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Achieving Predictable Projects

Achieving Predictable Projects. In a World of Black Swan Risks. SESSION 9. Achieving Predictable Projects. In a World of Black Swan Risks. Gary Berman, PE, FCMAA President / CEO GREYHAWK. SESSION 9. Achieving Predictable Projects. In a World of Black Swan Risks.

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Achieving Predictable Projects

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  1. Achieving Predictable Projects In a World of Black Swan Risks

  2. SESSION 9 Achieving Predictable Projects In a World of Black Swan Risks Gary Berman, PE, FCMAAPresident / CEOGREYHAWK

  3. SESSION 9 Achieving Predictable Projects In a World of Black Swan Risks Paul McNuttManager, Project Risks & Reviews ConocoPhillips

  4. SESSION 9 Achieving Predictable Projects In a World of Black Swan Risks TBDTBDTBD

  5. Agenda • What risks are you including? • Risk Spectrum • Discussion • How do you assess and manage those risks? • Levels of Analysis • Risk Management Techniques • Discussion • How will you management risk in the future? • Discussion

  6. How Deep is Your Risk Pond

  7. A Spectrum of Risk Tactical Quantity accuracy Labor rates Productivity Weather Margin of error Design allowance Strategic Basis of design unc. Partner alignment Permitting Future Foreign exchange Hyper-inflation Changing regulation “Black Swan” Market crash War Extreme weather Major scope change

  8. Labor Availability

  9. Design Allowance

  10. Material Availability

  11. Weather Delay

  12. Scope Definition

  13. Governance Model

  14. Global Hyper-inflation

  15. Geopolitcal

  16. Considerations When Modeling Risk • Definition of risk in dollars or days • Frequency • Probability Rating Scale • Optimistic / Likely / Pessimistic • Combinations • Lone wolf or hunting in packs • Iterative Analysis to determine ranges • Determine cost effectiveness of risk mitigation

  17. Risk Translated into Real Impact

  18. Risk Spectrum

  19. The Four Levels of Risk Assessment • Level 1: Sensitivity Analysis • Use of plus/minus percents to “test” a projects weaknesses • Generally uses symmetric ranges (e.g., +10% and -10%) • Level 2: Three Point Ranging • Use of continuous distributions on cost estimate line items • Generally ignores dependency between similar items • Level 3: Three Point Ranging with Dependencies • Use of continuous distributions with correlation • Generally ignores risk events and schedule slips • Level 4: Full Cause and Effect Modeling • Use of three point ranges on cost estimate variables coupled with dependencies and risk events including a linked schedule risk Ranges generated from Levels 1-3 are typically narrow and unskewed Ranges generated from Level 4 are wider and skewed reflecting observed data

  20. Any more comments or questions Achieving Predictable Projects In a World of Black Swan Risks Gary Berman GREYHAWK Paul McNutt ConocoPhillips TBD TBD

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