Title: APRAM: an advanced programmatic risk analysis method

Authors: Robin L. Dillon, M. Elisabeth Pate-Cornell

Addresses: Virginia Tech, Pamplin College of Business, 7054 Haycock Road, Falls Church, VA 22043, USA. Stanford University, Department of Management Science and Engineering, Stanford, CA 94305, USA

Abstract: While engineering projects are expected to accomplish more with fewer resources, the dependencies among these projects have continually increased. At NASA, for example, faster-better-cheaper (FBC) projects are being grouped into programmes to enhance the benefits of synergies among smaller projects, and to attenuate, through diversification, the risks of single large missions. Under strict resource constraints, FBC project managers must balance several types of failure risks including the effect of their project|s performance on future missions. Existing risk analysis models generally focus on the quantification of either technical or management risks. These tools, while beneficial, are generally used in isolation, and tightening the constraints generally encourages decisions that can increase the risks of technical failure. Since it is difficult to balance simultaneously cost, schedule and performance of a given project as well as their effects on other projects, managers who face these problems can benefit from an integrated programmatic risk analysis. In this paper, we present an advanced programmatic risk analysis model (APRAM) that is based on probability and systems analysis. It includes both managerial and technical risks, and can support decisions such as the choice of a design and of a budget reserve at the onset of a project. The model starts with the analysis of the trade-off between reserves and system development, then incorporates the effects of testing and reviews, partial mission failures, and project dependencies within programmes. The method is illustrated by the schematic example of two projects in an unmanned space programme.

Keywords: programmatic risk; risk trade-offs; probabilistic risk analysis (PRA); faster-better-cheaper projects.

DOI: 10.1504/IJTPM.2001.001744

International Journal of Technology, Policy and Management, 2001 Vol.1 No.1, pp.47-65

Published online: 18 Aug 2003 *

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