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In one of my previous projects, the senior-managers were not aware of the importance of risks and uncertainties, thus, we dealt with difficulties during the project, despite my cautions at the beginning. Understanding is an important factor in causing uncertainty, in our case; the customer was not familiar with the concept of the project as it was novel to them, which resulted in them not knowing what they wanted. This led to many repeated changes, which increased the risks and uncertainties we were dealing with.
My usual approach when starting any project is to assess and analyse the uncertainty and complexity using the appropriate Tools & Techniques to do so. I faced challenges including meeting the appropriate stakeholders and getting the correct information. Many clients I have worked with, have negated the importance of assessing the uncertainty and complexity, thus they sent whomever was available, rather than the key stakeholders, which then led to project scope creep.
An evaluation of the factors that contribute to risk and uncertainty and the difference between risk and uncertainty in project management.
When managing projects, Project Managers must deal with risks and uncertainties, regardless of the type of project; PMI notes, “All projects are uncertain. Uncertainty is inevitable…” (PMI-RM, 2009, p. 13). Lechler et al. identify risks as “known-unknowns” and uncertainties as “unknown-unknowns”, noting that “classic project management does not clearly differentiate between risks and uncertainty” (Lechler, Edington, & Gao, 2012, p. 59).
Examining uncertainty, (McLain, 2009, pp. 60-61) identifies a number of definitions, which focus on uncertainty as being something unknown and unmeasurable or challenging to measure, hence “unknown-unknowns”. (Navigating Complexity, 2014, p. 21) defines Uncertainty as: “the state of being unsure, of not knowing an issue or situation. In programs and projects, uncertainty may be described as a lack of awareness and understanding of issues, events, path to follow, or solutions to pursue.” Thus (McLain, 2009, p. 61) defines Uncertainty as having “inadequate information about when project activities will achieve project goals”, since it is more difficult to predict and solve problems when information is lacking. He quantifies different levels of uncertainty based on the amount of information available.
In contrast, Risk is defined as “An uncertain event or condition that, if it occurs, has a positive [opportunities] or negative [threats] effect on one or more project objectives.” (PMBOK6, 2017, p. 720), hence, “known-unknowns”. According to (PMI-RM, 2009, p. 9), Risk has two key dimensions: the “uncertainty dimension may be described using the term “probability” and the effect may be called “impact”. (Zwikael & Ahn, 2011, p. 26) defines project risk as a “measure of the probability and consequence of not achieving a defined project goal.” All sources of uncertainty, including individual risks, affect the project as a whole; this is Overall Project Risk. (PMBOK6, 2017, p. 396)
Uncertainty includes all identified risks, but risk doesn’t include uncertainty (Lechler, Edington, & Gao, 2012, p. 59)
Some major differences:
| Risks | Uncertainties |
| Predictable | Unpredictable |
| Forseen | Unforseen |
| Known-unknowns | Unknown-unknowns |
| Use Contingency reserve | Use Management reserve |
| Measurable | Unmeasurable |
When considering Risk and Uncertainty, the Porject Manager must take into account factors which cause them. (PMBOK6, 2017, p. 416) PMI observes that there are frameworks we can use for identifying sources of Risk. The literature identifies some key factors which cause Risk and Uncertainty. These include the following:
Uncertainties are inevitable, thus Project Managers must plan appropriately, ensuring the team can manage them. Project planning may take longer/be reworked to prevent project failure from uncertainties/complexities. Plans should be simple and understandable (Giezen, 2012, p. 786). PMs must avoid underestimating complexity, planning for potential budgetary and schedule impacts (Bosch-Rekveldta, et al., 2011, p. 782), and involving others in the planning process. There may be differing views on uncertainty/complexity and potential solutions due to different skills, knowledge and experience (Bosch-Rekveldta, et al., 2011, p. 735) which the PM must harness. Stakeholder engagement must be planned, ensuring commitment (Meredith, et al., 2015, p. 137).
Uncertainty must be considered from the outset, with planning beginning early. The project-contract and Project-Charter must be consulted, constraints and complexity/uncertainty sources assessed (Meredith, et al., 2015, p. 134), as the contract can significantly affect these (Bosch-Rekveldta, et al., 2011, p. 731).
Project-Stakeholder attitudes/support are key to success but also sources of conflict/uncertainty (Oehmen, et al., 2015, p. 6). Communication is critical; stakeholder engagement, (PMI, 2014, p. 60),responses for resistant stakeholders, and alignment of stakeholder/project goals must be planned (Meredith, et al., 2015, p. 136).
The team’s skills/experience contribute to or eliminate uncertainty/complexity thus the PM must consider/consult the team about project delivery (PMI, 2013, p. 10). The team’s abilities/knowledge/experience (PMI, 2014, p. 60) should be evaluated.Consulting and applying lessons learned from previous projects is also essential (PMI, 2014, p. 63).
The development approach must also be chosen carefully to suit the project and the uncertainty/complexity encountered. The life cycle must be appropriate for dealing with uncertainty/complexity and must be tailored to suit (PMI, 2017),with sufficient flexibility and allowances to deal with the risks (Meredith, et al., 2015, pp. 204-205).
