5 Benefits of Performing A Quantitative Schedule Risk Analysis
There are 2 main types of risk analysis: quantitative and qualitative risk analysis.
A qualitative risk analysis is an assessment that depends on the knowledge and experience of crucial project stakeholders to identify things that can impact the project’s schedule. A qualitative risk analysis involves assessing an order of magnitude of those impacts and calculating a probability of happening. This kind of evaluation is usually managed through the project risk register and risk management plan.
A quantitative risk analysis employs probabilistic assessment methods like the Monte Carlo simulation technique. The process involves creating a logical activity network model where different risks are identified from a wide range of sources. The schedule model is simulated via multiple iterations done with a random activity duration chosen from a predetermined distribution.
5 Quantitative Assessment Benefits
As with any analytical assessment, the end-result is only be as good as the work done. It is extremely crucial that you dedicate adequate time in the beginning of the project to come up with a sound logic network with a comprehensive basis document. This will help to ensure you get positive results of the SRA process.
After running hundreds of schedule risk analysis on a wide variety of projects, we have found that there are 5 key benefits of doing a quantitative risk assessment:
1. Know The Probability of Success
A quantitative schedule risk assessment helps to establish a level of confidence among members of your team throughout the course of implementing the project plan.
2. Identify High-Risk Areas
A schedule risk analysis can also help identify high-risk areas in the project schedule and implementation plan. This allows project managers to divert key resources to areas where they are needed most.
3. Mitigation
The initial risk analysis offers a valuable list of high-risk areas in the project schedule. Once these areas have been identified, the project team must think ahead and come up with potential mitigation plans that can be used to minimize delays. The model also offers a platform that the project team can use to assess the impact of the mitigation plans and implementation adjustments in the future. Here is some good insight from Barclay Simpson
4. Continuous Risk Management
The amount of time investment in creating a proper schedule risk model typically complements the existing project risk management plan. Performing regular schedule risk management reviews helps the team to stay involved in the risk management process and provides an ongoing analysis of the general confidence level in project execution.
5. Boost Client Confidence
Finally, a quantitative schedule risk analysis can also be used to boost client confidence in the project being completed on time. A good risk management plan helps to assure clients that you are thinking ahead and are prepared to tackle anything that arises.
