Example Building cost uncertainty on a time uncertainty framework

When North Sea offshore project teams were satisfied that time uncertainty had been properly assessed, aspects of cost uncertainty not addressed as part of the process of responding to time uncertainty were assessed. For example, the uncertain duration of pipe-laying activity was multiplied by the uncertain cost of lay barge per unit time needed to compute lay barge cost.

In this case it is relatively simple to build cost uncertainty on a time uncertainty framework. When a clear structure linking criteria exists, it is worth exploiting. When it does not, more complex approaches may be required, and this complexity requires great care. For example, many weapon system and information system RMPs identify sources in terms of time, cost, and performance impacts simultaneously, using matrix formats. This may seem sensible for a first-pass approach to the identify phase. However, it poses two somewhat different potential problems. First, it does not facilitate a clear, sequential focus on performance criteria, which helps to avoid omissions. Second, it leaves structural and trade-off issues to be addressed later as they must be for quantification, and this can mitigate against appropriate quantification. By impeding quantification, it impairs the iterative process that is central to a complete RMP.

Much more detailed analysis of objectives, including their decomposition in a structure directly related to project activities or design components, may be useful in some cases. For example, in a high-technology product development project, if a set of components is assessed as very risky, it may be possible to design out the uncertainty by changing the basic nature of the design, perhaps as part of a formal value management process (Green, 1994). This will require a clear understanding of the functional role of the components in the overall design. It involves an interaction between the project why and what. The groundwork for identification of such issues should have been provided back in the define phase.

It is important to address these difficulties explicitly as part of the focus phase or the closely linked structure phase. Guidance on how to manage such difficulties is beyond the scope of this book, but a starting point for those interested is provided by Chapman et al. (1985a), Klein (1993), and Chapman and Ward (2002).

Even if only one project party is of concern, it is very important to define objectives in writing and their relative priorities. Often different parts of the same organization have different objectives. At the very least, agreed priorities in terms of time, cost, and performance are essential. If differences are very important, treating the different parts of the organization as separate partners may be appropriate. This takes us into different criteria related to different parties and uncertainty associated with other Ws.

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