The Benefits of Schedule Risk Analysis
There are many programs in the aerospace & defense industry that do not conduct a schedule risk analysis(SRA). They believe that they are able to adequately forecast their schedule dates without any need for a statistical analysis. Although they may be correct some of the time, they are never correct all of the time. A properly conducted schedule risk analysis can give a program a good indication of where the risks lie. They can also provide the program information on where to focus effort and where to mitigate risk.
Throughout my experience as a project scheduler, I have conduct multiple schedule risk assessments on over 2 dozen different programs. Even though each of these programs conducted a risk assessment, very few took the analysis and made an effort to reduce risk. The unfortunately fact is that most programs conduct a SRA because it’s a contract requirement and not a way to help program managers management their program.
The political realities of a program dictate how programs mitigate risk. A lot of the time, program management does not want to release funds for what may or may not happen. When it does happen, it usually causes a lot more harm than if money was spent early on. On the reverse side, if it does not happen, could that money have been saved and profit increased? The true purpose of a schedule risk assessment is to reduce schedule risk and increase profits.
The first step in conducting a successful risk assessment is knowing how much risk is and isn’t in your schedule. A lot of managers will pad their numbers. They know that program management will arbitrarily give them challenges and cut their durations. So they mitigate program management risk. Unfortunately, this kind of behavior will lead to a skewed schedule risk assessment. The truth is that some tasks have very low risk and other task will have high risk. If you are pouring concrete, you know how much you can pour a day based on your past experience. Now, if the concrete truck doesn’t show up on time, it will affect when you start. But, it will not affect how much you can pour unless the equipment breaks. This makes your pouring risk is low even though your concrete delivery risk may be higher.
By properly knowing your schedule durations and scope, you can come up with some good and very data centric predictions. If pouring concrete is critical, order 2 trucks instead of 1 or have 2 trucks on-site at any given time. Your schedule analysis will tell you which items in your schedule have more risk and volatility. The Schedule Risk Assessment (SRA) will give that insight. With it, you can start making decision that will reduce your program risk and, in effect, increase your bottom line.