) to expedite / reduce the critical path?
• Which activities most likely to increase the overall cost?
• Which activities most likely to increase the critical path and overall cost?
• Where are the biggest cash flow periods and related values – are they achievable?
• Highest Cost Path / Critical Path
• Highest Labour Cost Path / Critical Path
• Highest Materials Cost Path / Critical Path

46. COST EFFECTIVE SCHEDULE MANAGEMENT
• ISSUE: Inability to see where schedule & cost problem areas are at once.
• RESULT: Powerful visualisation of key areas to focus on.

47. RISK ALGORITHMS / AI
• ISSUE: Bias in estimating and lack of historical insight & trending.
• RESULT: Increased insight and forecasting assurance.
• Uses historical information to predict risk
• Can combine data across companies, industries, and countries
• Sometimes just uses text to forecast
• Machine learning provides continuous refinement
• May not suit first-of-a-kind or unique projects

48. RISK ALGORITHMS / AI
• ISSUE: Bias in estimating and lack of historical insight & trending.
• RESULT: Increased insight and forecasting assurance.

49. CONCLUSION

50. CONCLUSION
• Organisational Culture is key!
• Schedule should ALWAYS drive the project
• Decompose Schedule and Cost at the same rate – Schedule first!
• No ‘bad’ simulation – an iterative, engaging, absorbing, insightful, process
• Try to automate – so many potential errors doing manually
• Really look at integrating your schedule, cost, and risk software using APIs
• ICSRA is far more efficient, effective, & insightful, than siloed QSRAs / QCRAs
• It’s a journey not a destination!
EMBRACE.
ENGAGE. EMPOWER.

51. “THE ONLY THING NECESSARY
FOR THE TRIUMPH OF
COST-DRIVEN PROGRAMMES
IS FOR GOOD
RISK, PMO, PROJECT CONTROLS, & PLANNING
PROFESSIONALS TO DO NOTHING."

52. THANK YOU

53. QR CODES
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