The Project Manager's Playbook: Managing Risks with Control and Analysis in Primavera P6

 

A project is almost always executed in an uncertain environment and hence will entail risks. Project management, on the other hand, tries to bring certainty into this uncertain work and therefore invariably involves risk management.

Risk management on its own can be – and indeed is – many times a dedicated function of its own for highly risky projects, but that doesn’t remove the role of a project manager. You as a project manager must know risk management irrespective of riskiness – high or low – of the project. However, the reverse, i.e., a risk manager playing the role of a project manager, may not always be true.

Hence, if a project management software tool provides capabilities to manage risks, it’ll stand out among its peers. Primavera P6 Professional is one such software tool and comes with certain integrated risk management capabilities to help PMs.

In this article, we learn more about Primavera P6. This article is about project managers steering their projects with risk management, but is equally applicable to other team members, including the risk manager.

So, let’s start with our project plan first. But before that let’s discuss briefly how Primavera P6 considers project risks.

Primavera P6: Project Risks and Risk Types *** UPDATED ***

Primavera P6 provides the following definition of risk:

Risks are any uncertain events or conditions that, if they occur, have a positive or negative effect on project objectives.

As you can see, a risk can be an event or condition. It can lead to positive or negative effect, impact or consequence. The impact is always on the project objectives.

This leads to another understanding, which is called Risk Types. There are two types of risks considered in Primavera P6:

• Positive risks, which will have a positive effect on the project objectives. These are also called Opportunities.
• Negative risks, which will have a negative effect on the project objectives.  These are also called Threats.

These definitions are quite similar to the ones provided in the RMP Live Lessons course, where risk management is explained comprehensively. 

Now, risk management in P6 considers both, i.e., management of both threats and opportunities. While managing risks with P6, we try to reduce the probability and/or impact of the threats and enhance the probability and/or impact of opportunities.

Primavera P6: Our Project Plan

We have the following project plan, WebMS (Risk Management), created with the help of Primavera P6. 

As shown above, for our project, we have a number activities associated with various work breakdown structure (WBS) elements. For example, under the WBS element of the Design and Development phase, we have four activities, and under Milestones we have two milestones. In P6, milestones are also one of the activity types.

We are going to identify the risks for this project using the capability provided in the software tool.

Primavera P6: Opening Risks Window 

After the risks are identified, to add them into the plan, go to Project menu > Risks to open the Risks window. You can also visualize the Risks window by clicking on the Risks icon on the Project toolbar, shown in the left side of the toolbars.

As you click on the Risks icon on the Project toolbar or go to the Risks command under the Project menu, it will open-up the Risks window as shown below. 

As shown above, in this window we have the following parameters shown:

• Risk ID: The risk identifier, which uniquely identifies the risk,
• Risk Name: The name of the risk.
• Risk Category: The category to which the risk belongs to. The category can be People, Cost, Contract, Time, Project Management or others.
• Risk Type: The type of the risk, which can be only two as we learned before.
• Risk Status: There can be varieties of statues such as Proposed, Active, Closed.
• Risk Owner: The owner of the risk for end-to-end risk management.
• Identified By: The person who has identified the risk.
• Identified On: The date on which the risk is identified.

In addition, there are a number of other parameters, which can be seen in various tabs of the bottom-pane of the Risks window.

Primavera P6: Adding Risks 

Next, to add the risks, go to Edit menu > Add command, while you’re in the Risks window. Otherwise, you can choose to click on “+” icon on the Edit toolbar, which is usually to the extreme right. 

This will add or create a New Risk – displayed as (New Risk) above. This newly created risk will have certain default risk parameters associated. For example, by default:

• Risk ID will be 1. If you add another, Risk ID will be 2 and so on.
• Risk Type will be Threat.
• Risk Status will be Proposed

After you add a number of risks, we have the following view.

As shown, we have three risks, each with a unique Risk ID.

• RISK1 – Poor design specification.
• RISK2 – Key resources unavailable.
• RISK3 – Reuse of previous design module.

While the former two are threats, the latter is an opportunity. Do notice changes in color coding based on risk types.

