Cost & Schedule Risk Analysis – What Are We Really Trying to Learn?
This Expert Insight piece is part of a series by Chris Bradshaw, SVP Project Controls
Risk analysis can be an incredibly useful part of Project Controls.
It allows us to move beyond a single deterministic cost or completion date, and explore the uncertainty of complex project delivery. But I think the quality of the conversation is every bit as important as the sophistication of the model.
Before focusing on P50, P80 or any other confidence level, it is worth spending time understanding what sits underneath the analysis.
Does the schedule logic genuinely reflect how the project is expected to be executed?
Is the cost estimate based on a clearly understood scope and execution strategy?
Are the major interfaces, productivity assumptions, market conditions and project-specific risks properly represented?
And perhaps most importantly: are we challenging the assumptions that matter?
A risk model can process assumptions and uncertainties extremely effectively. What it cannot necessarily tell us is whether those assumptions make sense in the real-world environment in which the project will be delivered.
For me, this is where Cost and Schedule Risk Analysis becomes most useful.
The resulting cost range and probability dates clearly matter. But often the more valuable discussion sits behind those outputs. What is actually driving the uncertainty? What could materially change the outcome? Where does the project team still have influence? What mitigation will genuinely make a difference? And which decisions would be better made today rather than several months from now?
AI will undoubtedly make this process increasingly powerful.
I expect it will help us interrogate much larger datasets, recognize patterns, test scenarios and identify emerging risks considerably faster. But I suspect these constants will remain - experience, judgment and conversation that help us decide what to do about them.
Having spent more than 30 years in Project Controls, working from the EPC contractor side through to major operators such as Chevron and ExxonMobil, and more recently supporting smaller and emerging energy companies, I have seen these questions arise across very different projects, organizations and stages of development.
The circumstances change. The importance of independent challenge and informed decision-making does not.
Perhaps the real value of Cost and Schedule Risk Analysis is therefore not simply the numbers it produces, but the conversations and decisions those numbers enable.
This Expert Insight piece is part of a series by Chris Bradshaw, SVP Project Controls – see a previous post here.
If your project would benefit from an independent review, experienced challenge or additional Project Controls judgment and decision support, reach out to OGCS or to Chris Bradshaw directly.