A Fascinating Simulation-Based Method for Risk Analysis

While piling up the final PDUs I need to renew my PMP, I encountered a fascinating discussion of risk (and budgeting) analysis and management techniques, presented by the internationally recognized risk management expert Dr. David T. Hulett. The video I watched is hosted on ProjectManagement.com, which I believe is behind a paywall. The video below, on Youtube, appears to cover roughly the same material.

I first learned about techniques like this from my friend Richard Frederick, in lecture 14 of his 20-part series on agile project management and data management, but hadn’t learned a lot more about it until now.

The interesting part of Dr. Hulett’s work is not just the application of Monte Carlo techniques to the analysis of risk (and project costs), but the wide range of additional considerations the technique can include, address, and illuminate. These include lead-lag effects, dependencies, correlations, the fact that risk elements are far more likely to represent threats (negative) than opportunities (positive), the fact that — for valid reasons usually involving complexity — risks and costs are almost certainly greater than are usually estimated, and more.

I’m sure could profitably watch this multiple times, but for now it has given me many useful concepts to chew on.

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