# Introduction for Event Chain Methodology Tutorial | Guide For Beginners

Last updated on 24th Aug 2022, Blog, Tutorials

Manorajan (Senior Manager )

Manorajan is a six-sigma rule project manager with 6+ years of experience who inspires creative thinking and excitement among team members. His paper concerns the SDLC model, the Kanban methodology, and the agile methodology.

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### Introduction

In the initial stages of a project, difficult processes and the more risks involved make it impossible to accurately model.

A model of a project is essential for efficient project management.

Event Chain Methodology, an improbable modeling and schedule network analysis technique, is a solution to this problem.

This technique is used to maintain events and event chains that influence project schedules.

It is neither a simulation nor a risky analysis method but rather works by using existing methodologies.

Monte Carlo Analysis and Bayesian Belief Network.

Event chain methodology is used for modeling probabilities for various businesses and more technological processes of which one is project management

### Event Chain Methodology Objectives:

1. 1. Mitigate effect motivational and cognitive biases in evaluating and scheduling.
2. 2. In more cases, project managers intentionally or unintentionally make project schedules that are impossible to implement.
3. 3. Simplify the process of explaining risks and uncertainties in project schedules, particularly increase the ability to provide reality checks and visualize multiple events.
4. 4. Perform more accurate quantitative analysis taking into account factors such as the relationship between different events and the actual moment of the events.

### Principles of Event Chain Methodology:

Moment of risk and state of activity

### Event chain diagram for one activity:

Activities are not a continuous uniform procedure.

Tasks are affected by external events, which transform an activity from one state to another state.

One of the most important properties of an event is the moment when an event occurs during the course of the activity.

This moment, when an event occurs, in most cases is probabilistic and can be explained using statistical distribution.

The original state is called a ground state, other states are called the excited states.

For example, if the team finishes their job on activity, they can move to the other activities.

activity’s state is important because certain events can or cannot occur when activity is in the certain state.

It means that the state of an activity is subscribed to an event.

Events can be local, affecting specific tasks or resources, or global affecting all tasks or resources.

### Event chains

Events can be related to other events, which will generate event chains.

These event sequences have a big impact on the project’s progress.

Modifiers to requirements, for instance, can delay an action.

The project manager uses a resource from another activity to speed up the activity, which causes the deadline to be missed.

This may ultimately result in the failure of a project.

There could be several connections between the events.

One incident has the potential to start several more.

Events can be related to one another without one of them starting the other off.

In this situation, if one danger materializes, a second risk will follow and vice versa.

An activity or combination of activities can be executed by an event that was assigned to one activity.

In more cases it is the execution of risk response plans.

For example, an event “structural defect is discovered” can cause one or many activities “Repair”.

Events can cause the other events to occur either quickly or with a delay.

The delay is a property of an event subscription.

The delay can be deterministic, but in more cases, it is probabilistic.

Also risks can be transferred from one activity to another.

To explain event chains, one needs to identify a “sender”, the event that initiates the chain of events.

The sender event can cause one or more events that affect multiple activities.

These are called the “receiver” events.

In turn, the receiver events can also act as the sender events.

Local and global threats and opportunities with various probabilities and impacts

Event chain diagram is a visualization that displays the relationships between events and tasks and how the events affect each other.

The simplest way to represent these chains is to depict arrows associated with the certain tasks or time intervals on the Gantt chart.

Here are a some important rules:

• Event chains diagrams present events as arrows on Gantt charts.
• Arrows pointing down are the threats.
• Arrows pointing up are the opportunities.
• Issues are represented by an arrow inside of a circle.
• Color of the problem arrow is red (dark).
• Closed or transferred risks are shown by using the dashed lines.
• Color of the arrow is white.
• Closed issue is shown in the circle with the dashed border line.
• The Gantt chart’s corresponding segment of the bar is elevated to signify excited states.
• Colors represent the evaluated impact of the risk.
• High impacts are red or darker shade.
• Low impacts are green or lighter shade.
• The size of the arrow represents a probability.
• Event chains are shown as lines connecting the arrows depicting events.
• Event chains may trigger another activity.
• In this case the event chain line will be connected with the start of activity with an optional arrow.
• Event chains may trigger the group of activities.
• In this case this group of activities will be surrounded by the box or frame and the event chain line will be connected to the corner of the box or first activity within the frame.
• By using event chain diagrams to visualize events and event chains, modeling and analysis of risks and uncertainties can be significantly simplified.
• Example of event chain diagram with critical event chain and activity triggered by event
• Another tool that can be used to simplify the explanation of events is a state table.
• Columns in a state table represent events; rows represent the states of an activity.
• Information for each event in every state includes four properties of event subscription: probability, moment of event, excited state, and impact of the event.
• ### Monte Carlo simulation

