Background

A client responsible for a major construction project wanted an overview of the project risks it could face.

Our solution 

RSK Project Services designed a project risk register consisting of a spreadsheet containing information such as the risk description, risk owner, likelihood score, consequence score (in terms of both time and cost), mitigations and status.

As part of our service, RSK Project Services Ltd facilitates regular risk workshops to update the register.

Although the register contains live records of the project risks, our client required analytical support in order to model and estimate project contingency costs.

The risk register contains an estimate of the likelihood of each risk event occurring (a percentage) and an estimated range of costs should it occur (pessimistic, most likely and optimistic values).

RSK Project Services Ltd wrote a risk model that used the register to estimate the project’s contingency cost budget. The model runs with ~50,000 iterations to give a projected distribution of budget costs. Each iteration represents one project run-through. With every iteration likely to produce a different set of risks, a large number of simulations enable an accurate distribution cost calculation.

The key value output of this model, as agreed with the project team, is the P90 (90th percentile) cost value. There is a 90% probability that the project contingency cost will not exceed this value and is therefore used for budgeting purposes. After each workshop, RSK ran the simulation model to recalculate the adjusted contingency costs.

Costs

We focus on bespoke solutions that are designed around your business process, so costs vary depending on your specific requirements. Payment can be as a one-off fee or in monthly instalments.