Risk management - Documentation
Documentation
Firstly, we need to decide to what LEVEL we take the WORK BREAKDOWN STRUCTURE.
If the exercise is to generate a cost estimate of the total project you may wish to go to a lower level.
Be aware that more detail could cloud the big picture. If the plan is too detailed it is unlikely to be realistic over a long time period.
If the aim is to get a quick idea of the cost so that you can consider putting in for a bid (as a contractor) or trying to gain a project GO / NOGO / MAYBE decision or where speed is of the essence then the estimate will be carried out at a much higher level.
Let us assume we go to a simple level where we have 5 WORK PACKAGES, named:
For each of these would generate the following:
Overview
A
B
C
D
E
Each of the level work packages would be recorded.
Description
Add details of the ‘work package’. Be concise.
Estimate
Using a value of £100 (for example) for each man day.
| MINIMUM | = 100 man days = £10,000 |
| LIKELY | = 130 man days = £13,000 |
| MAXIMUM | = 150 man days = £15,000 |
You should add details of how you arrived at the estimate. Justify the MINIMUM, LIKELY and MAXIMUM.
For example, what personnel you expect to use.
How many full time and how many part time?
Would external consultants be required?
Consider uncertain events (risks).
For example, there may be a likelihood that a particular event could occur with a 30% probability.
The potential impact of the event should be noted.
Reason for uncertainty
Describe the basic reason behind the 3 point estimate for the planned event.
Also, add the background as to why an uncertain event may impact on the plan.
Some activities will give rise to uncertain events because you won’t be able to assess the true quantity of resource until a particular phase of a project starts.
Summary of Risk Assessment
State whether there are any major issues or not to worry about.
Add details here concerning any of the uncertain events raised.
In the example above we mentioned a 30% probability of an uncertain event occurring.
We would add here the estimate of the cost of this event together with any justifications.
e.g.
| MINIMUM | = 20 man days = £2,000 |
| LIKELY | = 30 man days = £3,000 |
| MAXIMUM | = 40 man days = £4,000 |
Summary tables
Summarise in a qualitative table the basic reason for the uncertainty in each of the ‘work packages’ when generating the estimates.
Summarise in a quantitative table the ‘work packages’ and each of their 3 point estimates. Make sure you add any uncertain risks and their 3 point estimates.
How is this data interpreted by the software?
This is explained in the next [see task probability].