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QRA in industry - Roger Garrini

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The APM Risk SIG presented a Quantitative Risk Analysis event on 11th February 2016 that provided perspectives across the project stakeholder spectrum, from client decision-makers to risk analysts and consultants.

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QRA in industry - Roger Garrini

  1. 1. Quantitative Risk Analysis in Industry Roger Garrini Selex ES Ltd
  2. 2. 2 © 2016 Selex ES Ltd – All rights reserved Roger Garrini • Started working life as a planner for AI Radar in 1976 • Project Manager for non-core radar work – Cars, Laser Radar TDP, Space studies • 1997 Moved to EW Division as a Project Manager • 1998 Responsible for introducing new planning tools and PM processes ( EVM) • 2004/5 Introduced Professional Risk tool • 2012 Finmeccanica Faculty - Risk Management SME • Currently UK IPR Manager Introduction
  3. 3. 3 © 2016 Selex ES Ltd – All rights reserved • Support to Bids • Support to Contracts • Special Cases Summary Summary
  4. 4. © Copyright Selex ES Ltd 2016 All rights reserved Bids
  5. 5. 5 © 2016 Selex ES Ltd – All rights reserved Risk on Bids • Calculate the Project Risk Factor • Low values may mean no analysis is required • Project brainstorms the risks • Often just causes are noted down and worries • Sometimes there is a schedule • Think about opportunities • Scratch them into a tool • Usually a mixture of spreadsheets, direct entry and some who don’t want to • Cost focus • Run the analysis • Done! Bids
  6. 6. 6 © 2016 Selex ES Ltd – All rights reserved Here is the Answer! Or is it?
  7. 7. 7 © 2016 Selex ES Ltd – All rights reserved Garbage in, Gospel Out? • Produced an answer • ...............................but usually fail the review • Check it Out • Listen to the risk bloke • Review the risks – Schedule data • Who did the Estimates? • Are there realistic plans for recovery? Or just a number! • Are the risks focussed on/attached to deliverables and Events in the programme? • Mitigation plans in place? • Risk adjusted schedule or not?
  8. 8. 8 © 2016 Selex ES Ltd – All rights reserved Here is the Answer! Or is it? • Smart Reviewer Questions • How Many Iterations? • Spiky? • Look out for dinosaurs • It says Residual? • Or Pretend? • How Big is the Gap to Current • How much is the mitigation going to cost • Most Likely answer about 250 days? • Calendar or Working time? • Long Tail?
  9. 9. 9 © 2016 Selex ES Ltd – All rights reserved A Cost Risk Distribution • 5000 Iterations, not too spiky, may be stable • Eyes Glaze Over • Most Likely around £100K • Too little, too much • Long Tail?
  10. 10. 10 © 2016 Selex ES Ltd – All rights reserved Start again • Derive a deliverable based schedule on a page • Logic or requirement • It can be a big page • What is our estimating error? • Now try and add the risks to the schedule • Where do I put the risks? • Is this really a risk? • …………………… or what we’re supposed to do? • What really is the impact ? The repair time and cost? Bids
  11. 11. 11 © 2016 Selex ES Ltd – All rights reserved Gantt • First pass shows plan for failure? • Residual or Current? • Risk Optimised Schedule or Original? • Or just the requirement • Where did the Durations come from? • Updated with Progress or the Original? • Progress on Schedule or not • Have the risks been updated in PRC
  12. 12. 12 © 2016 Selex ES Ltd – All rights reserved More Garbage in, Gospel Out? • Why is the Risk Analysis showing 250 days delay • And the Gantt shows 2-3 weeks • Float! • Total Float or Free Float? • There is a strong case for ensuring that the schedule is risk adjusted and includes enough float • Criticality and Cruciality help • So is the Schedule Risk Adjusted? • Do we care about the answer from the Gantt • Or does this show we can meet the deadline after all • 3 weeks delay may be ok if the we aimed to be early
  13. 13. 13 © 2016 Selex ES Ltd – All rights reserved So Gospel In? • Analysis of Schedule Risk picture is a process of work and you need to know where you are • Original derived from logic • Compatible with Bottom-up plans • Has the Risk model been Adjusted for Risk and Uncertainty
  14. 14. 14 © 2016 Selex ES Ltd – All rights reserved Current and residual shown together • Pattern very different for each • Shows Mitigation must be done • Must afford it • Some Low Probability high Impact risks – the tail • Where are we in the process?
  15. 15. 15 © 2016 Selex ES Ltd – All rights reserved Contingency • Do you feel Lucky? • What is the answer? • It Depends!! • Feel lucky and must win, Little or no contingency – low confidence, high risk • Not price sensitive, or feel unlucky high contingency – high confidence • The choice is yours • But…
  16. 16. © Copyright Selex ES Ltd 2016 All rights reserved Contracts
  17. 17. 17 © 2016 Selex ES Ltd – All rights reserved Progress Reviews At least quarterly • Update the risks (should be done monthly) • Adjust the schedule if needed • Update progress against the schedule model • Run the cost analysis against both Current and Residual • Run the schedule analysis • Risk and Contingency • Are we where we think we should be? • Explain the surprises in a calm way! • Progress on mitigation is key and is the controllable variable Contracts
  18. 18. © Copyright Selex ES Ltd 2016 All rights reserved Special Cases
  19. 19. 19 © 2016 Selex ES Ltd – All rights reserved Scenario • Sub sub-contractor on a major aircraft programme • Some slip meant the sub contractor declared we were the critical item • Prime declared we would cause slip of the aircraft integration programme! • Director promised a schedule risk analysis Special Cases
  20. 20. 20 © 2016 Selex ES Ltd – All rights reserved What did we do? • Created a detailed schedule for the three months left in the programme • Produced a list of risks • Some surprises • Main risk - Acceptance based on Prime customer supplied test equipment Only one, replacement lead time, 1 year • Customer demanded 60 day approval lead time from the last documents prior to ATP • Schedule Analysis • One month late without risk – Critical path documentation • 14 months late with the risks
  21. 21. 21 © 2016 Selex ES Ltd – All rights reserved Next Step • A grown-up conversation!! • Finger pointing stopped , all worked to solve the problem • Prime accepted the risk regarding test equipment • Parallel approval of documents implemented • Deletion of 60 day requirement • Revised schedule and risk • New Analysis showed completion– most likely now on time Special Cases
  22. 22. 22 © 2016 Selex ES Ltd – All rights reserved Result • Engineering team completed to best case • Delivered early! • Started time based support contract early • Main programme delayed by some months by Prime not due to us! Special Cases
  23. 23. THANK YOU FOR YOUR ATTENTION Selex ES Ltd Sigma House - Christopher Martin Road, Basildon Essex SS14 3EL Tel: +44 (0) 1268 823400 www.selex-es.com Roger Garrini
  24. 24. This presentation was delivered at an APM event To find out more about upcoming events please visit our website www.apm.org.uk/events

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