When to Start Risk Analysis in Front End Loading (FEL/FEP)
- Roger Farish
- Sep 1
- 3 min read
The front end of a project is where the real leverage lies. Decisions made early shape cost, schedule, and long-term performance. Yet many teams still wait until late design or even execution to bring in risk analysis and decision analytics. By that time, their influence is limited and the cost of change is high.
The truth is that front end loading risk analysis should be integrated into every phase of Front End Loading (FEL), also known more broadly as front end planning (FEP). The depth and detail increase as the project advances, but the starting point is always the very beginning.
FEL 1: Feasibility and Concept Selection
At this stage you are exploring options to meet a business objective. The emphasis is on testing concepts and deciding which are worth advancing.
Decision analytics: Use straightforward evaluation tools to compare business options. Conduct preliminary cost-benefit reviews to validate business cases, examine market potential, and confirm alignment with corporate strategy. Owners may also seek an early independent estimate review to validate the assumptions behind Class 5 or Class 4 estimates. Even at this stage, a second opinion helps confirm whether the economic viability of a concept is sound before advancing.
Risk analysis: Conduct high-level identification of threats and opportunities. Interview stakeholders to capture political, environmental, safety, technical, and commercial risks. Qualitative assessments at this stage are essential for highlighting major risk drivers, particularly when new or unproven technologies are involved.
FEL 2: Scope Development and Feasibility Study
With a single concept selected, the focus shifts to defining scope and refining assumptions.
Decision analytics: Support scope choices with trade-off studies and value engineering. Evaluate design alternatives and perform preliminary economic comparisons to shape scope and cost. Progressive estimate reviews can provide added confidence that methodology and assumptions remain sound as the scope matures.
Risk analysis: Move beyond identification into structured workshops across functions. Address scope maturity reviews with tools such as the Project Definition Rating Index (PDRI) to uncover gaps. Establish a preliminary risk register and management plan, and begin framing mitigation strategies that will carry into detailed design.
FEL 3: Front End Engineering Design (FEED)
This phase produces the definitive cost and schedule baseline that underpins the investment decision.
Decision analytics: Finalize project justification with risk-adjusted economics. Test the execution strategy and prepare the decision package for funding approval. At this point, owners often apply refined estimate reviews and should-cost estimating to strengthen sanction confidence and improve negotiations with contractors.
Risk analysis: Apply quantitative methods such as Monte Carlo simulation to evaluate cost and schedule confidence levels. Refine contingency strategies and assign clear ownership of mitigation actions to ensure risks are actively managed.
Why Start Risk Analysis Early in Front End Loading?
The benefits of integrating front end loading risk analysis from the beginning are clear:
Maximum ability to influence project outcomes when changes are still inexpensive
Reduced risk of costly surprises during execution
Stronger, data-driven decision making at each gate
Improved chances of achieving cost, schedule, and performance objectives
Many of the common pitfalls we see in projects, such as those outlined in our post on Top 5 Estimating Mistakes, can be traced back to weak early planning.
About ROMAN Consulting Group
At ROMAN Consulting Group, we help owners, developers, EPCs, and OEMs reduce project cost uncertainty so they can make stronger investment decisions. Our services include independent estimating, Basis of Estimate (BoE) reviews, scope maturity assessments (PDRI), and quantitative risk analysis. Each service is designed to provide objective early reviews that strengthen the foundation of capital projects.
If you want to improve front-end decision quality and set your projects up for success, we are here to help.
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