The Use of Monte Carlo Simulation in Quantitative Risk Assessment of IT Projects

Estimation of the likely time and cost to complete the project and in line with it, taking into account the likelihood of occurrence and severity of the risks' effect, is one of the main concerns that have busied the organizational project managers. On the other hand, the diversity and sensitivity of information technology risks have caused to proper risk management, bolder than other issues, influences these projects. Therefore, in order to describe the degree of potential consequences and probability of occurrence of incidents accurately, IT project managers benefit from quantitative assessment. One of the most effective tools for quantitative assessment and likely forecasting of risks is Monte Carlo simulation, which by generating random numbers, calculates the individual components of a project and determine the impact of each of them on project. In this study, we tried to offer the functional model of the impact of risks on performance indicators of information technology project and propose proper time and cost for completing the project under the study by doing a case study and use of software functionality of Primavera Risk Analysis in Monte Carlo simulation.