Project Risk Management: Essential Methods for Project Teams and Decision Makers

CHAPTER ONE

Nature of Project Uncertainties

Questions Addressed in Chapter 1

• What could be expected as a project outcome?
• What factors are behind deviations from the expected project outcome?
• Do we really know what we try to manage?
• What degrees of freedom do uncertainties have?
• What are major uncertainty objects and their changers?
• When is a decision really a decision and when it is an opportunity?
• Is it really risk management? Or is it actually uncertainty management?

MULTIPLE FACTORS INFLUENCE OVERALL project outcome. Their nature and influence depend on how a project is developed and executed, what are project objectives and expectations of stakeholders, and so on. It is not possible to manage factors influencing project outcome without properly understanding their definition. Only when all relevant uncertainty elements are pinned down and all factors leading to uncertainty changes are clearly understood can a minimal set of adequate methods be selected to manage all of them effectively.

Those multiple uncertainty elements are called uncertainty objects in this book. Systematic definitions are proposed for all of them from first principles based on the intrinsic nature of project uncertainties along with main factors that change the objects (uncertainty changers). The purpose of these definitions is not to come up with linguistically flawless descriptions of the objects, ...