Cost, Schedule, and Technical Performance Measures are based on random variables. These are all connected in networks of dependent relationships.
Any thought of linear relationships is naive at best and foolish at worse.
Managing in the presence of the uncertainty created by these relationships is mandatory. Trying to avoid this uncertainty, control the uncertainty, and ignore the uncertainty will result in disappointment. But this uncertainty is not chaos. It can be modeled and those models can be used to forecast future performance, the impacts of corrective actions on this forecast. This is not a Chaos situation. If it is Chaos than it's not a project, it's just Chaos.
There are four types of Uncertainty in Projects
- Variation - comes from many small influences and yields a range of values on a particular activity
- Foreseen Uncertainty - are identifiable and understood influences that the team cannot be sure will occur.
- Unforeseen Uncertainty - can’t be identified during project planning
- Chaos - projects subject to unforeseen uncertainty start out with reasonably stable assumptions and goals, projects subject to chaos do not. Even the basic structure of the project plan is uncertain, as is the case when technology is in upheaval or when research, not development, is the main goal.
These ideas are from the work of Arnoud De Meyer, Christoph H. Loch and Michael T. Pich in the MIT Sloan Management Review, WINTER 2002. Their work can also be found at www.insead.edu.