| Cost and Schedule Risk
Analysis |
Check out the cost and schedule risk analysis
resource page. |
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Cost and schedule risk analysis is a proven tool
for reducing risk to projects.
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Budgets and schedules with high uncertainty are primary causes of failure for
projects. Establishing realistic budgets and schedules for projects is a major risk
mitigation action that significantly improves the likelihood of delivering what is
required, on time, and within the budget or other management constraints. |
When the schedule, requirements, and the planned budget are not aligned there will
probably be demands for substantial schedule compression (with impacts on quality
and costs), or substantial reductions in scope to maintain cost and schedule (with impacts
on performance and functionality). |
Mapping project risks to project schedules, work breakdown structures and cost
accounts facilitates qualitative analysis of risks to project contingencies. The
potential impacts of the risks are modelled to derive probability curves that enable
"what-if" analysis. The outcome is an increased likelihood of achieving
critical milestones and of staying within allocated budgets.
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Typical examples from actual analyses are shown here: |
- Probability of achieving costs less than budget plus reserve
are no better than 50%. It would be prudent to Increase reserves to a more
reasonable level.
- Click image to enlarge
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- Probability of achieving three major milestones shows that the
third milestone is highly optimistic without major adjustments to the plan.
- Click image to enlarge
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The PBSi Cost and Schedule Risk Analysis process provides a simulation
capability enabling predictive analysis for projects involving hardware, software,
microelectronics and lifecycle support cases. This process helps Companies right
-size proposals and plans for New Business. It helps existing programs and change
initiatives to be sustainable and successful. |
