Schedule Risk Management - Construction Project Scheduling and Control - page 385

• Catastrophic consequence indicates that there will be multiple delays to critical
path items or multiple critical paths, which will result in lengthy delays to the
project.
Once these initial qualitative assessments are made, they can be used to determine
priorities and consequences during the qualitative analysis stage of risk management.
A risk that has a high likelihood of occurring with a serious consequence to the
project's success should be considered the highest priority of any risk, just as those
with low likelihood and minor consequences are low-priority risks. The output from
the qualitative analysis process should be a list of prioritized risks, ordered from the
highest to the lowest priority, as well as three-point estimates of durations for activities
if the quantitative risk analysis will be probabilistic using Monte Carlo simulation.
One item that bears discussion is a concern about bias in the risk identification
process. There are ways that participants in the risk workshop may influence the input
from other participants, from group think to confirmation bias. It is important that
each participant in the workshop is allowed and encouraged to submit his or her own
ideas and assessments without influence from others. One way to minimize this con-
cern is through the use of interviews where the facilitator meets individually with the
participants so there is no outside influence on the discussion. See David Hulett's
book, “ Practical Schedule Risk Analysis ” (2009), for more information.
4. Performing Quantitative Analysis
The next step after completing the qualitative assessment is to perform a quantitative
analysis of the risks. Qualitative descriptions, which can be used to identify the like-
lihood and consequences of risk, are then aligned with quantitative probabilities in a
process that is often called probability mapping . The qualitative descriptions are used to
make it easier to evaluate risks, and once they are completed, probability mapping con-
verts those descriptions into values that can be used in the software risk calculations.
A common probability mapping might correlate the following ranges of quantitative
probabilities with these qualitative descriptions: remote, less than or equal to 20%;
unlikely, 21% to 40%; likely, 41% to 60%; highly likely, 61% to 80%; near certainty,
greater than 80%. During the probability mapping and discussion about each risk, the
estimated location in the probability range can be determined and recorded. The out-
put from the quantitative analysis is the prioritized risk register with assigned rankings,
sorted by the combination of the probability and the consequence. This enables the
start of the next step, responding to the risks, or if using a probabilistic quantitative
analysis, factoring the risks into the Monte Carlo or what-if scenario analyses.
5. Responding to and Addressing Risks
Once the risks are listed and analyzed, the next step is to address the risks by various
means. These include avoiding, shifting, or preventing all possible risks, and accept-
ing remaining unresolved risks and incorporating them into the schedule, as well as