Research - Pragmatic Analytics for Managing Project Risks

2013 - 2015

Deliverables

Pragmatic Analytics Report out, Member Summit 2015

Description

Innovators are always confronted with significant uncertainties and risks that are inherent in the opportunities that their companies are pursuing.  These risks and uncertainties must be thoughtfully evaluated in order to enable allocation of resources to the most lucrative opportunities.

While there has been significant academic progress in applying advanced analytics to technology project modeling, the high levels of resources and overhead typically required to implement these models make it difficult for industrial practitioners to justify this approach. On the other hand, traditional deterministic approaches to financial modeling generally obscure the impacts that the critical uncertainties have on the success or failure of projects.  Teams may over-react to relatively small risks or under-estimate the impact of risks that actually have a dramatic impact on the outcome of the project.  This leads to a high probability of experiencing unanticipated setbacks requiring significant time and additional resources to return projects that are challenged in this way back to health.

We explored a new middle ground – the opportunities for a pragmatic application of advanced analytics.  The outcomes give IRI member company project teams improved processes to identify and quantitatively assess and manage the most significant risks inherent in their projects.  Armed with this information, project teams can allocate time and resources to resolving only the most critical issues that determine project success or failure.  This enables project portfolio owners to more confidently identify which projects should be stopped or redirected before significant resources have been consumed.  Conversely, successful mitigation of the most critical risks enables project portfolio owners to identify high-potential projects at an earlier stage of development so that intentional acceleration of these projects could lead to significant competitive advantage.

Participants

Co-chairs

Scott Mathews

Robert Williams

Subject Matter Experts

Alan Fusfeld

Phil Russell