Quantitative risk analysis and project governance: Risk Engineering Society Conference, RISK 2023

Dr Dale Cooper spoke at the Risk Engineering Society Conference, RISK 2023, held in Brisbane Meanjin on 7-8 September 2023.

His paper provided a short summary of the role of quantitative analysis of uncertainty in governance and decision making in large projects. It focused on the interaction between quantitative analysis and tollgate decisions at the end of each project phase, including the contribution of quantitative analysis to the decision support package (DSP) used by an investment review committee.

It noted the different contributions of distributional outputs, sensitivity outputs and input data about uncertainties to specific parts of the DSP.

Finally, it noted that cost and schedule uncertainty may not be the most important factors if the main focus of decisions is on project value.

Summary of the main lessons

Distributions: Output distributions from QRA provide guidance for critical project decisions.

Sensitivity: Quantitative sensitivity analyses provide guidance for work plans for the next project phases, by focussing effort on the uncertainties that matter most.

Data: Data inputs to quantitative analyses, and the discussions involved in generating them, provide guidance for detailed chapters in the Decision Support Package.

Value: While we’re generally good at analysing uncertainty in the capital cost and schedule, they may not be the most important factors if our main focus is on long term project value