Active Quantitative Probabilistic Risk Project Management

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If you have been among the millions following my blog for the past few years, you know that I’m a fan of a disciplined approach to both qualitative and quantitative risk analysis as a tool to manage schedule and budget risk in project management.

Most often, risk analysis is seen as a tool used at the start of a project to gauge schedule and cost risk, or to assess the potential downside in a failing project. It is very helpful in these scenarios.

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The Role of Probabilistic Modeling in Schedule Risk Analysis

One of the more fascinating elements of history is the way in which individual humans can influence its course and change the future. For instance, where would the world be today if Winston Churchill had not stood so indomitably – and virtually alone against Hitler and Nazism? One person can impact the whole of humanity from one point in time forward. Another such contributor to the progress of humanity was Thomas Bayes. Bayes, the father of Bayesian analysis., lived in England in the 1700’s. It was his forward thinking that brought us probabilistic stochastic modeling.

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Organizational Risk Tolerance in Project Management

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As project managers, one of the important roles we have is assessing and managing risk for our projects.  But risk assessment cannot be performed in a vacuum.  The organization, customer, or end user needs to have a voice in how much risk should be tolerated.

Take, for instance, the NASA-manned space flight.  It involves risks to human life which can’t be completely mitigated.  On the other hand, many construction and engineering firms take a zero risk approach to human life and safety on their jobs.  Jacobs Engineering goes “beyond zero” in their approach to safety risks.

It’s interesting to think about the potential for conflicting safety standards within a project.  What if a beyond zero safety organization is performing project management for a firm that does not consider safety to be a priority?  The customer may see the money being spent to ensure safety as an unwanted cost, while the project management firm will consider these costs essential to their ability to perform work for their client.

Let’s move from health and safety risk to schedule risk.  In this case, the same potential for conflict arises if the owner and the PM don’t agree on what is tolerable schedule risk for the project.  But in this case, it is possible to use statistical modeling and forecasting to examine the probability of certain completion dates.
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GPM – The Planning Game Changer

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With the introduction of the Graphical Planning Method (GPM), the methods and mindsets of scheduling and planning shifted to a hands-on, planning-dominated process instead of the computer-generated scheduling process used in the Critical Path Method (CPM)

GPM offers what could possibly be the simplest process to coordinate activities, relationships and milestones into a network schedule in the shortest amount of time. Additionally, the method’s graphical tools and techniques allow all stakeholders, regardless of training level, to implement, adjust and development schedules.

GPM Innovations

  • Logic Diagramming Method (LDM)
  • Graphics technology and the visual display of diagramming objects
  • Planning and scheduling on an evolving, time-scaled calendar
  • One-step view for connected and dated activities allows for easy schedule adjustments
  • Resource-limited activity dates and floats are continuously solidified as the schedule evolves
  • Activity floats originate with relationships or logic ties
  • Activity floats can be realistically apportioned by not letting tasks slip beyond assigned milestones
  • Visual plan allows for easy reworking as schedule evolves and develops
  • Elimination of the time gap between planning and schedule reporting

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Visual Collaboration Creates Better Planning

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The goal of project planning is to create a workable schedule and plan that provides all stakeholders with the information they need – from activities and tasks to deadlines and milestones. However, the path to creating a workable schedule is riddled with complexities, especially if the schedule is developed within a silo.

Collaborative planning is one way to bridge the issues of silo scheduling and lack of information, but implementing collaboration in the planning process also presents its own set of challenges.

For collaboration to work well, project leadership must blend soft skills, technology and project governance to cultivate an environment of open communication and flow of information. True collaboration requires transparency, communication, symmetrical knowledge, and most importantly, that egos be set aside.

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