A PMI Risk Management Community of Practice Webinar with Dr. David Hulett
19 September 2013 • 17:00-18:00 CET/France
Identifying the root causes of project schedule and cost risk requires that the risk to the project schedule is clearly and directly driven by identified and quantified risks. In the Risk Driver Method the risks from the Risk Register drive the simulation.
As a side note, we find that the Risk Registers are not complete – during the interviews to collect risk data the interviewees introduce important risks that are, surprisingly, missing from the Risk Register.
The Risk Driver Method differs from older, more traditional approaches in which 3-point (low, most likely and high) estimates of the activity durations are applied directly to activity durations. We notice, however, that the traditional 3-point estimate represents, often, the influence of several risks that impact the activity if they happen. Therefore the importance of each risk cannot be individually distinguished and kept track of. Also, since some risks will affect several activities, we cannot capture the entire influence of a risk using traditional 3-point estimates of impact applied to specific activities.
The Risk Driver method allows us to specify the risks by their probability of influencing the schedule as well as the uncertainty of their impact if they do occur, and to assign the risks to all detailed tasks they influence. 3-point estimates have no clear way to represent the probability of a risks’ occurring so they miss one of the two important characteristics of the risks.
Dr David Hulett is the author of several books on risk management including: Practical Schedule Risk Analysis