Decisions are about making Trade Offs for the project that are themselves about:
- Evaluating alternatives.
- Integrating and balancing all the considerations (cost, performance, Producibility, testability, supportability, etc.).
- Developing and refining the requirements, concepts, capabilities of the product or services produced by the project or product development process.
- Making trade studies and the resulting trade offs that enables the selection of the best or most balanced solution to fulfill the business need or accomplishment of the mission.
The purpose of this process is to:
- Identify the trade-offs – the decisions to be made – among requirements, design, schedule, and cost.
- Establish the level of assessment commensurate with cost, schedule, performance, and risk impact based on the value at risk for the decision.
- Low value at risk, low impact, simple decision making – possibly even gut feel.
- High value at risk, high impact, the decision-making process must take into account these impacts.
Making decisions about capabilities and resulting requirements is the start of discovering what DONE looks like, by:
- Establishing alternatives for the needed performance and functional requirements.
- Resolving conflicts between these requirements in terms of the product’s delivered capabilities.
Decisions about the functional behaviors and their options is next. These decisions:
- Determine preferred set of requirements for the needed capabilities. This of course is an evolutionary process as requirements emerge, working products are put to use, and feedback is obtained.
- Determine the customer assesses requirements for lower-level functions as each of the higher-level capabilities are assessed.
- Evaluate alternatives to each requirement, each capability, and the assessed value of each capability – in units of measure meaningful to the decision makers.
Then comes the assessment the cost effectiveness of each decision:
- Develop the Measures of Effectiveness and Measures of Performance for each decision.
- Identify the critical Measures of Effectiveness of each decision in fulfilling the project’s business goal or mission. These Technical Performance Measures are used to assess the impact of each decision on the produced value of the project.
Each of these steps is reflected in the next diagram.
Value of This Approach
When we hear that estimates are not needed to make decisions, we need to ask how the following questions can be answered:
- How can we have systematized thought process, where the decisions are based on measureable impacts?
- How can we clarify our options, problem structure, and available trade-offs using units of measure meaningful to the decision makers?
- How can we improve communication of ideas and professional judgment within our organization through a shared exchange of the impacts of our decisions?
- How can we improve communication of rationale for each decision to others outside the organization?
- How can we be assured of our confidence that all available information has been accounted for in a decision?
The decision making process is guided by the identification of alternatives
Decision-making is about deciding between alternatives. These alternatives need to be identified, assessed, and analyzed for their impact on the probability of success of the project.
These impacts include, but are not limited to:
- Performance
- Schedule
- Cost
- Risk
- Affordability
- Producibility
- And all the other …ilities associated with the outcomes of the project
The effectiveness of our decision making follows the diagram below:
In the End - Have all the Alternatives Been Considered?
Until there is a replacement for the principles of Microeconomics, for each decision made on the project, we will need to know the impact on cost, schedule, technical parameters, and other attributes of that decision. To not know those impacts literally violates the principles of microeconomics and the governance framework of all business processes, where the value at risk is non-trivial.
When you hear planning ahead, by assessing our alternatives is overrated, quit estimating cold turkey think again. And ask evidence of how to make decisions in the presence of uncertainty with making estimates, making trade-offs, evaluating alternatives - probabilistic alternatives - and all the those other decision making processes found in your managerial finance book you read in engineering, computer science, or business school
† Derived from Module J: Trade Study Process, Systems Engineering, Boeing.