Primavera P6: Modifying Risk Parameters

As you add the risks, you can see there are a number of default risk parameters. Some of them are:

• Risk ID: Uniquely assigned, though it can be edited.
• Risk Name: Takes user provided name.
• Risk Type: Default one is Threat, but can be changed.
• Risk Status: Default one is Proposed, but can be changed.
• Risk Exposure Start: Default one is the project’s start date.
• Risk Exposure Finish: Default one is the project’s finish date.
• Project Name: The currently opened project.

You can definitely add the other parameters such as Risk Owner, Risk Identifier, Risk Identification date, among others.

For example, to have the Risk Owner, select the particular field and click on the “…” icon. It’ll open the Select Risk Owner dialog box. From these, select the resource and assign the owner by clicking on the “+” symbol as shown below. 

Go on adding the risks, which you and your team have identified. Risk identification is an iterative process and can happen any time during the project life cycle. In our case, after we added the risks, the view comes as shown below. 

A few things can be noted by looking at the above figure:

• A negative risk or threat is shown with a red colored dice.
• A positive risk or opportunity is shown with a white colored dice.
• Additional risk parameters are shown in the bottom-half of the Risks window. There are various tabs under it such as General, Impact, Activities, among others.

Primavera P6: Determining the Risk Score

This is one of the critical areas in risk management, which confuses many. It’s actually not that complicated once you understand the fundamentals. To have a strong foundational grasp, I’d strongly recommend that you read this article: Risk Matrix reporting.

The Risk Score in Primavera P6 is determined by its own Probability*Impact (PI) matrix. In P6, there are actually two overall risk score fields seen the Impact tab of the bottom pane:

• Pre-response Risk Score: It’s the risk score before a risk response strategy has been applied.
• Post-response Risk Score: It’s the risk score after a risk response strategy is taken. 

As shown above, for both Pre- and Post-response, we have three fields to consider.

• Probability: It’s the chance of risk occurrence
• Schedule: The impact of the risk on schedule should the concerned risk occur.
• Cost: The cost impact of the risk should the concerned risk occur.

In other words, you can say that the Risk Score is calculated based on the values you select for the above three fields under the Impact tab. All these three fields have scales associated.

For the Probability field, the scales are noted in the tables below. 

For the two impact fields of schedule and cost, the scales are noted in the tables below. To reiterate, all these fields will be used to determine the risk score. 

Primavera Risk Analysis (PRA): Additional Impact Types *** NEW ***

As noted above, P6 has three primary impact parameters. However, in the real world, risk managers often require additional parameters such as quality, performance, and others to calculate pre- and post-response scores.

Indeed, risk management literature and real-world applications allow for various types of impact parameters.

In such cases, you can use another software tool: Primavera Risk Analysis (PRA). The PRA software is quite different. Its application to practical projects and use cases are comprehensively explained in the course below.

Practical Risk Management with Primavera Risk Analysis

The course described above has been utilized by professionals as well as aspiring PhDs seeking dedicated and comprehensive risk management for their projects. In fact, many projects demand such rigorous analysis.  

Primavera P6: Risk Response Strategies

Now that we have understood the scales based on which risk score will be determined, let’s see it in action. This goes hand-in-hand with risk response types or strategies. There are many ways you can plan for the risk response types in Primavera P6.

Taking an example, let’s take RISK 1 – Poor design specification. For this risk, the pre-response fields are taken as shown below. 

As shown above, for RISK1:

• Probability = 1 – Very High (70% or higher),
• Schedule (Impact) = 2 – Very High (10% to 20%), and
• Cost (Impact) =3 – Medium (10% to 20%).

Based on the above value under the probability and impact fields, the Risk Score has been auto-calculated as 36.

Next, we’ve to reduce the score of this risk as it’s a threat. To understand more on risk response strategies (or types), I’d strongly encourage you to read this article. Primavera P6 approach to risk management is somewhat similar, though it provides its own risk response types.

For our case in Primavera P6, we will have the Reduce response type and populate the corresponding field. One can also have a detailed risk response description. As you complete doing that, we will have the following view. 

