Book: Project Risk Analysis Made Ridiculously Simple

BookRiskAnalysis

Hardcover: 315 pages

Publisher: World Scientific-Now Publishers Series in Business (January 5, 2017)

Language: English

ISBN-10: 9814759376

ISBN-13: 978-9814759373

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You are leave for the airport 2 hours early, but then are stuck in traffic  and you miss your flight. You borrowed tens of thousands of dollars to open a restaurant that specializes in perogies, but no one is interested. You hire a programmer to develop new CRM software, but he spends more time communicating with his new girlfriend instead of his work and the project is delayed indefinitely.

All these things are characterized by two words: stuff happens. “Stuff happens” could be due to your own mistakes, but it could be due to events outside of your control. Regardless why, “stuff happens” is a source of a huge burden on our life. Imagine a world without risk, we would save not only save huge amounts of time and money, but also reduce our stress and improve our quality of life. Alas, life is not without risk, so the question is “Can we do something about these risks?” Short answer is yes, we can. We can identify, analyze, and manage them in such a way that when done properly, it will greatly improve our project’s chance of success.

If you want to be successful in your personal and professional life including your projects, you need to know the answers to these three questions:

  • what could happen
  • what is be probability that it could happen and what will be the impact
  • what can you do about it

In this book, we discuss both qualitative and quantitative risk analysis with greater emphasize on the quantitative risk analysis. In many cases, projects are relatively simple and only require very basic mental process. For example, if you think that the probability of being stuck in traffic on your way to the airport is significant, you would leave your home earlier. But in many projects related to your business, you would better advised to use some more advanced techniques, particularly different quantitative methods: therefore; the primary focus of this book is on quantitative project risk analysis. Main subjects will include analysis of risk events with Monte Carlo simulations, sensitivity analysis and other related concepts. In addition, we will pay a lot of attention to Event chain methodology, a technique that is focused on identifying and managing events and event chains that affect project schedules.If this all sounds a bit complicated, you would be correct as in many cases with complex projects the process must be equally comprehensive. However, to perform both qualitative and quantitative project risk analysis, the concepts are quite straight forward and use very basic mathematical concepts as luckily there is a lot of very good and proven software on the market that will do the heavy lifting for you. All examples in this book were performed using RiskyProject project risk analysis and risk management software by Intaver Institute Inc. However you can use any risk analysis software, a list of which is included in the appendix of this book. Our goal is to provide a straightforward approach to project risk management for project managers, business analysts, and other project team members without requiring mathematical or statistical background of a risk specialist.

Project risk analysis is closely related to risk management, which we briefly discuss in this book as well. Risk management is focused mostly on what to do with risks, particular risk communication, response planning and governance. Risk analysis can be a part project risk management.

This book is the third in our series about project risk and decision analysis and project risk management. The first book “Project Decisions: The Art and Science” (Virine and Trumper, 2007) is focused on project decision analysis. The second book called “ProjectThink: Why Good Managers Make Poor Project Choices” (Virine and Trimper 2013), where we discussed psychology of project risk management. This is book is about project risk analysis or process of determining project risk probabilities and impacts, risk prioritization, and analysis of mitigation plants.