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At the PMOZ Conference, Colin Cropley
Director, Project and Risk Management Advisory
Services of
Crescent will present on the following topic:
Sustain your Organisation through Integrated Risk Management and Analysis
Project Management has come a long way since the advent
of the Critical Path Method and increasing implementation of effective project management
described in the PMBoK Guide.
However, an unacceptably high proportion of projects continue
to fail.
Risk Management is a widely recognised but poorly practised
necessity for improving the likelihood of successful project outcomes.
The PMBoK Guide describes Qualitative and Quantitative Risk Analysis and Risk Response
Planning, but doesn’t explain how these processes can be tied together to minimise
project failure.
This presentation explores reasons why project schedules
and estimates are inherently optimistic.
It then describes a practical methodology
now in use for integrating Qualitative and Quantitative Risk Analysis and Risk Response
Planning.
This approach develops realistic project schedules and
estimates and thus minimises project failure due to inadequate cost and schedule
contingencies.
A ranked and treated risk register is developed.
The project estimate is loaded into the project schedule.
All uncertain parameters are ranged.
Risks
from the register are mapped to the appropriate project activities or resources and a Monte Carlo range analysis calculated.
The Management Reserve for both project duration and project
cost are then determined.
Advantages of this approach include:
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that it reflects the riskiness of the project as identified
in the risk register;
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that the contributions of each risk are measurable;
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that the magnitude of the risk provision is determined
by the organisation; and
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that delay effects on project costs are realistically represented
by this approach
The presentation may include live demonstration using the
simulation software – Primavera Risk Manager
TM (Pertmaster), and
RiskIntegrator2™, the
enterprise risk management database application developed to identify and manage
risks through the project lifecycle and map them to tasks in Pertmaster.
Learning Outcomes:
Attendees will understand -
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Reasons why project schedules and estimates tend to be
optimistic;
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How to integrate a project estimate with a project schedule;
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Why this integrated approach is the only realistic way
to estimate the cost consequences of project delays;
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How to integrate the Qualitative Risk Identification, Ranking
and Treatment process with the Quantitative Cost and Schedule Risk Analysis process
to produce an auditable, risk adjusted estimate of cost and time outcomes for a
project.
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