Again, for RISK1, after we took the risk response:

• Probability = 4 – Low (10% to 30%),
• Schedule (Impact) = 4 – Low (1% to 5%), and
• Cost (Impact) = 5 – Very Low (Up to 1%).

After the risk response, the risk score has been reduced to 3, which was 36 earlier!

You continue doing that for all the risks identified for the project and do it iteratively.

Primavera P6: Brief Video Demonstration *** NEW ***

The below video [duration: 8m approx.] prepared in support of this article explains more on the risk management. To get the most out of this article, watch the video along with this article. For the best experience, go full-screen HD mode and plug-in your earphones. Exhaustive explanations are available in Primavera P6 Pro Live Lessons course.

Conclusion

Risk management is essential in any project as outlined in the beginning of this article. It not only protects your project(s) against uncertainty, volatility, and ambiguity, but also results in improved decision-making, ensures regulatory compliance wherever needed and prohibits your project(s) from getting completely derailed.

Usually, the risk is highest during the initial stages of the project and usage of software tools such as Primavera P6 Professional can help mitigate a number of risks. In addition, the Primavera P6 software tool also provides issue management and threshold management capabilities.

Finally, as we close this article, I’d say the following. 

In the realm of projects, certainty is a rare guest. A project, which is a temporary endeavor, unfolds in this landscape of uncertainties. Project management rises in this landscape, and hence, to manage a project is to manage its risks. As we just learned, Primavera P6 is not just about project management but also a partner for you in managing project risks.

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This article was first published by MPUG on September 30, 2025. This an updated version. 

References

[1] In-depth, Practical Course: Primavera P6 Pro Live Lessons, by ManagementYogi.com

[2] RMP Live Lessons – Guaranteed Pass, by ManagementYogi.com

[3] RMP 30/40 Contact Hours, by ManagementYogi.com

[4] Practical RMP with Primavera Risk Analysis, by ManagementYogi.com

Primavera P6 Pro Live Lessons – Understanding and Applying Crashing and Fast Tracking

There are many ways to compress a schedule. You can add more resources, change the relationship among the activities or tasks, run activities in parallel, reduce the float in certain cases, among others. 

However, two schedule compression techniques are quite popular and they are:

1. Crashing
2. Fast Tracking

Crashing, by introducing more resources, increases cost. On the other hand, fast tracking, by ignoring relationships (dependencies), increases risks. Crashing can also increase risks. Fast tracking can increase cost as well! 

In Primavera P6, we can apply both these schedule compression techniques. In this post, we will learn how to use such techniques. If you are aspiring to be a Project Management Professional (PMP®), or Risk Management Professional (RMP®), you’ll quickly understand. Nevertheless, if you are not one, but aspiring to be one, then also you will understand. 

The content of this article is taken from the Primavera P6 Pro Live Lessons course – an exhaustive course covering various functionalities and capabilities Primavera P6 Professional with respect to project management. There, I've used and explained with live P6 projects.

Now, let’s briefly understand the background concepts of these two techniques.

Understanding Crashing

Crashing compresses the schedule by adding more resources. This technique used shortens the schedule duration for the least incremental cost. 

Examples: A real-time example is working overtime. Another real-time example is paying more to deliver faster.

As more resources are added, cost increases. Risk may also increase. Let us take an example. We've 3 activities: 

• Activity A1, A2 and A3 with one resource assigned. 
• The activities are sequential, i.e., A3 will follow A1 and A2 will follow A1.
• The duration for each activity is 2 days. 
• The total duration is 2 + 2 + 2 = 6 days

Next, we added one more resource for each activity to crash. So, now:

• Activity A1, A2 and A3 have two resources assigned. 
• The duration for each activity will be reduced to 1 day.
• The total duration is 1 + 1 + 1 = 3 days.

With crashing, we reduced the combined duration of three activities from 6 days to 3 days. This is a form of schedule compression. Isn't it?

Understanding Fast Tracking

Fast Tracking compresses the schedule by making the activities parallel instead of sequential. This can happen for a portion of the schedule. 

Examples: Preparing the test plan along with the approval of the Product Requirements documentation. Another real-time example is cooking two items together, but on two separate burners of your stove.

