What is Quantitative Risk Analysis?
Quantitative Risk Analysis (QRA) is a modelling technique that allows a project team to understand the risk that exists within a project and the impact this could have by predicting project schedule and cost outcomes. Our risk models consider both the impact of uncertainty that may exist in the project and the impact that potential risks may have on the outcome of the project.
At Blueprint we offer a tailored risk modelling service with the capability to carry out both Quantitative Schedule Risk Analysis (QSRA) and Quantitative Cost Risk Analysis (QCRA).
We provide a fully flexible service whereby we can either be brought in to carry out a QRA on a specific package of work, or alternatively be available on a call-off basis to carry out the service as and when required (even at short notice).
what are the benefits of quantitative risk analysis?
Experience tells us that very few projects get delivered to their original base estimate as by their very nature, projects contain areas of uncertainty and things can happen that can significantly impact the outcome. In the past, projects have often used rudimentary uplifts to try to account for uncertainty and risk, but these often have little underpinning and do not reflect the intricacies of a specific project.
By carrying out the Risk Analysis, this will allow the project team to gain a better understanding of the risk and uncertainty that may exist within a project. This has 2 key benefits; It allows more realistic schedules and cost estimates to be developed and also provides meaningful data that can be used to make better and more informed decisions.
when is the best time to run a risk model?
There is no right or wrong answer for when the Risk Analysis can be carried out. However, it is usually recommended that they are carried out either at the start of a project, before a baseline is agreed or at key decision points during the delivery of a project.
In addition to the whole project, there may be a time critical piece of work such as an outage, commissioning or blockade of existing infrastructure that needs to be delivered on time. We can carry out risk models on these to forecast the probability of delivering on time and where the project team should be focusing their attention to minimise the chances of an overrun.
how do we deliver the service?
To carry out the Risk Analysis, specialist software is required that uses probabilistic sampling techniques such as Monte Carlo. This is used to model the project and its interactions with uncertainty and risk in order to show their potential impact on project outcomes.
At Blueprint, following an extensive research exercise we have invested in Acumen Risk, a software product developed by Deltek for use in all of our QRA requirements. Acumen Risk is in our opinion the current market leader when it comes to a single product that can carry out both schedule and cost risk models. It also provides an output that can be easily understood by the whole project team.
“Blueprint has provided Cargill with bespoke, timely and effective support for both cost and schedule Quantitative Risk Analysis across multiple projects. The service is professional yet personal, and they have always been able to meet our short-notice and tight deadlines.”
What outputs do we provide?
Through a combination of our experience and toolset we are able to offer customisable outputs depending on a client’s requirements that range from detailed reports through to high level summaries. We are able to provide the same high-quality outputs for both schedule and cost models.
1. RISK REGISTER
Acumen Risk has a simple and graphical Risk Register that as well as ensuring data entry is a relatively quick process, it also provides a professional looking output that some clients may wish to use to present their risk registers.
To support this, we can offer additional services where we can assist you with the development of your risk register and even facilitate risk workshops where required.
2. SCHEDULE QUALITY CHECKS
Before carrying out a Schedule Risk Analysis, we will carry out a detailed quality check of a schedule to ensure it is of sufficient quality to carry out a meaningful risk model. Acumen allows us to carry out detailed quality checks across multiple criteria that could invalidate the risk model such as; missing logic, hard constraints, and invalid actual or forecast dates. The results of these checks can then be fed back to clients.
These quality checks can also be provided as a standalone service where clients are just looking to improve the quality of their schedules.
We also have the ability to help develop and refine schedules ready for modelling utilising our in-house planning capability.
3. SUMMARY RESULTS
As an initial output we will always provide a simple Risk Exposure S Curve that graphically summarises the results. This will show the confidence of delivering the base (deterministic) schedule when uncertainty and risk is factored in as well as providing a confidence level for any given date (or time). It should also be noted that as well as for the whole project this information can be extracted for any chosen activity or milestone within the schedule where multiple key deliverables may exist.
This same Risk Exposure S Curve can also be produced for cost models and again can be presented for the whole project or for any chosen cost element.
4. RISK DRIVERS
In our opinion a standout feature of our risk models are the Risk Driver charts, also known as Tornado Charts. Most risk models produce outputs based on coefficients that mean nothing to many of the project team. We make it easier to understand by clearly showing the number of days or the cost that is being added to the project as a result of risk and uncertainty. The beauty of these outputs is that they are easy to understand and the information can be readily used by stakeholders at all levels to make proactive informed decisions.
For those who are interested in the detail such as project managers it can be presented at an activity level that will help inform them of areas for attention or where existing durations appear insufficient.
5. RISK IMPACTED CRITICAL PATH
The introduction of uncertainty and risk is likely to impact a projects critical path, we are able to show multiple critical paths so that the project team can understand exactly which activities are driving the project end date.
6. APPLICATION OF THE OUTPUTS
Finally, we can also show any desired confidence level duration, start, and finish dates within the schedule so that the impact to any given activity is known. This can then be exported back to the native planning software to implement or record.
This feature is useful on time critical pieces of work such as an outage, commissioning, or blockade of existing infrastructure where teams may be working different shift patterns. As well as showing the impact of risk and uncertainty it will also help understand the resultant impact from different shift patterns or calendars. We have found this especially helpful to project managers in providing justification to bring in additional teams to mitigate potential delays.
Once the client is happy with the outputs, we can assist with the implementation of the results into the base schedule or cost estimate. This may be via prolongation activities or even phased contingency pots by phase, we are flexible in our approach and will choose the option that best suits our clients processes and requirements.
To supplement this, we will provide a comprehensive risk report detailing the QRA results and risk drivers to ensure that the client has the underpinning information and a supporting narrative.
Risk Analysis Report – an easy to understand report with all of the results is provided as part of our service
ADDITIONAL SERVICES
In addition to running the Risk Analysis models, we are also able to assist with a number of additional services:
Process and Procedures
We can assist with the development of new or refinement of existing processes and procedures. Alongside this we can provide clients with templates, work instructions and supplemental training ensuring they are able to get up to speed as smoothly as possible.
Software Selection and Implementation
We have extensive information on the software available that can be used to support the choice of QRA software. This information is available to be shared with clients to underpin their own software selection. We can then help assist with the implementation of the software going forwards including offering presentations to stakeholders to explain the benefits of Quantitative Risk Analysis.
Risk Workshop Facilitation
Running risk management workshops are an important but often time-consuming exercise. At Blueprint we offer a risk workshop facilitation service to enable our clients to hold efficient and productive workshops. Our service covers everything from workshop preparation including selecting the appropriate participants through to acting as the workshop facilitator. We will also ensure the workshops run smoothly and that the objectives are achieved and captured.
To find out more please contact us.