The PM must employ critical thinking throughout the project, not only the planning process (PMI, 2014, p. 60). By ensuring that planning remains flexible, uncertainty/complexity can be planned for appropriately. The plan must also ensure its own integrity, controlling the project in the face of uncertainty/complexity, preventing scope creep (Meredith, et al., 2015, pp. 204-205).
We can categorise sources of complexity/uncertainty into three: Human Behaviour, System Behaviour, and Ambiguity (PMI, 2014).
I have experienced customers expecting “gold plating” beyond the contract and scope, in addition to requesting merging of reports from different systems – not technically possible within scope. Analysis suggests this is due to stakeholders having unreasonable/unachievable expectations, and significantly/willfully misunderstanding goals and decision processes (PMI, 2014, p. 38). This, with scope creep, can occur due to uncertainty/complexity (Bosch-Rekveldta, et al., 2011, p. 731) and requirements are not defined due to conflicting stakeholder information (PMI, 2014, p. 38). Ultimately the source for this is Human Behaviour.
In one project, bureaucracy was a significant issue; it was very difficult to obtain access for the team but the complex procedures must be followed. Additionally, new procedures were frequently created. Analysing the complexity/uncertainty here, they were due to the requirement to follow procedures due to consequences for not doing so (Giezen, 2012, p. 787), compounded by changing key stakeholders (Giezen, 2012, p. 786). The source for this was System Behaviour.
On a GIS project, I experienced problems with the team being insufficiently qualified, leading to incorrect technical decisions due to lack of training. Analysing this, the lack of qualified personnel were due to the advanced technology involved, the high level of external change, and the lack of support from the company. Ambiguity was the source of this uncertainty/complexity (PMI, 2014, pp. 40, 45).
Since Risk and Uncertainties are inevitable, they are a major factor in project selection (Kloppenborg, 2012, p. 1), so Project Managers must be familiar with them, and the factors causing them to successfully manage the project. After all, “Project Risk Management is not an optional activity” (PMI-RM, 2009, p. 4) It is an ongoing process during the lifecycle, essential to successful delivery of project objectives (cost, schedule, quality). Quality must be a key element over cost for projects with higher risk and uncertainty (PMBOK6, 2017, p. 474).
Kloppenborg, T. (2012, January). Project Selection and Initiation Questions Leading to Good Risk Management. PM World Today, XIV(1).
Krane, H. O. (2012). How Project Manager–Project Owner Interaction Can Work Within and Influence Project Risk Management. Project Management Journal, 43(2), 54–67. doi:10.1002/pmj.20284
Lechler, T. G., Edington, B. H., & Gao, T. (2012). Challenging Classic Project Management: Turning Project Uncertainties Into Business Opportunities. Project Management Journal, 59-69.
McLain, D. (2009). Quantifying project characteristics related to uncertainty. Project Management Journal, 40(4), 60–73. doi:10.1002/pmj
Navigating Complexity, P. (2014). NAVIGATING COMPLEXITY: A PRACTICE GUIDE. Newtown Square, Pennsylvania, USA: Project Management Institute, Inc.
Oehmen, J. T. (2015). Complexity Management for Projects, Programmes, and Portfolios: An Engineering Systems Perspective. PMI White Paper. Newtown Square: Project Management Institute, Inc.
PMBOK6. (2017). A Guide to the Project Management Body of Knowledge (6th ed.). Pennsylvania: Project Management Institute, Inc.
PMI-RM. (2009). PRACTICE STANDARD FOR PROJECT RISK MANAGEMENT. Pennsylvania, USA: Project Management Institute, Inc. Retrieved from www.pmi.org
Bosch-Rekveldta, M. et al., 2011. Grasping project complexity in large engineering projects: The TOE (Technical, Organizational and Environmental) framework. International Journal of Project Management, 29(1), p. 728–739.
Giezen, M., 2012. Keeping it simple? A case study into the advantages and disadvantages of reducing complexity in mega project planning. International Journal of Project Management, 30(1), p. 781–790.
Meredith, J. R., Samuel J. Mantel, J. & Shafer, S. M., 2015. Project Management: A Managerial Approach. 9th ed. New York: John Wiley & Sons, Inc.
Oehmen, J., Thuesen, C., Parraguez Ruiz, P. & Geraldi, J., 2015. Complexity Management for Projects, Programmes, and Portfolios: An Engineering Systems Perspective. PMI White Paper: Project Management Institute, inc.
PMI, 2013. PMI’s Pulse of the Profession In-Depth Report: Navigating Complexity, PMI.org/Pulse: Project Management Institute, Inc.
PMI, 2014. Navigating Complexity: A PRACTICE GUIDE. Newtown Square(Pennsylvania): Project Management Institute, Inc.
PMI, 2017. A Guide to the Project Management Body of Knowledge. 6th ed. Pennsylvania: Project Management Institute, Inc.
The original article is published on EYA on 13/10/2018.
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