As activities are executed in parallel and original relationships are changed, risk increases. Cost may also increase due to rework. 

Let’s reuse our previous example. We've 3 activities:

• Activity A1, A2 and A3 with one resource assigned. 
• The activities are sequential, i.e., A3 will follow A1 (FS relationship) and A2 will follow A1 (FS relationship).
• FS stands for Finish to Start relationship.
• The duration for each activity is 2 days. 
• The total duration is 2 + 2 + 2 = 6 days

Next, we changed the relationships among the activities to Start to Start (SS) or Finish to Finish (FF) in order to fast track. So, now:

• The activities are parallel, i.e., A3 will start with A2 (FF relationship) and A2 will start with A1 (SS relationship).
• The duration for each activity remains as 2 days. 
• But the total duration is now 2 days as all activities are done in parallel.

In this case of fast tracking, we reduced the combined duration of three activities from 6 days to 2 days.

This is another form of schedule compression. 

Primavera P6 – Applying Crashing

Primavera P6 exactly follows our previous explanation of Crashing. Again, we will reuse our example for crashing.

As shown below, we have three activities – A1, A2 and A3, each with one resource. These are done in sequence. (click on the image to enlarge) 

The total duration as shown above is 6 days.

Next, we added more resources – one more resource for each activity. With it the total duration was reduced.  

The total duration now shown above is 2 days. Note that we have added two resources (Res1 and Res2) for each activity.

Hence, we can say with crashing we compressed the schedule. 

Primavera P6 – Applying Fast Tracking

Here too, Primavera P6 follows the previous explanation of Fast Tracking. We will reuse our example for crashing.

As shown below, we have three activities – A1, A2 and A3, each with one resource (Res1). These are done in sequence or have Finish to Start (FS) relationship.  

The total duration as shown above is 6 days with all in FS relationships.

Next, we changed the dependencies among the activities. With it, the total duration was reduced.  

The total duration now shown above is 2 days. Note that the relationships have changed among the activities. 

Hence, we can say that with fast tracking we can also compress the schedule. 

Demonstration and Explanation

The below video [duration: 5m, 15s] explains Crashing and Fast Tracking using Primavera P6. In the Primavera P6 Pro Live Lessons, we will use a live, real-time project to demonstrate both crashing and fast tracking. 

To have a better audio-visual experience, plug-in your earphones and go full-screen HD.

Key Points to Note

Now that you understood, learned and also learned how to apply Crashing and Fast Tracking, following are the key points to note. Detailed explanation with a number of key points is part of the Primavera P6 Pro Live Lessons course.

• Use crashing for critical activities. Only with the reduction in remaining duration of critical activities, the project schedule will be reduced.
• Ensure that the duration type, activity types are proper when you apply crashing for the activities. 
• Also ensure that the Calendars is properly applied to the activities during crashing and/or fast tracking. For example, you are fast tracking two activities, for the concerned resources are not available for the second activity!

It’s important to note that activity type, duration type and calendars etc. will be considered while going for schedule compression.

Finally, be judicious in applying the schedule compression techniques. Running activities in parallel does not mean resources will actually work in parallel on the ground. Understand the limitations.

Nevertheless, both Crashing and Fast Tracking are powerful techniques to be used. As we can learn with this article, they can be effectively applied with Primavera P6. To know, learn and apply like a pro, subscribe to the course of Primavera P6 Live Lessons. 

References

[1] * NEW * Course – Primavera P6 Pro Live Lessons, with Full Money-Back Guarantee, by ManagementYogi.com 

[2] Article: Primavera P6 - Understanding Various Activity Types, by Satya Narayan Dash

[3] Course: Practical PMP with Oracle Primavera P6, by Satya Narayan Dash

[4] Course: Practical RMP with Oracle Primavera Risk Analysis, by Satya Narayan Dash

Primavera P6 Pro Live Lessons – Working with Negative Floats

 

Total Float (TF) and Free Float (FF) are two important concepts in Project Management. TF relates to the project’s overall finish date, while FF concerns the early start date of a successor activity. 

