Principles of Event Chain Methodology: – Risks, unforeseen, uncertainties, etc … To carry out a project is far from being a long quiet river. You spend a lot of time planning your project, taking into account all possible risks and contingencies. Yet, as soon as you start, a hazard occurs and your carefully prepared schedule quickly becomes obsolete. This unforeseen event forces you to update or redo a schedule for your project, with the risk that the same situation will happen again. You realize then that project planning is a waste of time.
This scenario is very common for projects with multiple risks and uncertainties, particularly for research and development projects and in the field of information technology. The methodology of the chain of events (e vent chain methodology) provides a solution to this problem. This post is all about the principles of event chain methodology.
Principles of Event Chain Methodology
This methodology offers a better alternative to the critical path method and the critical chain method. It is not a method of risk analysis, but rather a technique for analyzing the uncertainty of the planning of a project. The objective is to identify and manage events and strings of unforeseen events that may affect project planning.
This method uses a mathematical model that can easily be executed by software. The project manager must define the project schedule and the list of risks. For each risk, it must determine the likelihood of the risk occurring, the impact of the risk on the project (delay, increase in costs, triggering other risks, cancellation of tasks, etc.) and when the risk should occur during a task. The event chain methodology is based on six major principles.
- Risk time and Status
In general, a task is not a continuous and uniform procedure. It is affected by external events that move it from one status to another (completed, current, late). These events take place randomly during the execution of the task and have a negative impact on the whole project. For example, a delay in the delivery of construction equipment will delay the entire construction of a building. However, events can also have a positive impact, such as cost reduction due to change of supplier.
- The Chain of Events
These events can cause other events, which will create a chain of events. These event strings can significantly affect the progress of a project. For example, a change request will cause a delay on the task. In order to catch up, a collaborator who was working on another task was asked to come back. The problem is that it no longer advances on its task, resulting in a timeout. Which can lead the project to failure? Some events can instantly cause other events or change the status of a task.
- The Monte Carlo Simulation
Once you have defined events and event strings, use the Monte Carlo simulation to quantify the cumulative impact of these events on the project. Monte Carlo simulation is a computerized mathematical technique that allows for risk to be taken into account in quantitative analysis and decision making.
The likelihood of occurrence of hazards and their effects is used as input to the Monte Carlo analysis. This analysis provides a probability curve for project planning.
- Critical Event Strings
Critical events or critical event chains are those that are likely to severely impact the project. By identifying these critical events from the start, it is possible to mitigate their negative effects on the project. This type of event can be detected by examining the main project parameters such as duration or cost.
- Monitoring performance with the Chain of Events
It is essential that the project manager monitor the progress of a task in order to allow the use of up-to-date information in the Monte Carlo simulation. Thus, throughout the duration of the project, the probability of events can be calculated more accurately using real-time updated data.
- Diagrams of the Chain of Events
The diagrams in the chain of events are visual representations that show the relationships between events and tasks and their impacts. Event strings are represented by arrows that are associated with a particular task or a time interval on a Gantt chart. Each event and each event chain is represented by a different color. Global events affect all tasks in the project while local events affect only one task. Using the chain of events diagrams, the model and risk analysis are simplified.
The phenomena involved
The application of the chain of events methodology can lead to interesting phenomena, such as:
- Tasks that repeat: sometimes, certain events trigger the repetition of a task that has already been performed.
- Risk mitigation: if an event or chain of events occurs during the project, this requires mitigation efforts. A mitigation plan is then implemented, i.e. one or more tasks are added to extend the project schedule in the event of an event.
- Event-based resource allocation: This is the reallocation of resources from one task to another as a result of an event.
Projects are rarely scheduled as they involve risks and unforeseen events. As these uncertainties are often difficult to identify and analyze, this leads to skewed schedules resulting in delays, budget overruns, and even project failure.
The chain of events methodology greatly simplifies the definition and analysis of problems related to project planning. It makes it easier to organize projects with uncertainties. Finally, it provides better forecasts and better monitoring of the project.
Hello everyone! This is Richard Daniels, a full-time passionate researcher & blogger. He holds a Ph.D. degree in Economics. He loves to write about economics, e-commerce, and business-related topics for students to assist them in their studies. That's the sole purpose of Business Study Notes.
Love my efforts? Don't forget to share this blog.