Once events and event chains are explained quantitative analysis by using Monte Carlo simulation can be performed to quantify the cumulative effect of the events.

Probabilities and impacts of issues assigned to activities are used as input data for Monte Carlo simulation of the project schedule.

In more projects it is needed to supplement the event based variance with uncertainties as distributions related to duration, start time, cost, and other parameters.

In Event chain methodology, risk cannot only affect schedule and cost, but also the other parameters like safety, security, performance, technology, quality, and other objectives.

In other words, one event can belong to various categories.

The result of the analysis would show risk exposure for various categories as well as integrated project risk score for all categories.

This integrated project risk score is estimated based on relative weights for every risk category.

### Critical event chains

Monte Carlo simulation offers the capability, through sensitivity analysis, to identify single or chains of events.

These chains of events can be identified by analyzing the correlations between the main project parameters, like project duration or cost, and the event chains.

These are called “critical events” or “critical chains of events”.

By identifying the critical events or critical chains of events, can identify strategies to minimize the negative effects: Avoid, Transfer, Mitigate, or Accept.

Event and event chain ranking is performed for all risk categories as part of a one process

Integrated risk probability, impact and score can be estimated using weights for every risk category.

### Project control with event and event chains

Screening the activity’s progress ensures that updated data is used to perform the analysis.

During the course of the project, the probability and time of the events can be recalculated based on the actual data.

The major reason for performance tracking is forecasting an activity’s duration and cost if an activity is partially finished and certain events are assigned to the activity.

Event chain methodology decreases the risk probability and impact automatically based on the percent of work completed.

Advanced analysis can be performed using the Bayesian approach.

The probability that a project will finish by a specific deadline can be tracked.

This chance is to be constantly updated as a result of a Monte Carlo analysis.

Critical events and event chains can be at the various phases of the project

### Repeated activities

Events can cause the start of an activity that has already been finished.

This is a very general scenario for real life projects;

Sometimes a previous activity must be repeated based on the results of the succeeding activity.

Event chain methodology simplifies the modeling of these scenarios.

The original project schedule does not require to be updated, all that is required is to explain the event and assign it to an activity that points to the previous activity.

A limit to the number of times an activity can be repeated must be explained.

Event chains and risk response

### Mitigation plan:

If an event or event chain occurs during the course of a project, it needs some risk response effort.

Events that take place when an activity is in a heightened state of excitement cause risk response strategies to go into action.

Risk response events attempt to transform the activity from the excited state to ground state.

Response plans are activity or group of the activities

That augments the project schedule if a certain event occurs.

The solution is to assign a response plan to an event or event chain.

The same response plan can be used for one or more events.

Resource allocation based on events

One potential event is the reassignment of a resource from one activity to another, which can occur under the certain rules.

For example, if an activity needs many resources to complete it within a fixed period, this will trigger an event to reallocate the resource from another activity.

Reallocation of resources can also occur when activity duration reaches a certain deadline or the cost more than a certain value.

Events can be used to model various situations with resources, e.g. temporary leave, illness, vacations, etc.

### Conclusion

Using existing techniques like Monte Carlo Analysis, Event Chain Methodology manages events and subsequent event chains in the project management.

Working by six principles, this methodology reduces the risks and reservations associated with project schedules.

Therefore, the project managers and other senior managers, who are responsible for project accounts should have a clear understanding of the Event Chain Methodology.

Event Chain Methodology is closely related to many other techniques used in project management, like Gantt Charts and Monte

Carlo Analysis, the project management should be thorough with all encouraging techniques and tools for Event Chain Methodology.

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