However, there is another type of float that is often overlooked: Negative Float (NF). In this post, we’ll explore how to work with NF in Primavera P6.

The content of this article is adapted from the Primavera P6 Pro Live Lessons course —a complete video course that includes detailed demonstrations and live examples on Negative Float.

Primavera P6 defines negative float as follows:

Negative float is when the total float is less than 0.0d.

You can learn more on negative float in this article. 

Now, considering Primavera P6:

• Negative float is, in fact, negative total float. It’s not negative free float.
• Though 0.0d (day) is informed, it can be 0.0 hour.

Find out the Negative Floats

In the below shown project, we have two activities with Start-to-Start dependency and without any lag. (Click on the image to enlarge) 

As shown:

• There are two activities “PRD Preparation” (5 days) and “PRD Approval” (2 days). 
• There is SS dependency without any lag between the two. 
• Notice the Early Start (ES) matches with the Late Start (LS). Early Finish (EF) matches with the Late Finish (LF). 
• As ES and LS as well as EF and LF match, the total float is zero.
• The formula for TF = LF – EF = 0.

Do note that Primavera P6 calculates the schedule options by taking LS and LF. 

Next, we introduced a lag of 2 days between the above activities, followed by leveling and scheduling. This resulted in the following. (Click on the image to enlarge)

As shown:

• There are two activities “PRD Preparation” (5 days) and “PRD Approval” (2 days). 
• There is SS dependency with a lag of 2 days. 
• Notice that the Early Start (ES) is greater than the Late Start (LS). Early Finish (EF) is greater than the Late Finish (LF). 
• The formula for TF = LF – EF = - 2 days.

This is reflected in the above figure.

Analyze the Negative Floats

One of the best ways to analyze the negative float is to use the forward and backward pass techniques. 

As noted earlier, we calculate the ES, EF, LS and LF and then find the TF value. Also, as noted earlier, Primavera P6 takes this default formula:

Total (TF)

= Late Finish (LF) – Early Finish (EF)

= LF – EF

In the first case (first figure), both LF and EF matches. Hence:

Total (TF)

= LF – EF

= 0

In the second case (third figure), EF is greater than LF by 2 days. Hence:

Total (TF)

= LF – EF

= - 2 days

Display the Negative Floats

To display negative float, you have to enable the bar settings, by clicking on the Bar Setting in the Tools toolbar. This is shown below.

 

After you apply the settings, the Negative Float Bar will be visible as shown in the below figure.  

As you can see now, now we have the negative float value coming for both the activities. 

Video Demonstration and Explanation

The below video [Duration: 3m, 55s] explains more on Negative Float (NF) with a live project. The live project is taken from the Primavera P6 Pro Live Lessons course.  

If you have a number activities and negative float occurs, it may not be restricted to one or two activities, but many! Hence, you need to be careful about the impact. This will not only impact the project’s schedule, but also cost/budget and understanding of the schedule.   

To have a better audio-visual experience, plug-in your earphones and go full-screen HD. 

Negative Float in Scheduling

Negative floats should always be avoided in a project schedule. If you notice multiple negative floats, it’s a clear sign that the schedule is not properly planned. Executing such a schedule is likely to result in significant problems during project delivery.

To resolve negative float issues, you should:

• Detect them early: Identify where negative floats occur in the schedule.
• Investigate the cause: Determine why they happened—common reasons include unrealistic deadlines, constraints, or misaligned dependencies.
• Enable visibility: It’s good practice to display negative float bars in Primavera P6 so they are easy to spot and monitor.

By addressing negative floats proactively, you can improve schedule reliability and reduce risks during execution.

References

[1] * NEW * Course – Primavera P6 Pro Live Lessons, with Full Money-Back Guarantee, by ManagementYogi.com 

[2] Course: Practical PMP with Oracle Primavera P6, by Satya Narayan Dash

[3] Course: Practical RMP with Oracle Primavera Risk Analysis, by Satya Narayan Dash

[4] Article: Critical Path Is Not Always the Longest Path! by Satya Narayan Dash

Primavera P6 Pro Live Lessons – Building and Applying A Personal Resource Calendar

With Primavera P6, you can create and apply or assign calendars to a resource, an activity or the entire project. While the project calendar is only one, the resource calendars can be many. For non-labor resources, the resource calendars can also be shared. 

