NextGen Project Cost, Schedule and Risk Management


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by Prasad Kodukula
Price: $499.00
0 Lessons

Course Overview

Project cost overruns and schedule slippage are ubiquitous in our organizations. Survey after survey have revealed that at least one third of projects, irrespective of the industry, do not complete on budget and schedule. The rate of project failure has been universally stubborn over the years, despite the growing maturity of project management as a discipline.

A major reason is that the costs and schedules are underestimated, while the benefits are exaggerated. Increasing uncertainty and risk in today’s environment has made cost and schedule management even more challenging. Project costs and schedules are intricately tied to risks. Ignore risks, and watch your cost soar and schedule slip. This course demonstrates the importance of integrating cost, schedule, and risk for project success. It offers next generation tools that can help you develop more realistic cost and schedule estimates accounting for various types of risks.

The commonly used deterministic models for estimation of cost and schedule do not consider or reveal the breadth of uncertainty. Risk registers and qualitative risk analysis methods are only a first step to account for uncertainty and risks. There is a strong need for more stochastic and sophisticated quantitative methods. Next generation tools and techniques include probability distributions, simulations, tornado diagrams, correlations, decision trees, and optimization methods, among others. First, these tools provide us with meaningful information to obtain more realistic estimates of cost and schedule. Second, they present rational means for establishing contingencies. Third, they offer better insight into how a project may unfold. Fourth, they help us make right project investment decisions in the first place. And finally, they significantly improve the chances of completing projects on time and under budget.


 

Course Format

The course is presented in a workshop format involving hands-on activities. It consists of mini-lectures, interactive discussions, and team-based exercises and case studies. Quantitative methods presented in this course involve Excel based applications. You’ll receive a demonstration of how Microsoft Corporation’s Project can be used in tandem with Excel-based applications to integrate uncertainty and risk into cost and schedule estimation.

Your instructor will demonstrate each spreadsheet model using an example problem. You will learn the models through hands-on application. The class size will be limited, so that personal attention can be given to each participant in helping with the hands-on application exercises. (You are required to bring your own laptop to the classroom and encouraged—not mandatory—to download trial copies of Microsoft Project and Palisade Corporation’s DecisionTools Suite, unless you already have a license for their use.)

Learning Objectives

This course will help you develop skills to:

  • Estimate project costs and schedules accounting for various risks
  • Recognize the importance of risk analysis in estimation
  • Define and analyze uncertainty and risk using quantitative methods
  • Differentiate four types of risk every project must account for
  • Apply three levels of estimation for cost and schedule
  • Select the right estimation method for agile vs. waterfall approaches
  • Distinguish deterministic models vs. stochastic models for cost and schedule estimation and demonstrate why the latter are superior
  • Use Monte Carlo methods for cost and schedule risk analysis
  • Understand various types of probability distributions and their importance in simulations
  • Estimate project cost and schedule contingencies using a rational approach based on stochastic analysis
  • Perform sensitivity analysis on project estimates

You Will Receive

  • A participant guide with workshop slides, exercises and case studies
  • Electronic copies of the slides, case study exercises and exercise solutions
  • 22.5 PMI PDUs (Professional Development Units)

 

Course Outline: Day One – Day Three

Course Opening

  • Course objectives, outline, and agenda
  • Personal introductions
  • Ground rules

Cost Estimation Fundamentals

  • Estimating methods
  • Accuracy and confidence
  • Three levels of estimates
  • Rolling wave method of estimation
  • Key factors in estimating
  • Cost funnel
  • Basis of estimate

Schedule Estimation Fundamentals

  • Time vs. resource constrained scheduling
  • Four key factors that drive project schedule
  • Three levels of estimation
  • Critical path method

Risk Management

  • Definitions of risk and uncertainty
  • Four types of risks
  • Risk register
  • Qualitative vs. quantitative risk analysis
  • Deterministic models vs. probabilistic models
  • Sensitivity models
  • Models for variability and events risk
  • Methods to manage ambiguity and emergent risk

Applications of Monte Carlo Methods

  • Probability types
  • Probability distributions
  • Role of distributions in simulations
  • Monte Carlo simulations
  • Sensitivity analysis
  • Application of simulations to project cost, schedule, and NPV

Integrating Cost, Risk, and Schedule

  • Estimation with and without risks
  • Deterministic vs. probabilistic models
  • PERT estimation
  • Probabilistic analysis using simulations
  • Sensitivity analysis using radar charts and tornado diagrams
  • Calculation of contingencies using deterministic and probabilistic analysis
  • Probabilistic Gantt chart
  • Critical and crucial indexes for project schedule
  • Effect of correlation between inputs on cost and schedule estimation

Decision Analysis Tools

  • Decision trees
  • Real options analysis
  • Portfolio optimization
  • Biases in decision making

Course Closing

  • Lessons learned
  • Personal action plan
  • Project Controls Managers
  • Project managers
  • Project planners
  • Program managers
  • Team members responsible for estimation and management of project costs and schedules
  • Project analysts involved in financial modeling of project benefits and costs
  • Members of project offices
  • Project sponsors
  • Functional Managers
  • Senior management and individuals interested in project risk management

 

Who should attend?

  • Project Controls Managers
  • Project managers
  • Project planners
  • Program managers
  • Team members responsible for estimation and management of project costs and schedules
  • Project analysts involved in financial modeling of project benefits and costs
  • Members of project offices
  • Project sponsors
  • Functional Managers
  • Senior management and individuals interested in project risk management

 

 

Course features

Global Reach

Measurement of teaching effectiveness

Content Security

Versatility

Corporate and Enterprise services

Mobile learning

Self-paced courses

The ability to teach full time

Easy-to-use interface

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Our virtual classes are designed to keep the same levels of engagement and networking as participants would on our on-site public courses. All course sessions are delivered through our easy-to-use online learning platform and is supplemented by case studies and practical group exercises.

Similar to our in-person public courses, you will have live interaction with course trainers and other participants. Our live online courses are led by our experienced trainers, this is done during scheduled times. All registered delegates will receive copies of the course materials electronically.

This course is scheduled to take place live online using virtual learning technology. For dates on our public courses please contact us via the chat option, phone or email.