Procedure

The risk-based schedule is usually a better schedule estimate than your original one because it reflects your best estimates of what could go wrong (risk) and what could go right (controlling risk). Here is the procedure:

1. Prepare your regular project schedule using Microsoft Project. Use your best estimates of task durations and linkages. This project schedule does not reflect any risk assessment.

2. Prepare a risk matrix. Using the work breakdown structure (WBS) and the project schedule, rank all project tasks in terms of risk, designating them high, medium, or low.

a. A high-risk ranking shows a high probability (>50 percent) of the risk actually occurring, and that the risk will have a relatively severe impact on schedule, cost, and/or quality.

b. A medium-risk ranking implies less probability (<50 percent) of happening and less schedule impact c. A low-risk ranking implies very low probability (<10 percent) that the task will occur and low impact.

3. Select the five highest task risks (or more if you have more tasks that present risks that you want to reflect in your risk-based schedule).

4. Calculate the risk-based schedule. Your objective now is to calculate a risk-based schedule by taking each of the five highest-risk tasks and calculating a risk-based duration for each. Using Microsoft Project, follow these steps:

a. Pull the PERT Analysis toolbar up from the View pull-down menu b. Highlight one of the high-risk tasks on the Gantt chart c. Go to the PERT Entry Form and enter your duration estimates for that task for three scenariosâ€”expected (use the duration in your original schedule), pessimistic (worst case impact if risk occurs), and optimistic (best case, all risks controlled with no impacts)

d. Use the PERT Weight button to set the weights for each scenario (weights reflect the probability that a given risk and impact will happen). Microsoft Project uses a total weight scale of 6 points; your job is to divide the 6 points up among three scenariosâ€”expected, pessimistic, and optimistic. Note that the Microsoft Project "default" is 4 for expected (based on the high probability that the actual duration will fall somewhere between the two extremes) and 1 each for pessimistic and optimistic. You may want to change those weights based on your estimate of the relative probability that a given scenario is going to happen.

e. After you have entered weights, go to the PERT Calculation button and calculate the risk-based duration for that task based on your inputs.

f. Click the PERT Entry Sheet to see the newly calculated risk-based duration for the task compared to the three scenario durations (expected, pessimistic, and optimistic).

g. Repeat this procedure for the remaining high-risk tasks.

The resulting "rolled up" schedule is now a risk-based schedule, reflecting a new project duration.