"Affordable, powerful computing and the widespread availability of quantitative risk analysis (#QRA) software has helped democratize data analytics in project delivery. This, in itself, is great for the project controls profession and industry at large. However, problems arise when:
a. project simulations are created without a thorough appreciation of the need for ongoing or continuing project risk management (#CPRM),
b. risk analysts embark on #risk computing before establishing the foundation in a competent #SRA-ready schedule,
c. identities and parameters about risks are collected within an environment where individual SMEs cannot or will not provide their candid opinions, or more simply,
d. risk terminology or processes are invoked that generate #bias or #noise, undermining risk #DataQuality, potentially, creating more harm than good."
I encourage you to read the Principles for Quantitative Project Risk Management in the latest issue of the Cost Engineering journal (https://lnkd.in/gvp-mpMQ; co-authored by David Hulett, Ph.D. FAACE & myself). The article describes the means for ensuring a mathematically unambiguous and traceable rationale for establishing contingency, with relevance that extends into and throughout project delivery, providing protection against #KnownRisk and #resilience in the face of #EmergingRisk. This approach is underpinned by integrated cost and schedule risk analysis (#ICSRA) as the primary method of modeling before project approval and, conducted in such a way that minimizes motivated reasoning and establishes a #DataFeedbackLoop to support quantitative risk management (#QRM), increasingly predictable projects outcomes and, ultimately, a risk-based competitive advantage.
Does your #PMO have a roadmap and framework to embrace the benefits of advanced analytics or #AI? What kind of models or tools do your project delivery teams currently employ to analyze and mange "uncertainty that matters": simple #BoQ / #BoM, #MCS / Monte Carlo #simulation, CrystalBall, @Risk, Riskonnect, Inc., Oracle #PRA, Deltek #Acumen, Safran Software Solutions / Safran Risk, nPlan, reference class forecasting / #RCF?
James Arrow DRMP FRICS
Principal & Consultant, Project Quantum Solutions LLC