In Primavera P6, resource calendars are applicable to all types of resources – Labor, Non-labor and Material. Yes, even the material ones can have calendars. In this post, we will learn how to create, build and apply a resource calendar for a labor resource. 

The content of this article is taken from the Primavera P6 Pro Live Lessons course – an exhaustive course covering various functionalities and capabilities Primavera P6 Professional with respect to project management. 

Now, let’s begin by creating a personal calendar for a labor-resource. 

Create the Resource Calendar

For our project, there are many resources – labor, non-labor and material. First and foremost, we need to have an upcoming plan for our resources to be used in the project. For a labor resource, it includes the resource’s availability, holidays, exception days etc. 

The best way to create the calendar is to go to the Resources window and select the resource. Next, from the Details tab, check the Profile section and click on the Create Personal Calendar button.  

In our case, we are going to create a Personal Calendar for Catherine R. This is shown below.  

As you click on the button, the calendar for Catherine R will be created. But here lies an important aspect. You’ve to select this personal calendar as the child of the Project’s calendar.  In our case:

• Project Calendar: WebMS Project Calendar, which is the Parent Calendar.
• Personal Resource Calendar: CatherineR – Catherine Rice, which is the calendar to be used specifically for Catherine. This is a Child Calendar. It’ll inherit the properties of the Parent Calendar, but can have its own characteristics.

As shown below, the Resource Calendar for CatherineR is the child calendar of the WebMS Project Calendar.  

After you inherit the properties of the parent calendar, which in our case is the WebMS Project Calendar, click on the OK button shown above. Then the resource specific calendar will be created. 

Visualize the Resource Calendar

Calendars, unlike other project elements such as activities, are enterprise-specific data. Hence, to visualize the calendar, you’ve to use the Enterprise menu.

To check the newly created Resource Calendar, go to Enterprise > Calendars as shown below. 

This will launch the Calendar Dialog Box, listing out all the following calendars:

• Global Calendars.
• Resources Calendars, including the shared ones.
• Project Specific Calendar 

As shown, now Catherine’s personal calendar is available under the resource specific calendars. 

Modify the Resource Calendar

To modify the Personal Resource Calendar, select the respective calendar and click on the Modify button in the above figure. This is to the middle-right and highlighted above.

This will launch the Personal Resource Calendar, shown in the second figure. Next, you have to go to your Project’s timeline and select the Detailed work hours/day for Catherine. It’s shown below. 

As you’d have noticed in the above figure, there are certain holidays (non-working days other than Saturdays and Sundays) for this calendar. These holidays are from the WebMS Project Calendar (parent) and hence available in the Resource Calendar – CatherineR. 

Modify the Working and/or Non-Working Hours

In this step, we are going to change the Workweek for Catherine. Let’s say Catherine will be available at a 50% capacity for the entire project duration, which is starting from October, 2027 and the project is expected to go-on for months. 

To change the work-week for Catherine, click on the Workweek button as highlighted in the above figure. This will launch the Calendar Weekly Hours Dialog Box for Catherine shown below. I’ve made the changes to match with Catherine’s 50% capacity.

As shown now Catherine will be working at 50% capacity for the entire project, or in other words, 4 hours in a working day.

Apply the Personal Resource Calendar

As explained in the above video, when you create the Personal Resource Calendar, it’s automatically assigned to the resource. However, you’ve to change the Activity Type to Resource Dependent for the calendar to take effect.

This can be done by going to the Activities window and changing the Activity Type. It’s changed to Resource Dependent, in place of Task Dependent. You can learn more on Activity Types in this article. 

As shown for the activity of Design and Develop Frontend – 1, the Activity Type is Resource Dependent. In certain cases, you may have to change the Duration Type. 

In Summary 

Calendars play a key role in managing projects. Because only with a calendar, we can know the followings:

• Working and non-working days for each calendar days
• National holidays
• Organizational holidays
• Project specific working and non-working days
• Resource specific working and non-working days.
• Available capacity for the individual resource, among many others.

