ValidRisk

Do you know ValidRisk ? ?? In one minute John Hollmann introduces about #ValidRisk. ? Who is John Hollmann? ?? John Hollmann works with capital program senior managers and project leaders to improve practices in Cost Engineering; particularly for cost estimating, project control and cost and schedule risk quantification. John regularly reviews major project cost estimates and conducts risk analyses in support of investment decision making for oil and gas, refining, chemicals, pipeline, mining, metals, power generation and transmission as well as other process industry projects. ? What is #ValidRisk? ???https://validrisk.com/ ValidRisk is unique project cost and schedule quantitative risk analysis ?? ?? software that uses a hybrid method to support contingency and reserve determination in a way that is realistic, practical, risk-driven, integrated and empirically sound. ? Employs a hybrid method that combines parametric modeling of systemic project risk along with the time-tested expected value method with Monte Carlo simulation for project-specific risks (i.e., risk events). The hybrid method is documented in AACE? International Recommended Practice RP 113R-20 ??. ? The methods are documented in the?book “Project Risk Quantification”?by ValidRisk alliance partner?John Hollmann ? Designed to provide advantages over “Ranging” (often incorrectly call the?#MonteCarlo?method) and CPM-based methods (but, can enhance CPM in hybrid application).?? ? If you want to know more, please write us to: [email protected] ? ValidRisk is a product made by Koff & Guerrero Consultants S.A. ? #projectmanagement?#elearning?#management?#benchmark?#costcontrol? #riskmanager?#riskanalysis?#validrisk?#riskmanagement?#cost #infrastructure?#megaprojects?#project? #riskanalysis?#QuantificationRisk?#projects?#ValidRisk?#QRA? #risk?#masterclass?#CleopatraEnterprise?#QRA?#QuantitativeRiskAnalysis?

Cost Engineering: A Core Discipline of Engineering ?? At ValidRisk, we recognize the pivotal role of Cost Engineering in the engineering profession. Far from being a separate or secondary practice, Cost Engineering—encompassing estimating, cost control, and engineering economics—has its roots deeply embedded in the engineering body of knowledge since the early 20th century. Key Insights from the Article ?? 1?? Historical Foundations in Engineering By the 1920s, Civil Engineering established the principles of Cost Engineering. It was understood that cost estimating and economic analysis were central to the engineering profession, forming a continuum with design and management functions. 2?? The Role of AACE The Association for the Advancement of Cost Engineering (AACE) emerged uniquely as an engineering-focused organization emphasizing profitability. Unlike other associations, AACE's focus on investment decision-making and its ties to engineering origins set it apart in the fields of project and cost management. 3?? Engineering Prestige and Decision-Making Historically, engineers sought proximity to decision-making processes to elevate their societal standing and professional influence. Cost Engineering’s integration with profitability and decision-making reflects this drive, demonstrating its value beyond technical design. 4?? The Influence of Chemical Engineering Chemical Engineering’s newness in the early 20th century presented an opportunity for Cost Engineering to establish itself as a distinct discipline. For example, cost data for process industries wasn’t formalized until 1949, highlighting the need for specialized expertise. Why This Matters Today ?? Cost Engineering remains the only profession within project and cost management that defines itself as part of engineering practice. This legacy underscores its critical role in decision-making, resource optimization, and profitability—a distinction ValidRisk proudly aligns with in our work. At ValidRisk, we value the depth of history and innovation that shapes our profession. Cost Engineering is not just a technical practice; it is a bridge between engineering precision and strategic decision-making. Let’s continue honoring this tradition by driving value and delivering results in every project we undertake. #CostEngineering #EngineeringExcellence #ProjectManagement #RiskManagement #AACE #RiskManagement #SystemicRisk #ProjectManagement #ValidRisk #MonteCarloSimulation #RiskAnalysis #CostEngineering #CostEngineer #MegaProjects

