Taming Your Big Beastie Projects (Part 3)

Posted by Megan Cacioppo on September 30, 2016

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Today we’re wrapping up our three-part series on how to tame complex, Integrated Programs – otherwise known as “Big Beasties.”

In Part 1 , we discussed the key characteristics of an Integrated Program and shined a spotlight on the first step: Program Set-Up. In Part 2, we covered the elements of performing program schedule and risk analysis. Today, we’re tackling the third, and final step: Program Cost Risk Analysis.

Program Cost Risk Analysis

In the third step required for taming Integrated Programs, you perform a Cost Risk Analysis. The Cost Risk Analysis follows much of the same methodology as the Schedule Risk Analysis with a couple of modifications.

First, just like in the Schedule Risk Analysis, a template with percentages is created for the Cost Uncertainty. The template percentages will be multiplied against the Remaining Cost for each cost line to create a minimum cost and a maximum cost (otherwise known as the Cost Uncertainty range).

Then, the schedule line that best describes the time range is identified. For example, if there is a cost line for Site Security, then perhaps the length of the construction activities is the best estimate of how long that Site Security will be needed. Once the schedule line is determined, the results from the schedule risk analysis create multipliers for the cost uncertainty range. The minimum and maximum cost values, as well as the skewness of the cost uncertainty distribution are updated using this schedule risk analysis information.

The Cost Risk Events are then mapped, or assigned, to their particular cost lines and the Cost Risk Analysis is completed. With the Cost Risk Analysis model complete, the analysis provides the probability that the program overall, or its components, will be delivered on cost.

All of the advantages to the program from the Schedule Risk Analysis are also present for the Cost Risk Analysis – consistency, common language and the determination of the cost profile.

There you have it! A 3-step process to taming your “Big Beastie” projects. To view our full set of tips and tricks, as well as hear lessons learned from the B-61 Kansas City Program, download our recent white paper on the topic, authored by Lorrie Tietze, Founder & Owner of Interface Consulting, LLC, or tune into the on-demand webinar, How to Tame Your Big Beastie Projects.