Risk Management in the bidding context A Schedule Risk Analysis Approach

Abstract: Risk Management has emerged during the last decades and is now considered an indispensable component in management of projects. However, no attention has been directed towards Risk management in the bidding context. Uncertainties, but also the opportunities to affect project success, are extremely high during this phase. The purpose of this thesis has been to design a schedule risk analysis method with supporting methodology based on current research and to verify its usefulness in a business environment. We have conducted a case study at the Business Unit Gripen (BUG) subdivision of SAAB Aerospace. BUG produces large and complex offers of defense systems including the Gripen aircraft. Through interviews and participative observation we have gained an understanding of the bidding context and the requirements of risk management in this phase. The case has been used to verify the usefulness of the developed framework. The results of this thesis are a new framework for schedule risk analysis during the pre-project phases and an Excel-based model for estimation and quantification of schedule risks in project networks. The method and methodology developed seems to be able to produce schedules with better precision and quite easy to integrate in the offer process. We believe that the model is applicable to many other contexts, including ongoing projects in diverse industries where it is vital to assess uncertainties in project schedules.