Schedule analysis what could possibly go wrong - Oracle Primavera Collaborate 14
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This document summarizes the common pitfalls of conducting a schedule risk analysis, as learned from the presenter's experience performing many such analyses. It identifies six key areas where mistakes can occur: issues with the project schedule construction; political challenges; problems with the risk register and interview process; project-specific risks; errors in building the risk model; and misinterpreting the results. Addressing these areas is important to properly execute a risk analysis and realize its benefits in understanding and managing project risks.
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Schedule analysis what could possibly go wrong - Oracle Primavera Collaborate 14
- 1. REMINDER Check in on the COLLABORATE mobile app Schedule Risk Analysis – What Could Possibly Go Wrong? Prepared by: Ian Nicholson, P.Eng. VP Solutions Emerald Associates, Inc. Lessons learned over many years of Schedule Risk Analysis Exercises Session ID#: 15431
- 3. Presenter – Ian Nicholson, P.Eng. VP Solutions, Emerald Associates ■ Oracle Primavera Risk Analysis trainer and consultant ■ Conducted many Schedule Risk Analysis in many industries ■ Started using Risk Analysis on cost estimates in construction projects ■ Emerald is a Oracle Primavera Platinum Partner ▪ Specializing in Primavera ▪ One of two Oracle University Trainers for Risk Analysis in North America ▪ We started working with Risk Analysis as the Canadian Pertmaster reseller in 2001
- 4. Why Conduct Risk Analysis? ■ Helps projects teams and executives understand and manage risks to a project ■ Gets project team discussing the challenges of the project ■ Keeps the project team focused on the right issues ▪ Near critical paths that can come and haunt you ■ Requirement of many company’s gate approval process “Project Risk Assessment is shown to significantly reduce project cost growth” - COAA Alberta Construction Report, 2009
- 5. The Minefield of Schedule Risk Analysis Session ID#: 15431
- 6. What are the common failures encountered during Schedule Risk Analysis? ■ There are six areas that we need to careful with: ▪ Schedule construction issues ▪ Political Issues ▪ Risk Register/documentation issues ▪ Project specific issues ▪ Risk model issues ▪ Results interpretation issues ■ An mistake in any of them can lead to poor results
- 7. Building a schedule suitable for Risk Analysis Session ID#: 15431
- 8. Schedule construction issues ■ Is the schedule poor mechanically? ▪ Bad logic/open ends ▪ High Level/LOE schedules linked SS or FF only ▪ Constraints ■ Schedules that don’t reflect reality ▪ Where did the estimates come from? — Is it Optimistic/Pessimistic ▪ Was the schedule benchmarked before the RA? ■ Too much detail/not enough detail conundrum ▪ When is the right level of detail? ▪ CLT and Correlation
- 9. Schedule construction issues ■ Schedule at different levels of development or from different authors ▪ Do you need to develop a schedule specifically for the risk analysis? ■ Variance between deterministic models in different systems ▪ P6 and RA both come from Oracle but they don’t schedule the same way! “A schedule is garbage in, garbage out. A Risk Analysis is garbage in, toxic waste out!” – David Phillips
- 10. Political Issues in the Schedule Risk Analysis Process Session ID#: 15431
- 11. Political Issues ■ Project team may hide issues that are politically sensitive ■ Can’t alter the schedule – too late in the process to incorporate the results ■ The results could kill the project! ■ Mitigation strategies are not realistic or attainable ■ External Influences not well mapped ▪ No details around permits/approvals ▪ Political Environment ▪ Project influencers
- 12. Interview Issues/Risk Register Issues Session ID#: 15431
- 13. Risk Register/Interview Issues ■ Does the existing register capture all the risks? ■ Agendas vs Information ■ One on One vs Group interviews ▪ Does the PM keep everyone quiet? ■ Three monkeys approach – no interviews, or blinders ■ Risk vs Opportunities ▪ Why do we call it Risk Analysis? ▪ Opportunity Analysis is just as important but often ignored
- 14. Risk Register/Interview Issues ■ Reviewer bias ▪ Who knows the project better than the project team? ▪ Yet the team may be blind to the risks ▪ Reviewer needs to be a facilitator ■ Existing Risk register ▪ Is it valid? ▪ Does it contain schedule risks? ▪ Does it reflect schedule risk, cost risk, safety risk, reputation, etc. ■ Mapping of the risks to the schedule
- 15. Project Specific Challenges Session ID#: 15431
- 16. Challenges of fast track projects ■ Focus naturally falls on engineering, since that is where the detail is ■ Not enough focus on Construction or C&SU even though that is where the majority of the risk is ■ Engineering/Procurement use all the float ■ If you have separate E-P-C schedules, make sure that they are linked and run the analysis one combined project if possible.
- 17. Technology Risk ■ Scale up risk ■ New technology risks ■ New process risk ■ Non-project stakeholder risk ■ C&SU and production ramp up delays ■ Government incentive dates
- 18. Other project specific risks ■ TA’s ▪ Resource availability/congestion ▪ Tight timeframes ■ Pre-fab/Modularized Construction ▪ What happens when you don’t control inventory ▪ Road closures, load limits ■ Offshore ▪ Cost of on-boarding/off boarding ■ Pharmaceuticals ▪ Approval windows ■ Lump Sum or Design Build ▪ Are the contractors’ and owners’ risks the same?
- 19. Building the Risk Model Session ID#: 15431
- 20. Risk Model Issues ■ Risk double dipping ■ Risk Events vs Uncertainty ▪ Risk Register ■ Advanced Modelling ▪ Probabilistic Branching/Links ▪ Task Existence ▪ Resource Risk ■ Low Probability/High Risk Events ▪ Only affect P90-P100, yet can be fatal ■ KISS ▪ Distribution shapes
- 21. Risk Model Issues ■ Levelling required ■ Trying to do schedule risk in a spreadsheet ■ Poor documentation ▪ All risks/uncertainties applied to the plan need to be documented ▪ If the results are not as expected, it can be hard to track down ▪ Probabilistic Branching and Existence cannot be transferred back to P6, so documentation is critical ▪ You may have to go back 6 months later and update the plan ■ Risk analysis is not completed regularly, only when a gate review demands it
- 22. Risk Model Issues ■ Cost vs Schedule Risk ▪ Done separately ▪ Not combined at any point ▪ Yet are completely related “On average, Alberta based projects experienced 19% project cost growth and 17% project schedule growth” – COAA
- 23. Interpreting the Results Session ID#: 15431
- 24. Results Interpretation Issues ■ The results should not be a surprise! ▪ 80% of the value comes before the analysis is run ■ Poor understanding of results ▪ Does it pass the “sniff test”? ■ What is really creating the results ▪ Not using the analysis tools effectively ■ Creating mitigation strategies ▪ Reduce the risk ▪ Mitigate the risk ▪ Transfer the risk ▪ Accept the risk ■ Poor results should be considered an opportunity
- 26. Summary ■ Risk analysis is a great tool, but the process is more important than the software ■ Risk Analysis to be properly executed ▪ Needs repeatable process – see the PMI Risk Maturity Model ▪ Needs Management Buy-in ■ Don’t make it a check box on a form ■ Acknowledgement: Special thanks to David Phillips of Emerald Associates and John Zhao of Statoil for their inputs and insights into this presentation
- 28. Please complete the session evaluation We appreciate your feedback and insight You may complete the session evaluation either on paper or online via the mobile app