As a quantitative risk analysis tool, Schedule Risk Analysis enables stakeholders to identify and quantify the project risks and opportunities and, through comparative analysis of possible scenarios, to develop project programmes and budgets with a more level of confidence.

1. Slide 1 of 18 Schedule Risk Analysis(SRA)Pedram DaneshmandAssociate DirectorBlue Visions Management Pty Ltd

2. Slide 2 of 18 Content Project Time Management Risk & Opportunities Project Risk Management Schedule Risk Analysis Results Review Action Plan

3. Project Time ManagementHistory 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). Slide 3 of 18 Project Time Management includes the processes required to accomplish timely completion of the project (PMBOK, 2004).

4. Project Time ManagementProcess Activity Definition Activity Sequencing (logic) Activity Resource Estimating Activity Duration Estimating Schedule Development Schedule Control (PMBOK, 2004) Slide 4 of 18

5. Project Time ManagementSchedule 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) Slide 5 of 18

6. Schedule DevelopmentMethods 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 Slide 6 of 18

7. 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 Other assumptions/documents e.g. calendars, PMP, etc. Slide 7 of 18 All these add uncertainties to schedule and reduce the confidence level. What about risks and opportunities in the schedule?

8. Schedule Development Outputs The outputs of Schedule Development process are: (Deterministic) Project Schedule; (Deterministic) Schedule Model Data (Deterministic) Schedule Baseline (Deterministic) Resource Requirements Slide 8 of 18 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?

9. 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 Slide 9 of 18 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 integrated!

10. Schedule DevelopmentRisks & Opportunities Every schedule has uncertainties/assumptions. Every schedule has risks and opportunities. Slide 10 of 18 Effect on project (positive or negative) Time Scope So, Risks and Opportunities should be managed effectively to minimize the surprises!! Cost Quality

11. Project Risk Management Process Slide 11 of 18 Establish Context MONITOR AND REVIEW COMMUNICATE AND CONSULT Identify Risks Analyse Risks RISK ASSESSMENT Evaluate Risks Treat Risks AS/NZS ISO 31000:2009

12. Project Risk ManagementRisk Assessment Risk Assessment include Risk Identification (both Uncertainties and Events) Risk Analysis Qualitative Quantitative (Schedule Risk Analysis or SRA) Risk Evaluation Slide 12 of 18 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 and the REAL project.

13. Project Risk ManagementRisk 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 Risk Analysis includes risk estimation. Slide 13 of 18 By Schedule Risk Analysis (SRA), we model the risks and opportunities (uncertainties and events) within the complexity of the interrelationships between the various tasks of the schedule.

14. 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. Slide 14 of 18 Relying on a accurate most likely schedule as a base, SRA takes the project time management to the next level of accuracy and confidence.

15. Schedule Risk AnalysisOverview Available data gathering Schedule Review Technical Research Risks & Opportunities Register Both Uncertainties and Events Schedule Risk Model Simulation Results and Discussions Slide 15 of 18

16. 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; Schedule Risk Templates/Models; and Sample report of the process and recommendations. Slide 16 of 18

17. Schedule Risk Analysis Schedule Review How to review the deterministic schedule? 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. Slide 17 of 18

18. SRA – Schedule ReviewSample Report Slide 18 of 20 Confidential

19. 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. Slide 19 of 18 Issues may include items such as site access, Environmental Approvals, inclement weather, construction productivity concerns, construction modifications, equipment and material deliver, etc.

20. 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 another Notes, etc. Slide 20 of 18

21. Schedule Risk Analysis Risk Register (Sample) Slide 21 of 18 Confidential

22. SRA – Risk Register (Sample)Rain details Slide 22 of 18

23. SRA – Risk RegisterQuality Check Major risks and opportunities been identified; The likelihood and impacts been assessed; Risk Matrix aligned with the company’s risk management policy; Impacts checked against the allocated calendars; Correlations between risks been identified; Stage the opportunities if required; and Duplications are minimised and addressed. Slide 23 of 18

24. SRA – Schedule Risk ModelUncertainties & 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 (probability and the impacts) Slide 24 of 18

25. SRA – Schedule Risk ModelProbability 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). Slide 25 of 18

26. SRA – Schedule Risk ModelProbability Distributions Slide 26 of 18

27. SRA – Schedule Risk ModelSpecial 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. Inclement Weather or other external influences Slide 27 of 18

28. SRA – Schedule Risk ModelInclement 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. Slide 28 of 18

29. SRA – Schedule Risk ModelInclement 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. Slide 29 of 18

30. 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 Slide 30 of 18

31. 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. Slide 31 of 18

32. 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 Slide 32 of 18 The next slides are presenting results from simulations by using Primavera Risk Analysis.

33. Schedule Risk Analysis Sample Programme Slide 33 of 18 Confidential Confidential

34. Schedule Risk Analysis Finish Date Histogram Slide 34 of 18 Confidential

35. Schedule Risk Analysis Histogram & Statistics Slide 35 of 18 Confidential

36. Schedule Risk Analysis Criticality Index Tornado Slide 36 of 18 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%.

37. Schedule Risk Analysis Criticality Path Report Slide 37 of 18 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 activities in the programme. Confidential

38. Schedule Risk Analysis Criticality Distribution Profile Slide 38 of 18 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. Confidential

39. 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 Plan; and Communicate this schedule with the team and then monitor it. Slide 39 of 18

40. 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. Slide 40 of 18