Some major projects in the industry of energy, petrochemicals, mining and infrastructures became train wrecks. Reasons of project failures have been studied by a variety of organizations, and "lack risk management" is one of them. Project Risk management is still a new breed of sound project management despite its development in past dacade or two, refined PMBOK Chapter 11, AACEi DRMP certificate, QRA technique and the other decision supporting systems under risk conditions are all relatively anew with about 10 years of maturity. Whilst many don't really take qualitative risk assessment seriously, only hiring juniors to coordinate the efforts, the QRA process does not have a good fate either. It is not uncommonthat that contingencies are simply added to cost estimates without any QRA process, resulting in either inflated cost estimates (wasting capital) or frequent cost overruns (unrealistic budgets). Methodology of applying QRA is determined by the stage of projects and the purpose of cost estimates, no one single method is superior to the other, a composite solution to consider estimate line item specific risks, project wide systemic risks, execution schedule delay risks, escalation and rare-event driven risks (for management reserve) is worth considering and discussing. RISCORTM risk model was conceived, developed, implemented (in Suncor) and matured since 2005 having applied to 100+ capital projects in both North America and Europe, from $30M to $10Billion projects, from oil & gas to mining, from upstream to pipeline and downstream. This dynamic and stochastic project risk model integrates qualitative and quantitative risk assessment processes and generates convincing and defendable project contingency, to minimize the probability of project failures.
Click Here to Sign Up! The course starts with learning the basics of risk management (RM) and dealing with uncertainty in investment and bid decisions and project control (i.e. the context.) Fundamentals such as terminology and statistics are covered. Attendees will then learn how to elicit information about risks and use it to perform integrated, probabilistic cost and schedule risk analysis for contingency, reserves and escalation in a step-by-step manner in accordance with the text (“Project Risk Quantification”) including exercises to reinforce the lessons. The content is consistent with AACEI Recommended Practices where applicable. Quantification at different project phases is covered, including capturing historical data to improve future risk analyses. In addition, the attendees will learn about landmark empirical research, example cases, tips and rules-of-thumb and watch-outs. Attendees will also be provided with practice guidelines, tools and templates to help put the practices into action at their workplace.
Click Here to Sign Up! When quantitative risk analysis is performed for project cost contingency in capital project world, discrete risks are often ignored as focuses are often on risky items with the "continuous distribution". Those independent, uncorrelated and rare-event driven risks, however, often than not are the culprits that throw the projects upside down. To compensate and to increase the probability of project success, the Management Reserve Fund hence is generated in addition to project contingency. How to properly capture the effects of those discrete risks and their impacts on projects' outcome, what methodology should be used to document and simulate these types of risks are the combination of arts and sciences. This set of presentation provides illustrations with real case studies to showcase the methods and techniques for this application.
Click Here to Sign Up! This presentation will discuss the need for an integrated approach between cost estimating and cost control, instead of treating them as isolated disciplines. Why this is important and what benefits can be held when using an integrated approach will be explained using practical examples. At the end of the presentation, it will be demonstrated how this integrated approach can be achieved with today’s technology.
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