Cost Engineering: A Core Discipline of Engineering ?? At ValidRisk, we recognize the pivotal role of Cost Engineering in the engineering profession. Far from being a separate or secondary practice, Cost Engineering—encompassing estimating, cost control, and engineering economics—has its roots deeply embedded in the engineering body of knowledge since the early 20th century. Key Insights from the Article ?? 1?? Historical Foundations in Engineering By the 1920s, Civil Engineering established the principles of Cost Engineering. It was understood that cost estimating and economic analysis were central to the engineering profession, forming a continuum with design and management functions. 2?? The Role of AACE The Association for the Advancement of Cost Engineering (AACE) emerged uniquely as an engineering-focused organization emphasizing profitability. Unlike other associations, AACE's focus on investment decision-making and its ties to engineering origins set it apart in the fields of project and cost management. 3?? Engineering Prestige and Decision-Making Historically, engineers sought proximity to decision-making processes to elevate their societal standing and professional influence. Cost Engineering’s integration with profitability and decision-making reflects this drive, demonstrating its value beyond technical design. 4?? The Influence of Chemical Engineering Chemical Engineering’s newness in the early 20th century presented an opportunity for Cost Engineering to establish itself as a distinct discipline. For example, cost data for process industries wasn’t formalized until 1949, highlighting the need for specialized expertise. Why This Matters Today ?? Cost Engineering remains the only profession within project and cost management that defines itself as part of engineering practice. This legacy underscores its critical role in decision-making, resource optimization, and profitability—a distinction ValidRisk proudly aligns with in our work. At ValidRisk, we value the depth of history and innovation that shapes our profession. Cost Engineering is not just a technical practice; it is a bridge between engineering precision and strategic decision-making. Let’s continue honoring this tradition by driving value and delivering results in every project we undertake. #CostEngineering #EngineeringExcellence #ProjectManagement #RiskManagement #AACE #RiskManagement #SystemicRisk #ProjectManagement #ValidRisk #MonteCarloSimulation #RiskAnalysis #CostEngineering #CostEngineer #MegaProjects

How to Manage Project-Specific Risks Without Overwhelming Your Analysis? With ValidRisk, we use a hybrid method combining a parametric model and Monte Carlo simulation to address both systemic and project-specific risks. This approach enables teams to focus on critical risks that genuinely impact project success, rather than being weighed down by every minor potential risk. ?? Project-Specific Risks: These are unique events or conditions, such as supply disruptions or adverse geological findings, that can significantly alter costs or schedules. With ValidRisk, we quantify only critical risks—those with a material impact on project success. ?? Streamlined Process: Critical risks are selected and documented in a “risk matrix,” allowing the team to prioritize the treatment of risks that truly matter. The outcome? Clear impact estimates and a simplified analysis, empowering more strategic decision-making. By avoiding reliance on qualitative assessments, ValidRisk ensures teams are prepared with defined responses. Ultimately, projects benefit from an integrated approach, providing a clear and reliable evaluation of the probability and real impact of the most important risks. #RiskManagement #SystemicRisk #ProjectManagement #ValidRisk #MonteCarloSimulation #RiskAnalysis #CostEngineering #CostEngineer #MegaProjects

?? Rethinking Risk Ranking and Management Reserves: ValidRisk’s Hybrid Approach to Systemic and Project-Specific Risks In traditional risk management, Monte Carlo simulations often produce a tornado diagram that highlights risks by their contribution to the overall uncertainty. However, in the ValidRisk hybrid approach, systemic risks require a different lens. Here’s why: When analyzing systemic risks—those rooted in the interconnected aspects of a unified system—valid insights emerge only when viewing them holistically. Systemic risks dominate in a tornado diagram, often obscuring project-specific risks that may warrant targeted attention. The ValidRisk method introduces two specialized tools for a more insightful analysis: 1) Spider Diagram for Systemic Risks: This visual tool highlights which parameters of a parametric model deviate most from their ideal ratings, enabling management to prioritize interventions on these weak points, strengthening the entire system. 2) Comprehensive Ranking Table for Project-Specific Risks: Moving beyond the tornado diagram, our ranking table sorts risks across three criteria: - Expected Cost Value (EV) - Most Likely Cost Impact if Occurs - Worst-Case Cost Impact if Occurs This multidimensional view clarifies which risks pose the most significant threat, regardless of probability, and helps management focus on high-impact, low-probability risks that could overwhelm contingencies. Strategic Use of Management Reserves vs. Contingency Funds The ValidRisk ranking table supports crucial funding decisions by differentiating between risks suited for contingency and those better managed as reserve items. Contingency funds can handle incremental risk impacts, but risks with low probability and high impact require dedicated reserves. Our approach offers two distributions: one for typical risks managed through contingency, and another for high-impact risks handled through reserves. With ValidRisk, management gains a clearer roadmap to allocate resources strategically, strengthening overall project resilience. For leaders in risk management, ValidRisk brings precision to prioritizing and funding risk events effectively. John Hollmann #RiskManagement #SystemicRisk #ProjectManagement #ValidRisk?#MonteCarloSimulation #RiskAnalysis #CostEngineering #CostEngineer #MegaProjects

