We don't make predictions because we want them to come true, but because we want them not to come true.
Once we come the accept that all processes we encounter in the project management work are actually random, life then becomes easier. This is counter intuive, but try to control randomness is much harder than mangeing in the presence of randomness.
Let's start with an overview of Progammatic Risk Management. Programmatic risk is the risk that results from uncertainty in the performance of the project. Not thet technical risk. That's another topic. This risk is the probabilty that the project will be over budget and behind schedule because of the development activities themselves.
So what does this mean for project
All projects has probabilistic and statistical behaviours.
- Uncertainty comes in two forms
- Reducible uncertainty - we can spend money to reduce the uncertainty. This uncertainty is due the lack of knowledge. This is called epistemic uncertainty.
- Irreducible uncertainty - this is just the way it is. This uncertainty is due to a random process.
- Distinguishing between these two uncertainy types is critical to decision making
- We can spend money to buy down epistemic uncertainty. This is called risk retirement. Redundancy is an approach. Running an experiement. Building a prototype. Agile software development is a form of risk retirement, since agile limits the exposure to risk by deploying in small chunks, that reveal if the customer is actually satisfied with the result
- We must of margin for aleatory uncertainty. No amount of money is going to buy more knowledge. Communting to work requires a marging on time. The commute nevers tales excalty the time it says on the GPS Navigation screen of your car.
