with Excel Integration
Javier Ordonez, Ph.D., PMP jordonez@palisade.com

Project Risk & Uncertainty
» Project risk is defined as the possibility that the outcome of an uncertain event affects negatively or positively the cost and time performance of project activities and/or their planned execution
Risk = Consequence x Probability of Occurrence
» Uncertainty is defined as the lack of knowledge about the parameters that characterize the system

Project Risk Analysis
» Schedule Risk Analysis :
• Quantification of uncertainty in activity durations
• Quantification of uncertainty in project duration
• Quantifying the impact of risk events and opportunities
• Allocation and management of contingencies
» Simulation:
• Overcome the limitations of CPM/PERT
• Generates scenarios involving a random set of durations. Each scenario produce a deterministic CPM deterministic schedule.
• At the end, analyze the results of the scenarios to understand the range of variability in project duration
• It requires activity information and distributions
• Can model correlations among activities’ durations
• Can obtain information of how critical is an activity
• Can make use of probabilistic or conditional branching

Risks Events vs. Uncertainty
Uncertainty
$ o Time
Risk Events’ Impacts

Qualitative Risk Analysis
Likelihood
Not Likely
Low
Likelihood
Likely
High Likely
Near
Certainty
Score
1
2
3
4
5
Schedule
Minimal or no impact
Additional activities required; able to meet key dates
Minor schedule slip; will miss need date
Project critical path affected
Cannot achieve key project milestone
Risk Register
Priority Descript ion
Activities
Affected
Cost /
Time
Impact
1
… n
1 2 3 4 5
Consequence
Cost
Minimal or no impact
Budget increase <1%
Budget increase <5%
Budget increase <10%
Budget increase >10%
Technical
Minimal or no impact
Minor performance shortfall, same approach retained
Moderate performance shortfall, but workarounds available
Unacceptable, but workaround available
Unacceptable, no alternatives exist
Score
1
2
3
4
5

» Allows simulation of project schedules using @RISK for Excel
» Modeling is done in Excel vs earlier versions of @RISK for Project where all modeling was done in Microsoft Project
» All scheduling calculations are still done in
Project
» How does this happen?

» A new communication layer between Excel and Project was built
» This allows live updating of schedules in
Project when changes are made in Excel
» Combines the best of two worlds – Excel formulas, functions, graphs and the
Microsoft Project scheduling engine

» An installed copy of Excel and the new version of @RISK for Excel that supports project schedules
» An installed copy of Microsoft Project 2003 or higher
» Project schedules in MPP format that they want to analyze for risk

» It’s @RISK for Excel for entering distributions, simulating, fitting, sensitivity analysis, etc.
» Formulas can be used in schedules to link to other calculations in Excel and perform calculations that are very difficult to do in
Project
» Some new modeling tools are available in
Excel that support project-specific functions
(probabilistic branching and calendars, categories, parameter entry tables)

» Probabilistic Time-Scaled Reports and
Graphs
» Schedule Auditing
» Excel integration will make it much easier to combine cost and schedule risk analysis
» Cost data (typically modeled in Excel) can be easily linked with formulas to the Excel view of the project schedule

» Users will now have access to many important capabilities that were not available in earlier versions of @RISK for
Project, including:
- Alternate Parameters
- Improved @RISK 5.x graphing
- Browsing
- Automation API
- @RISK statistics functions

» When a project that was used with earlier versions of @RISK for Project is opened in
@RISK for Excel:
- All distributions are converted to equivalent
@RISK for Excel functions
- Probabilistic Branching, If-Then conditions,
Variables and Probabilistic Calendars are converted to their Excel equivalents
» Goal is 100% backward compatibility

» Project takes the values sampled in @RISK for
Excel or calculated with Excel formulas
» Values are sent to Project and the schedule is recalculated using those values
» Results go back to @RISK for Excel
» Thus, all schedule calculations during simulations are done in Project
» This ensures that results are calculated just as an add-in to Project would do
» We did not build our own scheduling engine to replace Project’s

» Speed – Many models will simulate faster, some run at same speed
» Linking Workbook to MPP – when a workbook / MPP combo is opened,
@RISK syncs changed values in Project to the workbook in Excel
» Thus, if a schedule is updated in Project without @RISK, Excel will show the updated values

15

» First, the .MPP file is opened in Excel using the
Open command on the new Project menu in
@RISK for Excel. The schedule, Gantt chart, etc. are imported into Excel.
» Once the schedule is displayed in Excel, the new workbook can be saved
» If the workbook is opened later, the associated
MPP file is automatically opened and linked to the workbook
» You still build your schedules in Project – then use
@RISK for Excel for risk analysis

» Companies can standardize on @RISK for
Excel, and get risk analysis for project schedules too
» One interface, lower learning curve for users
» Easy access to modeling in Excel when working with projects (formulas, charts, functions, etc.)
» Modeling is done better in Excel, not Project

» Localized in Spanish, Portuguese, French,
German, Japanese, and Chinese
» Provides access to other add-ins in Excel
(such as optimizers) for schedules
» Enables combined analysis with other
DecisionTools Suite products