Unlike MS Project, Primavera P6 does not create a resource calendar automatically. The software design and functionalities are different. Like MS Project, Primavera P6 is also a robust project management software with a dedicated backend database. 

If you want to use the Primavera P6 software properly and hence, manage your projects, learning the Calendar functionality in Primavera P6 is a must-have. 

I believe with this article, now you have a clear understanding on the usage of Personal Calendars in Primavera P6. 

References

[1] * NEW * Course – Primavera P6 Pro Live Lessons, with Full Money-Back Guarantee, by ManagementYogi.com 

[2] Article: Primavera P6 - Understanding Various Activity Types, by Satya Narayan Dash

[3] Course: Practical PMP with Oracle Primavera P6, by Satya Narayan Dash

[4] Course: Practical RMP with Oracle Primavera Risk Analysis, by Satya Narayan Dash

Upcoming Webinar: From Chaos to Control – Managing Risks with Primavera P6

In the realm of a project, certainty is a rare, though a welcome, guest. A project, which is a temporary endeavor, unfolds within a landscape filled with ambiguities, changing conditions with unforeseen twists and turns.

Such things are the norms, not the exceptions. Risk, then, is not an intruder, but a native of this terrain!

Risk Management in a Project

Project management rises in this uncertain landscape as it tries to bring certain order and structure amidst turbulence, sometimes even chaos. Project management is the steady hand that tries to sketch order onto the fog of uncertainty. While doing so, Project Managers (PMs) must court risk, not shun it. For to manage projects is to manage its risks! It’s not a separate, but an indispensable function.

It's the job of the PM to anticipate the tremors before the project ground is shaken and to reap rewards when the sun shines upon the project terrain. For to address risks without any anticipation of rewards, is not a wise act. In other words, whether the project is a gentle stream or a turbulent sea, the PM must know the language of risks and risk management.

Thus, when a project management software tool offers the intelligence to navigate and address risks, it becomes more than a software. It becomes a partner because of its embedded risk management capabilities, which can in turn empower PMs to lead with clarity, confidence and conviction. 

In my upcoming webinar, we will exactly do that with Primavera P6 software tool, which provides certain risk management capabilities to you – the Project or Portfolio Manager. 

Webinar Agenda

We will discuss the followings:

• Live demonstration of a project with risks.
• Working with both threats and opportunities.
• Determining the risk score.
• Applying risk responses (strategies).
• Face-to-face questions and answers (Q&As)

Event Details

• Registration: https://mpug.com/events/managing-risks-with-primavera-p6
• Tool Used: Primavera P6 Pro (Learn more here)
• Software Version: Primavera P6 R24.x, the latest one (see here)
• Date: 15th October, 2025, Wednesday
• Time: 9:30 PM IST (India); 12 PM ET (US)
• Duration: 1 hour

Update: The event has been rescheduled to 15th October, 2025.

Registration is closed. The event has concluded.

Primavera P6 Pro Course:

• Primavera P6 Pro Live Lessons

FAQs – Primavera P6 Pro Course:

• Frequently Asked Questions - Primavera P6 Pro Live Lessons

Primavera P6 Pro Live Lessons Advanced – Work Breakdown Structure (WBS) and Earned Value (EV)

Work Breakdown Structure (WBS) is a key element for project management. In program management too, you'll need a WBS - a program WBS. Earned Value (EV) and its associated measurement techniques and metrics are advanced areas to know in project (also in program and portfolio) management. Many don’t know how intricately WBS and EV work together and hence, this post. 

The content of this post is from the Primavera P6 Pro Live Lessons course. 

Work Breakdown Structure  

As noted in this article, the work breakdown structure (WBS) can be defined as:

A WBS is a hierarchical decomposition of the total scope of work to be carried out by the project team to accomplish the project objectives and create the required deliverables.

The above definition is deceptively simple, but packs a punch with information and key terms such as hierarchical structure, decomposition, deliverables and above all, meeting the project objectives. To know more, you can read the above linked article.

