Getting scheduling and budgeting right can make or break a project – especially when those projects involve large, complex energy or infrastructure deliverables. There are many different project management software programs that aim to help teams develop schedules, but the outputs from those programs are often deterministic and don’t go the extra mile of accounting for risks or uncertainty. To bridge this gap, project managers can turn to probabilistic scheduling approaches that integrate variability, risk analysis, and optimization techniques.
At the 2024 Lumivero Virtual Conference, Dr. Hicham Rahali, Risk Management Expert at BF Stratégie, demonstrated how to combine @RISK ScheduleRiskAnalysis and RISKOptimizer to develop probabilistic schedules using Monte Carlo simulation that can enhance project managers’ ability to plan for uncertainties in complex megaprojects – and understand the best path for delivering projects on time and in budget.
Read this article to dive into the key insights from his presentation and explore how these tools can improve project planning and risk management or watch Dr. Hicham Rahali’s presentation on-demand.
The challenge: complex projects, simplistic scheduling tools
All project plans are vulnerable to disruption, and this risk is even greater for megaprojects. Dr. Rahali described the overall megaproject environment as characterized by the acronym “VUCA”, which stands for:
- Volatility
- Uncertainty
- Complexity
- Ambiguity
One of the major challenges of large infrastructure projects, Dr. Rahali explained, is that even the most seasoned managers won’t be able to anticipate every single potential risk. While most project managers think about disruptive events, Dr. Rahali notes that disruptions “can often be rooted in the simplest human interactions that trigger unexpected changes on a large scale.”
While tools like MS Project and Primavera can help build deterministic schedules – with key dates assigned according to an “as late as possible” (ALAP) or “as soon as possible” (ASAP) way of thinking – they can’t really account for risk. That’s where @RISK comes in.
ScheduleRiskAnalysis – taking scheduling a step further
ScheduleRiskAnalysis enables project managers to import project calendars from Primavera P6 or Microsoft Project into Excel, run a Monte Carlo simulation, and assess the probability of delivering a project on time and within budget. It also has the capability to synchronize multiple unique calendars for a more comprehensive analysis. Dr. Rahali demonstrated this through an example of one of the outputs users can generate with ScheduleRiskAnalysis:
This scatterplot represents simulation results from ScheduleRiskAnalysis. The matrix on the left-hand side of the image shows the probability of the project’s status. 89.9% of simulations had the project coming in within budget, while only 37.6% showed them coming in on time. ScheduleRiskAnalysis can also help project managers develop probabilistic schedules for each major step of a project:
The confidence intervals for each event make it possible to better identify risks, set buffers, and develop more effective contingency plans. However, while ScheduleRiskAnalysis can develop robust models, Dr. Rahali noted that its findings don’t always take into account every possible critical path that a project can take, and that its results, while predictive, aren’t prescriptive – they don’t help you understand which steps to take when. That’s why he combines ScheduleRiskAnalysis with RISKOptimizer.
Identify the optimal date to initiate action
When planning a large infrastructure project, it’s common to assign dates based on either ASAP or ALAP thinking. Combining RISKOptimizer helps project managers find the best date. For example, with a large infrastructure project, teams may need to take the following steps:
- Request permits
- Acquire land
- Purchase materials or equipment
- Hire resources
The more complex simulation capabilities of RISKOptimizer allow project managers to understand not just what the unexpected risks might be, but which decisions to make to avoid them. Dr. Rahali gave the example of timing material purchases to minimize storage costs.
RISKOptimizer can simulate many different critical paths a project can take – paths that even the most seasoned project managers might not have identified. Its simulations can also account for how different events happening at the same time (parallelism) can aggravate or mitigate risk impacts. This helps project managers demonstrate more transparent reasoning behind their contingency plans or buffering decisions.
The result? Optimized planning (schedule and budget) for project managers and clearer expectations for project stakeholders – even for major infrastructure and energy initiatives.
Make your own project breakthroughs with @RISK
We love to see how users put our software solutions to new uses. If you’re interested in enhancing your ability to identify risks in your project scheduling, request a demo of @RISK today.