Risk-Based Project Decisions in Situations of High Complexity and Deep Uncertainty

This book integrates for readers three areas of knowledge, pertaining to risk-based project decision making: project risk management (PRM), complexity theory, and decision-making under deep uncertainty (DMDU). Readers will appreciate that in practice, too often relevant complexity and uncertainty factors are either ignored or overlooked resulting in epic project failures. The author discusses a variety of methodologies and a decision-tree-type framework to determine why, when and how particular methodologies should be applied to ensure project success.  These include nonlinear Monte Carlo techniques, a dynamic adaptive methodology to adapt to external environment changes, game theory  for devising robust decision-making criteria, systems dynamics and cost escalation modelling, as well as risk-based & economic-based alternatives selection methodologies. This book will be an eye-opener for many PRM practitioners, helping to increase their chances of project success by properly handling inescapable project-complexity and deep-uncertainty implications in specific contexts.

Introduction.- PRM and types of project uncertainties.- Overview of DMDU methodologies.- Project complexity concept.- Decision-making framework.- Selection of project options in situations of deep uncertainty.- Development of project schedule and cost contingencies in complex projects.- Cost escalation and exchange-rate volatility risk assessment methods.- High-level overview of simplistic Monte Carlo and parametric risk assessment methods.- Case study 1: applications of a tradition PRM (scoring method).- Case study 2: applications of “linear Monte Carlo” methodology.- Case study 3: applications of “non-linear Monte Carlo” methodology.- Case study 4: selection of project options (a few “futures”).- Case study 5: selection of project options (multiple “futures”).- Case study 6: applications of cost escalation and exchange-rate volatility modelling methods.- Conclusion.

Dr Yuri Raydugin is Principal Consultant of Risk Services & Solution Inc^©, a Canadian consulting company. Previously Yuri worked for Saudi Aramco, Royal Dutch Shell, TransCanada Pipelines, and SNC-Lavalin managing risks of a number of projects. He has been involved in risk management of mega and large projects with combined budget exceeding $170B. Depending on project context and challenges, Yuri applies a variety of relevant risk management methods and tools –both traditional and advanced – to properly manage project complexity and deep uncertainty, to facilitate project decision-making and to ensure project success.

Born and raised in Ekaterinburg, Russia, Yuri currently lives and works in Calgary, Alberta, Canada.