The 2005 Futura Risk Management Conference and User Meeting was held in Möller Centre, Cambridge, United Kingdom, April 14th and 15th. Peter Adlington, Managing Director of Futura, welcomed nearly 40 attendees from the UK and Scandinavia to the Möller Centre at Churchill College, which is part of the University of Cambridge.

Keynote Address – ‘Tipping Risk over the Edge’

Johann Meeke (Willis)

Johann Meeke, from the global insurance broker, Willis, launched the Conference with a stimulating Keynote Address entitled ‘Tipping Risk over the Edge’. He said that his objective as the Keynote speaker was to encourage lateral thought as a foundation for the Conference. I f we think in the same way as we do in our normal day-to-day lives, then we lose some of the benefit of the shared experience.

He went on to say that risk is a practical thing. Life is always reminding us that events can progress in an unanticipated manner. We can theorise – yet ultimately the clock ticks and things happen. It was John Lennon who said “Life is what happens to you when you are busy doing other things”. Chaos often seems to describe how events unfold. Yet even in chaos we must manage events. A business has to consider the risk continuum stretching to the future – not just to a finite point in time. The most common view of risk is probabilistic. What is the likelihood of the event happening? I f it is very likely, we need to keep it in mind. If very unlikely, then we can maybe put it to one side. But how does the CEO of a major company determine which event, out of the millions that could happen, will cause the greatest threat to its survival?

Johann said that the Lichtenberg Method really helps to identify the key areas of concern, and the multi-disciplinary approach helps to connect people into the risk debate. The key thing is make risk management ‘live’ inside an organisation, to make it ingrained rather than peripheral to everyday management.

Use of the Futura Approach to improve Project Development Processes in an Oil Company

Tom Harding (OMV)

Tom Harding has been an active user of the Futura approach for many years, and he now acts as an internal consultant on project development processes for the Austrian oil company, OMV.

Tom described the project development process that is used by OMV, especially the key role that Futura uncertainty analysis plays in the phases up to sanction (when the Board decides to fund the project through to completion). With illustrations taken from projects in Austria, Tunisia, Venezuela, Austria, Libya and New Zealand, he illustrated how the Futura approach has been used in a variety of different ways. One of the Futura workshops only used the qualitative approach to assess the risks at a certain decision gate. This was then followed by prioritisation of the risks that were identified using a Boston Grid.

Another workshop related to operational safety, and yet another was used to identify and discuss lessons learned after a project had been completed. Other Futura workshops which were required as part of the mandatory decision gate process involved quantitative modelling of schedules and costs as well as the usual qualitative analysis stage. In one such case where OMV had a minority shareholding in the project, Tom’s Futura workshop so impressed the oil company which was operating the project that it purchase a Futura Nova software licence!

Conference Dinner

Delegates enjoyed a candlelit dinner in the ancient dining hall of Magdalene College after a brief tour of the historic centre of Cambridge aboard an open-top bus.

Friday 15 April 2005

Futura Nova – What’s New for 2005?

The Friday sessions began with a talk by Peter Adlington and Pekka Pajuoja about the new features in the upcoming maintenance release of Futura Nova. These included:

• full installation compatibility with Windows XP
• much easier specification of budget items and factors
• resizable cells in the Scenario Analysis window
• ability to export Scenario Analysis risk and opportunity data for use in Third Party or spreadsheet-based risk and opportunity registers
• text files automatically created for S-curve and Uncertainty Profile data which enables the data to be used to create the equivalent graphs in, for example, Excel. These files are located in the relevant project directory.

A number of minor bugs fixes were also outlined.

