Schedule Risk
Analysis
(SRA)
Pedram Daneshmand
Associate Director
Blue Visions Management Pty Ltd
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Content
Project Time Management
Risk & Opportunities
Project Risk Management
Schedule Risk Analysis
Results Review
Action Plan
Slide 2 of 18
Project Time Management
History
Every project must be managed against a
schedule;
Project Scheduling has been around a
long time;
Scheduling is one of the most widely
practiced project management disciplines
(Archibald and Villoria 1967).
Project Time Management includes the
processes required to accomplish timely
completion of the project (PMBOK, 2004).
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Project Time Management
Process
Activity Definition
Activity Sequencing (logic)
Activity Resource Estimating
Activity Duration Estimating
Schedule Development
Schedule Control
(PMBOK, 2004)
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Project Time Management
Schedule Development
The Schedule Development process
includes selecting a scheduling Method,
scheduling Tool, incorporating project
specific data within that scheduling tool
to develop project specific schedule
Model, and generating Project Schedule.
(PMI-PS for Scheduling, 2007)
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Schedule Development
Methods
Logic-based Scheduling Methods (LSM)
Deterministic Techniques
E.g. Critical Path Method (CPM), Resource
Optimisation, Critical Chain Method (CCM), etc.
Stochastic Techniques
E.g. Probabilistic Evaluation and Review Technique
(PERT), PNET, Monte Carlo Simulation (MCS), etc.
Repetitive Scheduling Methods (RSM)
Line of Balance (LOB)
Flowline Method
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Schedule Development
Inputs
Planners develop the project schedule by
using:
Available templates;
Available
quantities,
resources
and
productivity rates;
Available work/scope statements;
Available construction logic; and
these add uncertainties to schedule
Other All
assumptions/documents
e.g. calendars,
and reduce the confidence level. What
PMP, etc.
about risks and opportunities in the
schedule?
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Schedule Development
Outputs
The outputs of Schedule Development
process are:
(Deterministic)
(Deterministic)
(Deterministic)
(Deterministic)
Project Schedule;
Schedule Model Data
Schedule Baseline
Resource Requirements
With all those uncertainties in the inputs
and the possible risks and opportunities in
the schedule, the question is, how
confident we are in this schedule?
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Schedule Development
Major Challenges
Uncertainties due to assumptions;
Logic, constraints, resources, calendars
and activity durations are not always
clear and agreed;
What-If Scenarios; and
Risks and Opportunities
To have a realistic schedule, Schedule
Development process should be improved
by using Schedule Risk Analysis. In other
words Project Time Management and
Project Risk Management need to
be
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Schedule Development
Risks & Opportunities
Every schedule has
uncertainties/assumptions.
EveryEffect
schedule
on project has risks and
(positive or negative)
opportunities.
Time
Scope
Quality
Cost
So, Risks and
Opportunities should be
managed effectively to
minimize the surprises!!
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Project Risk Management
Process
AS/NZS ISO 31000:2009
Analyse Risks
Evaluate Risks
MONITOR AND REVIEW
Identify Risks
RISK ASSESSMENT
COMMUNICATE AND
CONSULT
Establish Context
Treat Risks
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Project Risk Management
Risk Assessment
Risk Assessment include
Risk Identification (both Uncertainties and
Events)
Risk Analysis
Qualitative
Quantitative (Schedule Risk Analysis or SRA)
Risk Evaluation
The goal is to have a better
understanding of risks / opportunities
and their overall impact on project
completion date. This will bridges the
gap between traditional CPM schedule
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Project Risk Management
Risk Analysis
Risk Analysis is the process to
comprehend the nature of risks (or
opportunities) and to determine the level
of risks (or opportunities) in the schedule
Risk analysis provides the basis for risk
evaluation
and
decisions
about
risk
treatment; and
By Schedule
Risk Analysis
(SRA), we
Risk Analysis
includes
risk estimation.
model the risks and opportunities
(uncertainties and events) within the
complexity of the interrelationships
between the various tasks of theSlide 13 of 18
Schedule Risk Analysis
(SRA)
SRA is a probabilistic analysis to quantify
the impacts to a project, program or
portfolio as a result of carrying
uncertainties and/or risks and
opportunities or to simulate the possible
what-if scenarios.
Relying on a accurate most likely
schedule as a base, SRA takes the
project time management to the next
level of accuracy and confidence.
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Schedule Risk Analysis
Overview
Available data gathering
Schedule Review
Technical Research
Risks & Opportunities Register
Both Uncertainties and Events
Schedule Risk Model
Simulation
Results and Discussions
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Schedule Risk Analysis
Data Gathering
Required information for a SRA
Well-developed project scope;
Quality estimate excluding contingency and
escalation;
Schedule reflecting the estimate;
Risk management policy/processes in your
organisation;
Risk checklist presenting typical risks and
opportunities;
Risk & Opportunities Template;
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Schedule Risk Templates/Models;Slide
and
Schedule Risk Analysis
Schedule Review
How
to
schedule?
review
the
deterministic
Validation of all quantities (most likely);
Validation of all productivity rates (most
likely);
Validation of all durations (most likely);
Minimum number of constraints;
Complete logic network;
Reasonable duration for tasks; and
Reasonable Critical Path.
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SRA Schedule Review
Sample Report
Confidential
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Schedule Risk Analysis
Technical Research
When the team is confident that the
project deterministic schedule reflects
the most likely case, the technical
research can begin.
Historical data research
Interviews
Internet searches, etc.
