Let us continue the discussion of risk mapping to the project’s primary constraints of scope, time, cost and quality to improve overall success of the project. This column focuses on the mapping our risk potentials to the time (project schedule) constraint.
As each project consists of tasks, milestones, and activities that produce the “fit-for-use” deliverables, the tool project managers’ (PM) use to track project tasks and durations is the project schedule. The project schedule, if managed correctly, sequences daily activities and resources to record the status of the project.
The time constraint or vector is the primary constraint that usually overly occupies the attention of most project managers even though it is not the most important. PM have become almost fixated on the project schedule, or integrated master schedule (IMS) to the exclusion of all else. In reality, the schedule does not drive the project; it is the production of the demanded quality (“fit-for-use”) deliverables that should drive the project, the schedule is simply the artifact illustrating the project’s progress towards these objectives.
What is important are the project risk potentials that could possibly lead to schedule delays, and prevent project teams from meeting their milestone completion dates. By mapping project risks to the time vector as defined in the schedule, PM can actually get in front of some of these risk potentials to help reduce their impact on the project’s time frame.
While current practices go through the process of risk identification, these practices fall short in the assessment of the risk potentials with respect to the time constraint. By using a quantitative assessment first rather than the industry normal qualitative assessment to determine the risk’s potential impact cost (called the risk equivalent value or REV), PM arrive at a more definitive understanding of the risk potential. Without the quantitative assessment, the PM could subjectively provide a probability of risk occurrence but fall short in providing some measureable way to score the impact of each risk, especially those risks that directly affect the scheduled project duration.
These uncertainties can arise from ambiguity in requirements, variability in the base estimates, and the possibility of unplanned events and circumstances. If there is no effective mapping of these risk potentials to the project schedule to further assess this impact, how can a project manager/risk manager truly understand the impact of each risk on the project schedule?
As a first step, identifying if a risk potential is internal or external to the project will allow the PM and the team to understand if this is a risk can be mitigated within the confines of the project (internal), or if it lies outside the management boundaries of the project (external). Additionally, the characteristics of the other primary constraints (scope, cost, and quality) with respect to project risk potentials must also be identified and quantified.
Once a risk potential is identified as impacting the schedule, the next step is to commence a quantitative analysis which will assist in determining the impact that a specific risk potential will have on the project schedule’s end date. This analysis of the risk potential and how it impacts the schedule will further help determine the steps to mitigate the risk by reducing the twin vectors of its REV: Cost of Impact and Probability of Occurrence.
Additional information that may be needed as inputs to this quantitative analysis are:
- Trigger events and dates
- Earliest and latest dates of impact
- Historical impact and lessons-learned data
- Schedule impact deviations
- Schedule impact probabilities
It is not enough to just track risk potentials in a risk register. To proactively manage your risk potentials, additional measures and processes as delineated above are needed to ensure the equilibrium of the primary constraints is maintained. This equilibrium or balance is necessary to produce the project’s “fit-for-use” deliverables (the definition of fundamental project quality). It is critical for today’s dynamic and visible projects to maintain this equilibrium for it is only projects that remain “in-balance” that are capable of the production of quality-defined deliverables.
Furthermore for the project managers to know which risk potentials have the greatest probability of putting the project schedule in jeopardy, the PM needs to identify the risk potentials with the highest time-adjusted REV. Merely identifying risk potentials and prioritizing them without any schedule impact analysis will leave the PM without critical information on how to adjust the schedule in order to assist in the mitigation of the highest REV risk potentials.
By mapping risk potentials to the project tasks and/or activities, the improved REV, now time-adjusted, will provide the PM with a clarity of the risk potential’s impact to the overall project’s end date. The project manager can then risk adjust the schedule based on the information provided thereby closing the loop between the project risk potentials and project’s schedule.
To risk-adjust schedule tasks and/or activities, what are the questions a PM and his/her scheduler ask:
- What are the uncertainties of the risk-impacted duration estimates, i.e., source, value, and assumptions?
- How do we represent these uncertainties with a probability distribution?
- What should be done if the risk potential could be mapped to more than one activity or task?
Mapping project risk potentials to the time constraint will allow the PM and project team to look at the tasks that are impacted by the highest REV risk potentials to optimize the application of precious risk mitigation resources. This supports the planning and implementation of a more effective mitigation strategy for the project as a whole.
In future articles, we will dissect and detail the steps involved in accomplishing the schedule impact analysis. The math involved will require a bit of patience on the readers’ part since it goes beyond the normal level asked of most PM and/or schedulers. The articles will be sure to provide a complete coverage of the mathematical operations, and we ask that you not shy from participating with us over the next few issues.
“Remember, to stand out in one’s profession, one must be willing to take the next step up.” CJP Stoneman.