Question

Actions involved in the assessment process will be planned based on the risk factor analysis in which model?

Answer 1

Project risk analysis, like all risk analyses, must be implemented using a graded approach; that is, the scope and approach of the analysis must be crafted to fit the needs of the project based on the project size, the data availability, and other requirements of the project team. Los Alamos National Laboratory (LANL) has developed a systematic qualitative project risk analysis technique called the Risk Factor Analysis (RFA) method as a useful tool for early, preconceptual risk analyses, an intermediate-level approach for medium-size projects, or as a prerequisite to a more detailed quantitative project risk analysis. This paper introduces the conceptual underpinnings of the RFA technique, describes the steps involved in performing the analysis, and presents some examples of RFA applications and results.

Description of the Risk Factor Analysis Process
Overview of the Risk Factor Analysis Process
The objective of the RFA is to identify and understand the underlying factors that ultimately will drive the behavior of the toplevel schedule, cost, and technical performance measures for a project. The primary steps involved in conducting a risk factor analysis are as follows:

• List activities, tasks, or other elements that make up the project

• Identify applicable technical risk factors

• Develop a risk-ranking scale for each risk factor

• Rank risk for each activity for each risk factor

• Sum results across risk factors for each activity

• Document the results and identify potential risk-reduction actions for evaluation by the project team

Each of these steps is described in the subsections that follow.

List Activities Modeled
The first step in RFA is the identification of the activities, tasks, or elements of the project to be evaluated. If available, the project work breakdown structure (WBS) and the baseline schedule can be used as the starting point for the identification of important activities. Using this information and data obtained from discussions with the project team, the analyst develops a project activity flow chart to help organize the RFA. The flow chart defines the tasks to be modeled and their interrelationships for the project schedule analysis. WBS and schedule tasks may be consolidated and/or expanded to explicitly highlight those tasks and influences that are expected to have a significant technical risk and/or significant uncertainty in schedule or cost performance. The flow chart is developed in sufficient detail to allow the items important to overall schedule and cost performance to be evaluated individually, yet it is simple enough for all key tasks and their interrelationships to be viewed easily.

Identification of Risk Factors
Risk factors are the issues, topics, or concerns that may ultimately drive the behavior of the top-level schedule and cost performance measures for a given activity. The aim of the RFA is to systematically search the selected project activities for the presence of such risk factors. To aid in the identification of relevant risks, the risk project spectrum first is divided into four broad categories of risk generally found to be relevant to all LANL projects.

1. Technical Risk. Technical risks are those events or issues associated with the scope definition, research and development (R&D), design, construction, and operation that could affect the actual level of performance vs. that specified in the project mission need and performance requirements documents. Examples of technical risks include new and changing technology and changing regulatory requirements.

2. Schedule Risk. Schedule risk is the risk associated with the adequacy of the time allotted for the planning, R&D, facility design, construction, and startup operations. Two major elements of schedule risk are (1) the reasonableness and completeness of the schedule estimates for the planned activities and (2) the risk that schedule objectives will not be met because of a failure to manage technical.