Organizations who rely on the successful delivery of capital assets, need to set stretch goals th... more Organizations who rely on the successful delivery of capital assets, need to set stretch goals that can help improve their capability and develop or maintain a competitive advantage. Dr. D. Hillson once likened the successful application of a maturity model to, " walking up the down escalator ". This paper will review a high-level QRAMM or Quantitative Risk Assessment Maturity Model that describes the full spectrum of capabilities including: reactive, ad-hoc, centralized, mature and optimized. The strategies and capabilities presented in this paper offer a Risk-based Kaizen approach, helping DRM practitioners identify performance gaps and develop plans for QRA capability improvement.
The adage goes that, " you can't manage what you can't measure ". Furthermore, project teams cann... more The adage goes that, " you can't manage what you can't measure ". Furthermore, project teams cannot reasonably measure uncertainty if it is not clearly described. Additionally, the worthiness of an entire risk management program is in jeopardy if team members do not have faith that they are working to manage risks that matter. This paper proposes a three-step test that decision and risk management (DRM) practitioners can employ to verify risk relevance. This simple work process, focusing on authenticity, topicality and conformability, will help project teams overcome many of the pitfalls encountered when attempting to either perform realistic quantitative risk assessments, make risk-informed decisions or facilitate a long-term continuous risk management program.
Economists predict that the Fourth Industrial Revolution (i.e. Industry 4.0) will cause fundament... more Economists predict that the Fourth Industrial Revolution (i.e. Industry 4.0) will cause fundamental disruption. Within the Engineering and Construction sector, a proliferation of data streams will provide new levels of diagnostic and predictive insight, increasing efficiency, decreasing uncertainty and improving the likelihood of successful project delivery. New technologies promise to make the theory of risk intelligent strategies a possibility for both companies large and small. However, studies frequently highlight that the E&C sector is a technological laggard. Additionally, for this sector, the most significant barrier to digital progress is the lack of an overall strategy. To prepare for disruptive change in the profession, this paper will explore: a) goals for data science capability improvement, b) how project controls professionals can develop and lead an effective digital strategy, c) process steps for effective data science, d) opportunities for employing machine intelligence throughout the investment funnel, e) minimally viable metrics to support decision and risk management between entities. Ultimately, the paper will advocate that the association consolidates related white papers and develops a Recommended Practice, guiding members on the skills and knowledge required to perform Total Cost Management Analytics (TCMA) and deliver effective, actionable insight that reduces capital project risk and uncertainty.
—At a time of economic uncertainty, the most successful and effective organizations offer the mar... more —At a time of economic uncertainty, the most successful and effective organizations offer the market predictability. In order to achieve predictability in project outturn, risk management is given equal importance alongside cost and schedule control. In turn, improved risk control and growing levels of risk intelligence are best facilitated by ongoing measurement. In this paper, the measurement of risk will be discussed (in a project or construction and engineering context) to help reinforce process integrity. Methods for the effective capture and sharing of risk data will be reviewed in conjunction with critical success factors, common key risk indicators (KRIs) and other widely held risk metrics and benchmarks. In addition, the benefit of periodic risk-based project audits will be explored. After establishing a link between risk and knowledge, the merits of a central risk management library or knowledge base for professional risk management practitioners will be considered with the goal of improving risk management implementation effectiveness at the organizational and industry level.
Organizations who rely on the successful delivery of capital assets, need to set stretch goals th... more Organizations who rely on the successful delivery of capital assets, need to set stretch goals that can help improve their capability and develop or maintain a competitive advantage. Dr. D. Hillson once likened the successful application of a maturity model to, " walking up the down escalator ". This paper will review a high-level QRAMM or Quantitative Risk Assessment Maturity Model that describes the full spectrum of capabilities including: reactive, ad-hoc, centralized, mature and optimized. The strategies and capabilities presented in this paper offer a Risk-based Kaizen approach, helping DRM practitioners identify performance gaps and develop plans for QRA capability improvement.
The adage goes that, " you can't manage what you can't measure ". Furthermore, project teams cann... more The adage goes that, " you can't manage what you can't measure ". Furthermore, project teams cannot reasonably measure uncertainty if it is not clearly described. Additionally, the worthiness of an entire risk management program is in jeopardy if team members do not have faith that they are working to manage risks that matter. This paper proposes a three-step test that decision and risk management (DRM) practitioners can employ to verify risk relevance. This simple work process, focusing on authenticity, topicality and conformability, will help project teams overcome many of the pitfalls encountered when attempting to either perform realistic quantitative risk assessments, make risk-informed decisions or facilitate a long-term continuous risk management program.
Economists predict that the Fourth Industrial Revolution (i.e. Industry 4.0) will cause fundament... more Economists predict that the Fourth Industrial Revolution (i.e. Industry 4.0) will cause fundamental disruption. Within the Engineering and Construction sector, a proliferation of data streams will provide new levels of diagnostic and predictive insight, increasing efficiency, decreasing uncertainty and improving the likelihood of successful project delivery. New technologies promise to make the theory of risk intelligent strategies a possibility for both companies large and small. However, studies frequently highlight that the E&C sector is a technological laggard. Additionally, for this sector, the most significant barrier to digital progress is the lack of an overall strategy. To prepare for disruptive change in the profession, this paper will explore: a) goals for data science capability improvement, b) how project controls professionals can develop and lead an effective digital strategy, c) process steps for effective data science, d) opportunities for employing machine intelligence throughout the investment funnel, e) minimally viable metrics to support decision and risk management between entities. Ultimately, the paper will advocate that the association consolidates related white papers and develops a Recommended Practice, guiding members on the skills and knowledge required to perform Total Cost Management Analytics (TCMA) and deliver effective, actionable insight that reduces capital project risk and uncertainty.
—At a time of economic uncertainty, the most successful and effective organizations offer the mar... more —At a time of economic uncertainty, the most successful and effective organizations offer the market predictability. In order to achieve predictability in project outturn, risk management is given equal importance alongside cost and schedule control. In turn, improved risk control and growing levels of risk intelligence are best facilitated by ongoing measurement. In this paper, the measurement of risk will be discussed (in a project or construction and engineering context) to help reinforce process integrity. Methods for the effective capture and sharing of risk data will be reviewed in conjunction with critical success factors, common key risk indicators (KRIs) and other widely held risk metrics and benchmarks. In addition, the benefit of periodic risk-based project audits will be explored. After establishing a link between risk and knowledge, the merits of a central risk management library or knowledge base for professional risk management practitioners will be considered with the goal of improving risk management implementation effectiveness at the organizational and industry level.
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Papers by James Arrow