What is IRRA

Time and cost outcomes of large and complex projects are forecast poorly across all sectors. Over recent years, Monte Carlo (MC) simulation has increasingly been adopted to forecast project time and cost outcomes more realistically. It is recognised that the simultaneous analysis of time and cost impacts makes sense as a modelling objective, due to the well-known relationship of time and money in projects. But most MC practitioners advocate the use of Schedule Risk Analysis (SRA) feeding into Cost Risk Analysis (CRA) because they believe it is too hard to perform Integrated Cost & Schedule Risk Analysis (IRA) realistically. This chapter elaborates an IRA methodology that produces realistic forecasts without relying on questionable assumptions and enables identification and ranking of all sources of cost uncertainty for risk optimisation as part of the process. It also describes an extension of IRA methodology to include assessment of the assets produced by the project as well as the project itself, thus enabling the analysis of business risks as well as project risks.