Primavera Pertmaster

Agenda
Introductions Risk Management Overview Pertmaster Value Proposition Risk Methodology

"Primavera has mastered the art of determining trends in the project portfolio management (PPM) market, identifying the PPM needs of its target markets, and acquiring solutions that fit the vendor's evolving product mosaic. Building on Primavera's own project management solution set, which addresses all nine of the PMBOK areas, the company has built a comprehensive and seamless suite of products that fit a broad base of industry verticals. Louis Cardin, The Forrester WaveTM December 18, 2007
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Why Conduct Risk Analysis?

Eliminate project failure

Projects fail because plans are unrealistic Execution is not to plan

Achieve greater confidence with project plans

Track past performance to forecast future Reduce uncertainty of estimates More realistic schedules

Set appropriate expectations for cost and schedule

Determine probabilistic start or finish Manage and allocate resources accordingly Accurate forecasting, Earned Value validation

Project Risk Types

Estimate Uncertainty
Model Model

Risk Events
Risk register/log PI Matrices

Risk Distributions e.g. 3pt estimates Monte Carlo simulation

Reduction of risk exposure

Contingency Risk responses (e.g. mitigation)

Estimate EstimateUncertainty Uncertainty+ +Risk RiskEvents Events= =Total TotalRisk RiskExposure Exposure
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Primavera Pertmaster Overview

Pertmasters proven techniques provide risk based predictive modeling across the entire project lifecycle
Risk Techniques Schedule improvement: PPM maturity Full Lifecycle Risk Management Portfolio risk strategic project selection

Risk assessment: risk register Risk Analysis: Monte Carlo simulation

Risk-Based Predictive Modeling Confidence in schedule/budget

Project risk tactical project controls/PM Cost and schedule risk analytics
Integration Primavera: P3, P3e, P5, P6, Suretrak

Realistic forecast expectations Contingency assessment Cost-benefit of mitigation scenarios

MS Project, EPM, Deltek

Why Pertmaster for Risk Management?

P6 Risk Capabilities Pertmaster Risk Capabilities

Risk log basic risk register No risk analytics capabilities Input into Pertmaster

Full cost/schedule risk management MC risk analytics engine Publish Risk Adjusted schedule into P6

All inputs to Pertmaster

Input > Analysis > Output

"It's impossible to hide a bad plan in Primavera." Chris Morris, Agere

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Pertmaster Value Proposition

Portfolio Analysis Project Planning Project Execution

Project selection? Capacity planning? Minimize risk exposure? Top-down phases Project alternatives Revenue / expenditure risk

Project completion dates? Confidence levels? Contractor: do-able plan? Owner: Max cost/benefit? Determine contingency Determine mitigation Cost > schedule integration

Execution to plan? Avoid risk events? Reduce risk hot spots? Update risk plans Forecast accuracy

"To improve programme confidence, we've mandated the use of Primavera Pertmaster in all7key projects." David Ashkroft, Thales

Risk Methodology
Schedule Review
Risk Ready State Review for logic & errors

Risk Identification
Estimate Uncertainty Risk Events: Risk Register

Develop Preliminary Risk Model

Enter Estimate Uncertainty Map Risks to Activities

Preliminary Analysis & Review

Impacted Risk Plan Monte Carlo simulation

Final Model & Report

Risk Event plan Response planning
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Schedule Check Report

Examples:

Open-ended tasks If a task

has no successor, and it gets delayed, it will not delay the project. Does this reflect reality?

Most Constraints will fix a

task to its constraint date, therefore during the analysis, this task will not be delayed, even if it is carrying duration uncertainty!

Schedule logic
If issues are not resolved, then the analysis results will be effected. Content can be customised
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Risk Analysis
Distribution Graph:

What is the likelihood of completing this project by 25th December? ONLY 32% of finishing on or before 25th December 07 The earliest this project finished in the simulation was 19th October 2007, the latest
was 04th April 2008

>Confidence Scale >How confident are

you?
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Risk Analysis
Tornado Chart Duration Sensitivity

Determine the Risk Hotspots in the schedule Which tasks are the most sensitive? Which should we mitigate?

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Cost-load schedule
Initial Cost Estimate

Apply estimate
uncertainty to cost items

Resources can be timedependent or independent

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Cost-load schedule
Cost Distribution Graph

Chance of completing this project to budget? 28%

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Cost-load schedule
Tornado Chart Cost Sensitivity

Biggest cost drivers may not be the same as the biggest project finish drivers!

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Cost-load schedule
Cost contingency is P80 cost Deterministic Cost

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Cost-load schedule
Duration contingency is P80 Finish Date Deterministic Finish Date

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Cost-load schedule
The Scatter Plot

50% of the iterations

when the project was delivered on time 50% of the iterations when the project was delivered to budget

% number of
iterations when the project was delivered on time and to budget is only in this bottom lefthand quadrant = 29%
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7. Cost-load schedule

The dividers (highlighters) can be dragged. This is most effective when the quadrant
is locked (50% in this case).

Reducing the
budget pushes out the project finish date and viceversa

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Risk Register

Uncertainty on time and cost has been estimated, but no risk events have been taken
into account.

Discrete risks that, if occur, will have a significant impact on time and/or cost. Risks can be directly inputted into the Risk Register or imported from external
systems

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Risk Register
There is a workflow to using the Risk Register. It usually starts with the Risk Scoring scheme

Set up qualitative Risk

Scoring (PID) matrix (Edit > Risk Scoring)

Risk Scoring matrix

can be configured from 2x2 to 9x9

All fields can edited

to conform to the organizations scheme

Scoring templates
can be saved, stored and distributed for future projects
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Risk Register
The qualitative risk assessments are inputted here. The values in the drop-down menu are taken from the risk scoring matrix Focusing on one risk, the risk assessment derives a risk score, e.g. 56 for Key
Resource Unavailable

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Risk Tornado Chart

Key Resource
Unavailable was highest scored risk. But is not the biggest driver!

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Risk Mitigation

We have analysed a project with just estimate uncertainty on time and cost, and then
looked at a pre-mitigated plan Shows the worst case scenario

Pre-mitigated result shows there is no chance of delivering this project on time or to

budget

Lets build in a mitigation strategy and see if it has reduces the risk exposure on this
project.

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Risk Mitigation

Where we are now

What we could do

Where we want to be

Cost of each mitigation strategy For e.g. it will cost 32m to reduce Key Res. Unav. probability of
occurrence down from H > VL, and Safety Impact from VH > N, overall score down from 56 to 1.
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Distribution Analyzer
Compare original vs. pre-mitigated Impact of risks is 272.4 days (80% confident)

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Distribution Analyzer
Comparing pre and post at 80% confidence, shows that mitigating these risks will bring the project back by 208 days.

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Distribution Analyzer
Cost S-curves. Will mitigating these risks save money?

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Probabilistic Cash Flow

There is a cash
demand in these periods

Amount of cash
that was not used in each these periods

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Q&A

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