What's the Risk?
This material is a summary and examination of a CII research team’s findings resulting from a survey of 104 contractor and owner organizations worldwide. The topic provides an overview of when, why, and how probabilistic approaches are used, and documents the kinds of successes organizations were achieving through probabilistic risk management. In addition, the research team examines the benefits as well as barriers of implementing probabilistic controls at three levels of risk analysis: identification, deterministic, and probabilistic.
RT-280’s initial survey results indicated that 90 percent of organizations implementing probabilistic approaches to project risk management achieve a return on investment (ROI) of at least 1:10, while a third of the respondents noted ROIs exceeding 1:100. To identify the process, benefits, and implications of probabilistic analysis of cost and schedule risks in the design and construction of capital projects, the research team employed both quantitative and qualitative methods for data collection and analysis. The research pool included owners and contractors and varied among markets include horizontal, vertical, and process types of projects. Additional findings allowed the team to holistically catergorize “risk triggers” into four groups: Project Cost, Delivery Method, Novelty, and Project Location(s).
IR280-3, “What’s the Risk”
This quick reference guide is presented as a two-sided, laminated reference sheet. It explains the appropriate uses and interpretations of the three levels of project risk analysis. It also includes descriptive samples of probabilistic risk analysis outputs, e.g., heat maps and tornado charts.
