Risk and Decision Analysis
The nature of projects is that they are most often complex and involve a substantial amount of uncertainty. Quantifying the uncertainty can help managers to make more informed decisions with more confidence.
We have developed key services in Contingency, Risk, and Decision Analysis to support effective execution of projects.
Contingency Analysis
Contingency Analysis is ideal for any project, given that there will always be uncertainty regarding the final cost. Traditionally, contingency is allocated to a project budget based on experience, standard practice, and the level of project definition as a percentage of total cost. We apply a quantitative analysis approach to ensure that decisions on contingency allocation can be made with sufficient confidence and backup. This has proven to be a very useful tool for our clients when it comes to decision making and stage-gate approvals.
Quantitative Decision Analysis
Decision Analysis is useful to help decision makers systematically break down complex problems that involve uncertainty in effort to better define a path forward for making decisions with confidence. Through the analysis, problems are decomposed, modelled over a range of scenarios, quantified for uncertainty, and then measured against performance criteria. Our services are designed to engage subject matter experts from their respective fields and utilize analytical tools to model the problem and alternative scenarios.
Project Risk Analysis
Project Risk Analysis takes the Contingency Analysis to the next level, quantifying the effects of reasonable threats and opportunities on the project. This process considers the variability of costs, schedule durations, outside project risks and their collective impact on the project. The results of this Monte Carlo simulation help to define the schedule contingency required to complete the project for a given confidence level as well as the risk reserve budget required. This service is ideal for Clients who require an understanding of the impact of risk and uncertainty on their schedule and budget to make informed project decisions.
Our services are designed to engage subject matter experts from their respective fields and utilize analytical tools to model the problem and alternative scenarios.
Strategy Development with Strategic Decisions Group & Engcomp
Strategic Decisions Group (SDG) is a management consulting firm renowned for its expertise in strategic decision-making, risk management, and value-based leadership.
Combining SDG’s world-class capabilities in strategy development and Engcomp’s deep experience in risk analysis and engineering, we provide a broad range of services to the North American mining and heavy industrial markets.
Corporate portfolio strategy
Asset portfolio strategy
Business unit strategy
Technology / innovation strategy
Cost-schedule risk analysis
Bidding strategy
Enterprise risk management
M&A transaction support
Together, we help our clients balance the imperatives for health, safety and the environment with the drive to create shareholder value; to determine the right mix of investment in existing assets and future projects given the inherent uncertainty of commodities prices; and to find new opportunities to maximize efficiency of operations with aging infrastructure.
In a recent engagement with a major primary resources marketing and logistics company, SDG and Engcomp collaborated to evaluate the client’s long-term capital planning process. We provided both real-time and next-steps recommendations regarding best practices for the mission-critical decisions that will drive hundreds of millions of dollars in capital expenditure. Our work helped to clarify the positioning of the long-term capital planning process in the context of both the business’ top-level strategy and its ongoing operational activities. In addition, we recommended a training program for client staff that would enable their teams to explicitly quantify risk and value, so that the organization’s executives can make apples-to-apples comparisons of the many proposed capital investment alternatives.
Through a collaborative, team-based approach, SDG helps their clients find innovative strategies to thrive today, while also helping them build internal competencies and more effective decision-making processes to meet competitive challenges in the future. As a result, they are the preferred strategic partner to many in the Global 2000.