Issues may include items such as site
access, Environmental Approvals,
inclement weather, construction
productivity concerns, construction
modifications, equipment and material
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Schedule Risk Analysis
Risk Register
The Technical Research will enable the
schedule risk analyst to complete the
Risk Register file:
The identified risks & opportunities
Likelihood of the identified risks and
opportunities
Impacted activities
Schedule and/or Cost Impact/s
Schedule and/or Cost Variations
Correlation of risks and opportunities to one
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another
Schedule Risk Analysis
Risk Register (Sample)
Confidential
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SRA Risk Register (Sample)
Rain details
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SRA Risk Register
Quality Check
Major risks and opportunities been
identified;
The
likelihood
and
impacts
been
assessed;
Risk Matrix aligned with the companys
risk management policy;
Impacts checked against the allocated
calendars;
Correlations
between
risks
been
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identified;
SRA Schedule Risk Model
Uncertainties & Events
Developing the Schedule Risk Model
involves modelling the potential impacts
and the likelihood of the risks and
opportunities on the project and then
applying those to the schedule.
Two aspects of the risks and opportunities
should be modelled within the schedule:
Estimate Uncertainties (Optimistic, Most
Likely and Pessimistic)
Events including probabilistic branching
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SRA Schedule Risk Model
Probability Distributions
Probability Distribution is a way to
indicate the likelihood of values between
the optimistic and pessimistic values.
Probability Distribution can be:
Uniform (flat),
Normal (bell shaped),
Beta (skinny bell shaped),
Triangle (pyramid shaped), or
Customised (user defined).
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SRA Schedule Risk Model
Probability Distributions
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SRA Schedule Risk Model
Special Conditions
Special conditions which needs extra
attention:
Probabilistic Branching which considers the
situation where the outcome of an event can
cause in two or multiple possible courses of
activities.
Correlation between risks
Positive Correlation: occurs when one risk goes
higher, so must the other.
Negative or Adverse Correlation: occurs when one
risk increases, the other must decrease.
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Inclement Weather or other external
SRA Schedule Risk Model
Inclement Weather
Inclement Weather can be a significant
factor in a project schedule. Very often
there is good data available but
understanding the impact on the
schedule is challenging.
A proper modelling will allow the team to
define risk assessment criteria for
inclement weather conditions in the
schedule, and include these uncertain
weather conditions in the risk analysis.
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SRA Schedule Risk Model
Inclement Weather
There are two distinct ways of defining
inclement weather events:
Event with results in an uncertain number of
non working days scattered throughout a
period, e.g. rain or snow.
Event with results in a single block of non
working time with a probability of occurrence,
e.g. chance of a hurricane in a period.
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Schedule Risk Analysis
Simulation Methods
The SRA performs multiple simulations of
the project using random samplings of
the relevant risks and opportunities
considering their probability and impact.
Two popular methods:
Monte Carlo Simulation (MCS) faster method
but has a larger possibility of sampling error
Latin Hypercube Sampling (LHS) slower
method but less sampling errors
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Schedule Risk Analysis
Simulation Process
Analysis does the simulation through
multiple samplings or iterations.
Each iteration is picking one sample point
from each activity and calculating the
project outcome.
User defines the number of iteration (e.g.
1000, 5000, etc) depending on the
complexity of the project and its risk
model.
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Schedule Risk Analysis
Simulation Tools
Main tools been widely used for
simulation are:
Primavera Risk Analysis (previously known as
Pertmaster)
@Risk for Project
Crystal Ball
The next slides are presenting results
from simulations by using Primavera
Risk Analysis.
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Schedule Risk Analysis
Sample Programme
Confidential
Confidential
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Schedule Risk Analysis
Finish Date Histogram
Confidential
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Schedule Risk Analysis
Histogram & Statistics
Confidential
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Schedule Risk Analysis
Criticality Index Tornado
Confidential
The Criticality Index of
an activity is the
proportion of the
iterations in which the
activity was critical.
Usually more attention
will be given to the
activities with Criticality
Index of more than
50%.
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Schedule Risk Analysis
Criticality Path Report
Confidential
The Criticality Path
Report highlights the
path through the
project containing the
tasks with the highest
Criticality Index values.
Percent Criticality is the
probability that an
activity will be on the
critical path; this
indicates the relative
importance of the
activity to other
Slidein
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activities
the
Schedule Risk Analysis
Criticality Distribution Profile
Confidential
Criticality Distribution
Profile plots the spread
of Criticality Index in a
project which gives an
indication of the
number and threat of
near to critical path.
A high percentage
(more than 40%)
indicates a relatively
tight programme.
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Schedule Risk Analysis
Action Plan
The accuracy of the SRA outcomes
should be improved through a number of
iterations of this process.
Based on the initial results, the team
should:
Review the risk register and make modifications where
require;
Make changes to the risk model accordingly;
Run the simulation again and repeat the process to
achieve the most cost-effective risk mitigation plan;
Finalise the Risk Action Plan as well as the Contingency
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Plan; and
About the Author
Pedram Daneshmand, Associate
Director
Blue Visions Management
Pedram is a civil engineer with over 15 years experience in the construction industry. He is
highly skilled and technically proficient in many aspects of construction including
Programming, Programme Performance Measurement, Quantitative Risk Analysis, Contract
Management, Schedule Risk Analysis (SRA), Cost Risk Analysis (CRA), Project
Monitoring & Controls (PMC) Systems, Earned Value Performance Measurement technique
(EVPM) and POW (Program of Work) Planning & Controls.
As an industry innovation award winner for his programming and risk analysis skills,
Pedram is currently an Associate Director with Blue Visions Management leading a team of
planning and controls professionals within the infrastructure sector. With more than 15
articles in the professional conferences/journals, he is been regularly invited to the technical
presentations as one of the industry leaders in his field.
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