Project Risk Quantiﬁcation: Methods that Work
A Workshop by John Hollmann
Validation Estimating LLC
About this workshop
Decision makers depend on reliable capital project cost and schedule risk analyses to give them conﬁdence in their capital investment decisions.
To deliver reliability, risk analysts need to apply project risk quantification (PRQ) methods that work. That means the PRQ methods should: - be based on empirical research of risk drivers and validated against actual data, - be applicable on all projects– simple and complex, large and small, conceptual or detailed, and good or bad quality estimates and schedules, and - be simple enough that consultants are not needed except for an outside view of strategic projects.
Unfortunately, few methods meet these criteria. Too often methods are purely subjective, and/or ignore the risk drivers that matter. Other methods rigidly tie to risk registers that were never intended for quantification. The discussion will review research on what drives project cost growth, schedule slip and accuracy. It will highlight the concept and importance of “systemic” risk (i.e., qualities of one’s capital project system). It will then review an integrated set of PRQ methods “that work” for projects, programs and portfolios of every description for both owners and contractors. The session is based on the presenter’s book: “Project Risk Quantiﬁcation: A Practitioner’s Guide to Realistic Cost and Schedule Risk Management”.
Topics covered by this workshop
John Hollmann is author of the book “Project Risk Quantification” (hardcopy via www.decisions-books.com or on Kindle via Amazon). John, owner of Validation Estimating, LLC (VE), works with capital program managers and project leaders to improve their cost engineering practices, including cost/schedule risk quantification in support of investment decision making. John regularly reviews major international estimates in many industries and conducts risk analyses in support of investment decision making and contingency setting. Mr. Hollmann is a frequent speaker at international conferences, has written many papers and was lead author of the AACE® International text; the Total Cost Management (TCM) Framework. John is an Honorary Life Member of AACE® and recipient of their Award of Merit and Lifetime Achievement Awards. He also led development of the AACE® Decision and Risk Management Professional (DRMP) certification. Prior to founding VE, Mr. Hollmann led the Cost Engineering Committee metrics and research efforts at Independent Project Analysis, Inc. John is a registered Professional Engineer with an MBA, a Certified Cost Professional, a Certified Estimating Professional and Decision and Risk Management Professional.
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