28 PM NETWORK SEP TEMBER 2015 WWW.PMI.ORG
VOICES In the Trenches
FEDERATION TOWER IS ONE OF THE LARGEST
construction projects in Moscow, Russia, but it has
had a troubled history. The project team initially
planned a 62-story west tower and a 93-story east
tower, with a 506-meter spire in between. In 2008,
the west tower was completed, but work on the
partially built east tower was suspended due to
lack of funding. Construction resumed in 2011,
but the halt had caused technical issues that had
to be fixed. The next year, a fire delayed the project
again. Then a main contractor was replaced. In
2014, stakeholders decided to demolish the partially erected spire, change the design and increase
the number of floors to 95. The plan is now to
complete the tower this year.
Project managers viewing this troubled project
might wonder: Could improved risk management
have prevented any of this delay and rework? Fortunately, modern risk analysis techniques allow us to
create an accurate project forecast with ranges that
account for risks and uncertainties. By accurately
estimating the probability and impact of risk drivers, we can create a risk-adjusted project schedule.
Analyzing this schedule provides us with answers
to very important questions: What happens to
the schedule if certain risks occur, and what is the
chance that the project or a certain milestone will
be completed on time and on budget?
In the case of Federation Tower’s east tower,
the delays and extra costs were caused not only
by separate events, but by chains of events: The
global financial crisis led to the suspension of con-
struction, which eventually caused design changes
and the decision to demolish the spire. Such event
chains may lead to a dramatic escalation of project
costs and major delays.
So the next step toward a better modeling of
project uncertainties is event chain methodology. This focuses on analyzing the relationship
between events: Events can trigger other events,
which may require mitigation and response activities that create their own events. Event chain
methodology also helps us perform a risk analysis
of portfolios, since the same risk can affect different projects.
It might sound complex, but it doesn’t have to
be. Here is a brief outline of how to perform event
How to analyze project risks using event chain methodology.
By Lev Virine and Michael Trumper
impact of risk
drivers, we can
create a risk-
Event chain diagram