Workshop – Getting the Best out of an Analysis Group

Halvor Stormoen gave a stimulating introduction to some small group discussions about how to get the best out of an Analysis Group during an uncertainty analysis. He spoke about the quality of the Analysis Group as being one of the critical conditions for the Successive Principle to work effectively. This is given a strong emphasis in Steen Lichtenberg’s book (p. 37 + 43-45), and other professors and specialists have focused on the team as a main issue of their work. He highlighted the work of three in particular:

• Meredith Belbin – team roles, management teams
• Ichac Adizes – personal styles (PAEI), corporate lifecycles, decision making in groups
• James Surowiecki – his book ‘The Wisdom of Crowds’

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Use of Futura Schedule Uncertainty Analysis at EuroControl

David Marten, Reynir Sigurdsson and Peter Adlington

David Marten (EuroControl) and Reynir Sigurdsson (Integra Consult) with Gunnar Bohlin and Peter Adlington from Futura outlined the use of a Futura schedule analysis workshop to assess the probable timescales for a Strategic Safety Action Plan for improving air traffic safety across Europe.

David Marten began by explaining what Eurocontrol is, and that air traffic safety is crucial due to the rapid increase in the number of flights over Europe. There have been some wake-up calls in the recent past, including the aircraft collision at Linate airport in I taly in 2001 and a mid-air collision over Überlingen (Germany) in 2002. These events had resulted in the formation of an Action Group for ATM Safety (AGAS) in July 2002, comprising all the European States’ Air Traffic Management Regulators, Air Navigation Service Providers, Eurocontrol, Aircraft Operators ATC, and Airport & Airline Associations.

The subsequent report revealed that ATM Safety regulation & management frameworks were unevenly developed across Europe, and that leadership and commitment was lacking in some areas. Eight high priority areas had been identified, including safety-related human resources in ATM, Incident reporting and data sharing, runway safety, and the need to improve awareness of safety matters.

The Strategy Safety Action Plan listed about 350 actions, and the Futura schedule analysis workshop aimed to get an understanding as to when the SSAP was likely to be completed, compared with the target date of 31 January 2006. The results from the three day workshop indicated that the P50 completion date was more like late 2009 that early 2006. David Marten then explained that the workshop had been a real help in developing a more realistic strategy. The SSAP had been rescheduled to make all timescales in the Work Breakdown Structure achievable, dependencies had been included, and some Work Packages had been moved into a follow-up programme.

David said that the main benefits of the Uncertainty Analysis were that an unbiased review of a complex programme had been carried out; the methodology gave results in a short timeframe; it provided an independent assessment of the SSAP Implementation Programme’s chance of success; it had allowed early corrective action to be taken where unrealistic timescales were identified, it had provided an independent risk assessment framework that drew on the expertise of stakeholders; and finally, it had given confidence to Stakeholders that their concerns were being addressed.

Development of a ‘Fast-Track’ Futura Cost Uncertainty Analysis process at
the Danish Roads Directorate

Steen Lichtenberg and Anker Schrøder (Futura)

Steen and Anker have been working for the Danish Roads Directorate (DRD) since 2002 to develop a fast track cost uncertainty analysis process which lasts just a day for projects which are broadly similar in nature.

The Qualitative Analysis is based on nine categories of issues: weather; politics and legislation; market trends and prices; local/environmental factors; DRD and consultants; design and project development; tenders and execution; background data and miscellaneous factors; analysis-related uncertainty (evaluation biases, statistical dependencies).

The cost modelling is based around the uncertainties relating to the nine overall influence categories plus a single factor to reflect the uncertainty associated with the base cost itself. In order to save time at the calculation stage, the participants are asked to fill in a composite form which sets out all the individual assessments for each overall influence.

Thorough preparations are required prior to each analysis. Drafts of material for the analysis are given to participants ahead of time, any previous analyses are reviewed, and a complete set of forms to be used in the analysis is prepared. The calculation model in Futura Nova is also populated before the session with the numerical values of the base estimates.

The response to these risk analyses has been generally positive. The DRD participants overcame diary problems and faithfully attended the workshops, notwithstanding journeys of 3-4 hours both ways in many cases.

At this point in time it is hard to tell how successful this approach has been, but none of the results of ten updating analyses has exceeded the original mean value +/- one standard deviation.

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The Conference received a high level of positive feedback, both for the conference
content and for the excellent facilities offered at the Möller Centre.

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