Like businesses, public institutions need to protect their bottom lines. And because they too they operate in uncertain environments, @RISK can play as important a role in public sector management as it does in the running of profit-making enterprises. Last year in England, Her Majesty’s Prison Service began working with the project and cost consultant Faithful & Gould to study strategic management, building, and renovation in the Prison Service’s operations. The third partner in the arrangement was @RISK.
The Prison Service agenda included more than 80 projects throughout England —each with its own complexities—and Faithful & Gould’s first goal was to determine whether or not it would be feasible to model the uncertainties that lurked in the overall programme. The consulting firm began by running a series of risk identification workshops. Working with Prison Service staff, Faithful & Gould were able to identify all the significant cost and schedule risks—including the “show stoppers”— in the service’s capital works programme and to create a “risk register” for each of capital works projects. The information gathered in the workshops and supplied by project directors became the basis for Faithful & Gould’s model.
Using @RISK, the firm simulated cost and schedule scenarios for each of the capital works project on the Prison Service’s agenda. These analyses also accounted for the likelihood and effects of change in key variables. The results for the individual projects were then combined to simulate probable cash flows for the overall programme.
The firm’s cash flow simulations proved close enough to reality to assure the Prison Service of the validity of its capital works programme and to allow the service to make contingency plans to offset significant risks. Faithful & Gould will continue to protect the Service’s bottom line by using @RISK to spin out regular updates of the original model.
Go to the Faithful & Gould website.
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