Coming to Primavera P6 software, the importance of WBS can’t be starker. Without WBS, you can NOT have:

• Activities added into the work packages in the right manner.
• Proper planning and tracking of your project.
• Formal control with respect to the project considering earned value.
• Cost management at the control account level, among others. 

In fact, you as the project manager should FIRST develop the WBS, and then assign activities to the WBS elements in order to perform the work!

To build the WBS, go to Project > WBS and add elements one by one. When completed along with the associated activities, it’ll come as shown below. This is taken from a live project of Primavera P6 Live Lessons course. (Click on the image to enlarge) 

As shown, we not only have the WBS Codes and WBS Names, but also the At Completion Cost and At Completion Duration for the WBS elements.

Earned Value (EV)

Earned Value is a well-known and widely used technique in all aspects of management – project or program. It’s also one of the key techniques in portfolio management. For example, in portfolio management, while managing benefits and value from the portfolio components (aggregated at the portfolio level), you can apply EV techniques. 

Earned Value is a technique integrates scope, schedule and cost and the measurement happens with respect to the performance measurement baseline (PMB) as noted in this article.  

Now, coming to Primavera P6, the first setting for earned value management will happen in the WBS window! If you’ve not done the proper settings, then your calculations with respect to earned value will be incorrect. 

WBS and Earned Value

To have proper earned value setting and hence calculation, you’ve to enable the WBS details by right clicking anywhere inside the WBS window and choosing “WBS Details”. (Click on the image to enlarge) 

This will enable WBS details in the bottom panel, if it’s not already visible. Next, to have the settings for Earned Value, go to WBS Details Pane > Earned Value tab. There you can make the setting related changes in two areas:

• Techniques for computing performance percent complete
• Techniques for computing Estimate to Complete (ETC). 

This is shown below. (Click on the image to enlarge) 

The default setting w.r.t to technique for computing performance percent complete will work with “Activity percent complete”.

The complications arise with the default setting w.r.t technique for computing ETC. 

Performance Factor (PF) and Estimate to Complete (ETC)

The relationship between PF and ETC must be well-understood before use the ETC technique. I noted the following in this elaborated article, published in 2015:

“ETC is the cost needed to complete the remaining work. It’s driven by a performance factor or performance index. Putting it into an equation, you get:

ETC = Work remaining / Performance factor

or

ETC = (Budget at Completion – Earned Value) / Performance factor

or

ETC = (BAC – EV) / Performance factor

The performance factor could be the cost performance factor or the cost performance index (CPI). It can also be a combination of CPI and schedule performance index (SPI) or a weighted combination of CPI and SPI.”

The default one used in the standard calculation for ETC is the Cost Performance Index. In this case the performance factor (PF) follows this equation.

Performance Factor = 1 / Cost Performance Index, or

PF = 1 / CPI

This setting should reflect while you manage your project with Primavera P6 software. Hence, in your project, it should come as shown below. (Click on the image to enlarge)  

Video Demonstration

The below video [duration: 03m: 27s] gives a live demonstration on the settings. Detailed explanation for earned value, its calculations and association with WBS are part of the Primavera P6 Pro Live Lessons. Plug-in your headphones and go full-HD to have a better experience. 

Conclusion

The calculations in earned value can vary based on the % complete as the above video explains. Primavera P6 gives a number of options to calculate. In order to master Primavera P6, you need to be familiar with them. 

And only with proper settings at the WBS level for earned value, you should go for earned value calculations. 

Check the Videos (Before Buying): 

[1] Complete Playlist: Primavera P6 Pro Live Lessons Sample Videos

[2] Choose to Play a Video: Primavera P6 Pro Live Lessons Sample Video List

References

[1] Primavera P6 Pro Live Lessons Online Course, by ManagementYogi.com

[2] Practical PMP with Oracle Primavera P6, by ManagementYogi.com

[3] Work Breakdown Structure (WBS) in Traditional and Agile Life Cycles with MS Project, by Satya Narayan Dash

[4] Calculating EAC and ETC for Forecasting, by Satya Narayan Dash

[5] Estimate to Complete (ETC) Calculation – Formulas for ETC (Composite), by Satya Narayan Dash