2. Copyright © 2008 Bruce Taylor a Demo of Risk+ MPUG Puget Sound Chapter November 18, 2008

3. Copyright © 2008 Bruce Taylor Presented by: Bruce Taylor, PMP (expired)

4. Copyright © 2008 Bruce Taylor Statistically Based Project Schedule and Cost Estimating

5. Copyright © 2008 Bruce Taylor OR Why everything takes longer than it takes and Costs more that it costs

6. Copyright © 2008 Bruce Taylor Project Risk Management

7. Copyright © 2008 Bruce Taylor There is inherent uncertainty in every project….. In everything we do.

8. Copyright © 2008 Bruce Taylor Therefore there is Risk….. Some positive, Most negative.

9. Copyright © 2008 Bruce Taylor RISK Sometimes projects just don’t do what we want them to do.

10. Copyright © 2008 Bruce Taylor Here is a quote from a Petrobras executive, extolling the benefits of cutting quality assurance and inspection costs. Taking a Risk!

11. Copyright © 2008 Bruce Taylor "Petrobras has established new global benchmarks for the creation of exceptional shareholder wealth

12. Copyright © 2008 Bruce Taylor through an aggressive and innovative program of cost cutting on its P36 production platform.

13. Copyright © 2008 Bruce Taylor Conventional constraints have been successfully challenged

14. Copyright © 2008 Bruce Taylor and replaced with new paradigms appropriate to the globalized corporate market place.

15. Copyright © 2008 Bruce Taylor Through an integrated network of facilitated workshops,

16. Copyright © 2008 Bruce Taylor the project successfully rejected the established constricting and negative influences of prescriptive engineering,

17. Copyright © 2008 Bruce Taylor onerous quality requirements, and outdated concepts of inspection and client control.

18. Copyright © 2008 Bruce Taylor Elimination of these unnecessary straitjackets has empowered the project's suppliers and contractors to propose highly economical solutions.

19. Copyright © 2008 Bruce Taylor The P36 platform shows the shape of things to come

20. Copyright © 2008 Bruce Taylor in the global market economy of the 21st Century.“

21. Copyright © 2008 Bruce Taylor A Risk Analysis, why? They take too long and besides they’re just not worth the effort.

22. Copyright © 2008 Bruce Taylor THE 6 STEPS OF RISK Risk Management Planning Risk Identification Qualitative Risk Analysis Quantitative Risk Analysis Risk Response Planning Risk Monitoring & Control

23. Copyright © 2008 Bruce Taylor PROJECT DRIVERS SCOPE TIME COST GOOD FAST CHEAP

24. Copyright © 2008 Bruce Taylor Let’s do a little Risk Analysis

25. Copyright © 2008 Bruce Taylor Your Expected Value How long does it take you to drive to work? OR Why am I always late?

26. Copyright © 2008 Bruce Taylor Driving time to work 45 60120 f

27. Copyright © 2008 Bruce Taylor The Magic Formula Expected Value = O + 4*ML + P 6 O = Optimistic estimate ML = Most likely P = Pessimistic estimate

28. Copyright © 2008 Bruce Taylor The Magic Formula Expected Value = 45 + 4*60 + 120 6 O = Optimistic estimate ML = Most likely P = Pessimistic estimate Expected Value = 67.5

29. Copyright © 2008 Bruce Taylor Driving Time to Work 45 60120 f Expected Value 67.5 minutes

30. Copyright © 2008 Bruce Taylor Critical Path Method Using the three estimates for each activity. Creates the “Expected Value”. A single point estimate.

31. Copyright © 2008 Bruce Taylor Critical Path Method Does not take Risk into consideration Does not take Risk into consideration Based on a single point estimate Based on a single point estimate Near critical activities are not included Near critical activities are not included Ranges are neglected Ranges are neglected Highest Risk task may not be on critical path Highest Risk task may not be on critical path Does not take convergence into consideration Does not take convergence into consideration

32. Copyright © 2008 Bruce Taylor CONVERGENCE 8, 10, 18 days Finish day 10? 8 + 4*10 + 18 = 66 = 11 days 6

33. Copyright © 2008 Bruce Taylor Monte Carlo Simulation

34. Copyright © 2008 Bruce Taylor Lets find out by doing a little Risk Analysis What are the odds of finishing on time?

35. Copyright © 2008 Bruce Taylor If you don’t do a Risk Analysis you are just rolling the You don’t even know what you don’t know what you don’t know.

36. Copyright © 2008 Bruce Taylor Are You Leaving Your Projects To Chance? That’s a Risk

37. Copyright © 2008 Bruce Taylor A Risk Analysis, why? They take too long and besides they’re just not worth the effort.

38. Copyright © 2008 Bruce Taylor THAT’S IT