September 24, 2021 by Accounting For Risk Accurately predicting costs for capital projects, shutdowns, turnarounds and outages is one of the most challenging tasks in heavy industry. A myriad of factors can impact the accuracy of those estimates, but this is generally only revealed in hindsight. In the end, leadership wants to know that the full spectrum of information is considered when creating these estimates—including risks. CERA (Cost Estimate Risk Analysis) is our proven industry-leading cost risk analysis service specifically designed to provide better estimates and outcomes. It includes an in-depth review of the risks and uncertainties that influence cost estimates, followed by an assessment of the contingencies, estimate accuracy, and management reserve required to execute a capital project or turnaround. Our holistic inventory utilizes AP-Networks’ unique CERA methodology, which produces a wealth of informative reports to aid in decision-making. Our complete CERA process results in a structured format that produces realistic cost estimates that account for uncertainties and risks a project or STO might face. At the end of a CERA engagement, your team has a complete understanding of your current project and a more profound knowledge of how to build more robust cost estimates in the future. Summary The CERA process includes the following steps: Identify Project or STO Risks: This is done through group evaluation and brainstorming, where the team highlights threats and opportunities within the project scope.Assess Cost Impacts: Using our risk-based data toolset, we model potential impacts of uncertainties and risks based on potential variability, impact and the probability of occurrence. Build A CERA Model: Using the collected data, we build a CERA Model S-curve that reflects uncertainties, risks, required contingencies and confidence intervals.Feedback Loop: Our associates and data analytics group provides insights that help project teams understand the drivers of contingency and accuracy range, resulting in significantly improved estimate quality and confidence. Benefits of AP-Networks’ CERA include: Stakeholders aligned on need for credible cost estimates to achieve scope Increased understanding of the quality of the technical definition, execution strategy and estimate assumptionsConfidence for leaders that a project or STO has achieved required design definition and estimate accuracy for financial sanctionFully justifiable contingency, estimate accuracy and management reserveCredibility in target-setting to drive superior performance AP-Networks’ Schedule Estimate Risk Analysis (SERA) is a sister service to CERA and provides a powerful, proven solution for improving schedule predictability.