"Planning and Facilitating a Schedule Risk Workshop" by Chris Carson, PSP, CCM, PMP
Introduction
Schedules, no matter how carefully designed and developed, rarely incorporate any assessment of risks that occur on most projects. The lack of process to gather and use the lessons learned from the collective experience of project management professionals in the development of schedules lowers the likelihood of success, and leads to greater risk of claims. Invoking risk management for all projects leads to more successful projects. Developing a process to facilitate a schedule risk workshop improves the results of the risk assessment.
This session will provide a practical and efficient approach to planning and conducting a schedule risk workshop, based on real project workshops. Inclusion of the right stakeholders, facilitating participation by experienced professionals, and simple steps provide for guidance to make the risk workshop a valuable experience with meaningful results.
Schedule Risk Concepts Overview
Assessing cost risk in project bids has been recognized for years by the use of contingencies, but time risk in project schedules is typically not assessed. Not many Owners allow time contingencies unless those are held in management reserves outside of project management control. Risks, as defined by Recommended Practice No. 10S-90, Cost Engineering Terminology, under “Risk – Project-Specific”, are “uncertainties (threats or opportunities) related to events, actions, and other conditions that are specific to the scope of a project.”
Risks can fall into several broad categories, such as uncertain duration risks, specific event risk, or risks embedded in the development of the CPM network. Each of those types of risk might be analyzed differently using different tools depending on the availability of software to support the analysis.
Risk analysis, as defined by AACE International, is “A risk management process step, which includes the quantification of the effect of all uncertainty (risks) on a project. Usually done by identifying risks and quantifying each risk’s probability of occurrence, and potential severity of impact.” The general risk management process includes planning, identification of risks, qualitative risk analysis, quantitative risk analysis, and risk response. Then there is a repeated effort where the identified risks that remain in the schedule are evaluated at each update and a new risk management process implemented at some periodic stage in the project. As described in RP #71R-12, this is covered by the TCM Framework, which defines risk management as “a systematic and iterative process comprising four steps:
- Plan – establish risk management objectives;
- Assess – identify and analyze risk;
- Treat – plan and implement risk responses; and
- Control – monitor, communicate and enhance risk management effectiveness.”
One of the most important benefits produced from providing risk analysis is in the collaborative effort in identifying risks and brainstorming the options for risk planning and response. This is similar to one of the primary benefits of planning which is to involve the project management team in thinking through and brainstorming how the project will be built. So the risk workshop follows in the footsteps of the planning session, involving many of the same stakeholders and improving the collaborative effort that is desired in partnering on a project, no matter the exact term for the collaborative effort.