Does the fear of uncertainty haunt your projects? Every project brings with it specters of risk and uncertainty that can shake up your costs and timelines, but they don’t have to scare you! This season, face those "monsters" with ValidRisk: a powerful analysis tool that sheds light on the darkest corners of your projects. By combining Monte Carlo simulation with parametric modeling, it reveals the true face of risks, helping you make secure and well-informed decisions. ?? Don't let the unexpected torment you. This season, turn fear into control with ValidRisk. ???More info: www.validrisk.com #RiskManagement #ProjectRisk #QuantitativeAnalysis #ValidRisk #MonteCarloSimulation #RiskAnalysis #CostControl #ParametricModeling #MegaProjects #CostEngineering

?? Managing Program Risk with ValidRisk ?? Large-scale programs, including megaprojects, are complex and typically made up of multiple sub-projects. Each of these sub-projects often has its own project manager and unique challenges. But when a program is funded and managed as a whole, understanding the total risk picture is critical. So how do we quantify the overall program risk, especially when sub-projects interact with each other? That’s where ValidRisk comes in. ValidRisk is a powerful tool designed to perform Quantitative Risk Analysis (QRA) at both the project and program levels. It features a Program Consolidator, which allows project cost distributions to be integrated and correlated, giving you a comprehensive view of the entire program's risk. One major concern at the program level is interaction risk—the risks that arise when sub-projects compete for resources or impact each other’s performance. ValidRisk makes it possible to account for these complexities, ensuring your risk assessment is complete and accurate. ?? How does it work? Each sub-project undergoes its own QRA using ValidRisk. The outputs are then consolidated, allowing correlation between sub-project risks. Interaction risks are incorporated to provide a full picture. Monte Carlo simulations deliver a comprehensive program cost distribution, helping define the appropriate contingency or reserve for the program. This integrated approach ensures that programs are not only managed effectively, but that potential risks are thoroughly understood and mitigated. Let ValidRisk be your guide in managing complex programs, ensuring no risk is left unaccounted for. https://validrisk.com/ #ProjectManagement #ProgramRisk #QuantitativeRiskAnalysis #ValidRisk #RiskManagement #Megaprojects #RiskAnalysis

?? ValidRisk: Your Trusted Partner for Accurate Risk Quantification At ValidRisk, we understand that accurate risk quantification is essential for project success. Our software uses cutting-edge parametric modeling and Monte Carlo simulations to help you confidently determine the right contingencies and reserves for your projects. Why settle for traditional risk assessment methods when you can achieve more precise and actionable results with ValidRisk? Developed with the expertise of John Hollmann and based on AACE? International’s RP 113R-20, ValidRisk is designed to overcome the limitations of older methods and optimize your project’s risk management. ?? Key Benefits: Improved accuracy with parametric modeling. Hybrid approach to risk analysis. Trusted by industry experts. Unlock the full potential of your risk management strategy with ValidRisk! ?? John Hollmann #ProjectManagement #RiskAnalysis #ValidRisk #ParametricModeling

?? Take Control of Project Risk with ValidRisk Are you ready to move beyond traditional risk analysis methods? ValidRisk offers a next-generation solution for quantitative project risk analysis, using parametric modeling and Monte Carlo simulations to provide more accurate contingency and reserve estimates. ?? Our hybrid approach, based on the AACE? International’s RP 113R-20, helps project teams avoid the limitations of conventional CPM and Ranging methods, delivering better insights and more reliable outcomes. ?? What sets ValidRisk apart? ?? Hybrid risk quantification techniques. ?? Parametric modeling and Monte Carlo simulations. ?? Designed to improve decision-making for project contingencies. Let ValidRisk transform the way you manage project risks! ?? John Hollmann #RiskManagement #ProjectRisk #QuantitativeAnalysis #ValidRisk #MonteCarloSimulation #AACE #RiskAnalysis #ParametricModeling

?? Cost Engineering Risk: A Key Factor to Control ?? Cost engineering risk refers to the uncertainty surrounding project costs, which can lead to final costs exceeding initial estimates. ?? This can happen due to design changes, unexpected increases in material prices, or unforeseen issues during construction. ?? How can you mitigate these risks? A proper risk analysis is crucial to foresee and control these financial impacts, providing the information needed to make informed decisions. ?? This is where ValidRisk comes in. Backed by the methodology of John Hollmann, ValidRisk uses a hybrid approach combining parametric modeling and Monte Carlo simulation to accurately quantify cost and schedule risks. ?? This software goes beyond traditional methods, enabling companies to better identify the necessary contingencies and ensure projects stay within budget. ?? With ValidRisk, companies can make more confident decisions, optimizing cost control and minimizing unnecessary risks. Don't let uncertainty compromise your project’s success! #CostEngineering #RiskAnalysis #ValidRisk #ProjectManagement