Once you have conducted a quantitative risk analysis (QRA), the initial results may be subject to pressure for change to satisfy economic and political factors. But instead of backing away from risk analysis results, project risk managers should include QRA results in a transparent and traceable approach to scenario planning.
This process should involve formal agreement on enhancing or improving risk response measures based on empirical data or expert opinions, with the aim of aligning anticipated residual risk costs with organizational constraints.
What is Scenario Planning?
Scenario planning enables decision-makers to identify ranges of potential outcomes and estimated impacts, evaluate responses, and create and manage action plans in the event of positive or negative results.
Why is Scenario Planning Important?
Scenario planning can help you respond quickly in the event of an emergency because of pre-planning for potential issues. Equally important, scenario planning also gives leaders guidance for nonemergency decisions by providing a complete view of plans, budgets and forecasts, and identifying the potential impact of future events.
The Pitfalls of Underestimating Risk
Underestimating risk can lead to significant consequences, ranging from project delays and cost overruns to compromised stakeholder trust. Traditional methods like heatmaps and qualitative scoring mechanisms often fall short in providing an accurate assessment of potential risks. Embracing more advanced tools, such as Safran Risk, with its focus on quantitative risk analysis and scenario planning, helps organizations move beyond the limitations of outdated approaches. By acknowledging and addressing uncertainties through comprehensive risk assessment, teams can make informed decisions, allocate resources more efficiently, and ultimately navigate challenges with greater resilience. The shift towards a proactive and data-driven risk management strategy empowers organizations to stay ahead of potential threats, ensuring a more robust and successful project outcome.
Safran Risk's visual tornado charts, based on traceable and unambiguous quantitative data, serve as a best-practice alternative. This level of detail is crucial for transparent communication with stakeholders like insurers and financiers.
Crystal Clear Insight with Data Visualization
New software like Safran Risk makes data visualization accessible to entire project teams. This type of transparent data aids in scenario planning, improves team alignment around contingency funding levels, and enhances awareness of vulnerabilities and necessary actions to meet funding commitments. Another key advantage is the ability to provide reports demonstrating a commitment to efficient resource allocation to stakeholders.
Seamless Integration of Cost and Schedule Modules
Modern risk management software, exemplified by Safran Risk, allows unprecedented flexibility in modifying risk simulation models. There’s no longer any need to run separate cost and schedule models, as tools like Safran Risk now enable real-time integration. This capability provides the most accurate representation of time dependent costs by capturing and simulating uncertainty in both cost and schedule models concurrently.
Legacy tools like Oracle Primavera Risk Analysis (OPRA) fall short in comparison, often requiring significant time for analyses and reporting key risk drivers in less intuitive terms. Safran Risk's modern algorithms offer near real-time reporting on revised risk scenarios, facilitating quicker decision-making and collaborative adaptability.
Conclusion
Safran Risk goes beyond traditional risk analysis tools, offering a scenario planning approach that elevates decision-making and collaboration within project teams. By integrating cost and schedule models seamlessly, avoiding underestimation of risk, and providing crystal clear insight with data visualization, Safran Risk can be a valuable asset for enhancing risk management capabilities. The experts at Safran are ready to assist in tailoring these capabilities to meet the unique needs of your teams.
What's Next?
If your organization is facing uncertainty with projects, and seeking ways to embrace continual improvement, our top tier software tools can help you manage critical project risks. If you want to optimize your organization’s ability to manage successful projects, contact us to find out more about Safran Risk, and let us tailor a strategy so you can improve your risk management capability with the guidance of a trusted advisor.
