Risk Management is how Adults Manage Projects - Tim Lister
There are two kinds of uncertainty on all projects, no matter the domain, including software development projects
Both these drivers of risk will impact the probability of success of projects
Decision-Making in the Presence of Uncertainty
Decision-making is the process of choosing among alternatives. The nature and context of decisions vary and have a variety of criteria to be considered in making a choice. The alternatives can involve a large number of uncertainties about the factors that influence the ultimate outcomes. For high-consequence decisions with potential outcomes that can have a large impact on valued things, the decision-making process should involve consideration of uncertainties about the outcomes. [1]
For customers paying for the development of software, these things include - cost, schedule (time cost of money), market timing, and performance of the product to name a few.
A decision is a resolution on an issue or a problem of interest being considered. The process of making a decision involves three elements: values, alternatives, and facts (Buede, 2009). [1]
- Values are criteria used to assess the utility of the outcome. Depending on the context, values can be objective or subjective, and quantitative or qualitative. The values capture the needs, objectives, and preferences of the stakeholders, which are the people and organizations that have an interest and can influence or be influenced by a decision.
- Alternatives may be given or can be the result of a creative process to generate potential solutions to the problem of interest. The facts are everything known about the alternatives and the context or environment in which the alternatives will be deployed or applied.
- Facts are the relevant data, information, and knowledge used in the process of assessing the alternatives against the values in order to make the decision. The decision makers use available facts, history, experience, and judgment to select an alternative.
In our software development world, Values, Alternatives, and Facts are always part of the decision-making process mo matter if we're spending our customer's money or our own.
If we're going to make risk-informed decisions in the presence of uncertainty, then we're going to have to estimate to a probability of occurrence, the statistical range of values of the drivers of the risk, the probability of consequences or the statistical range of outcomes.
If you've chosen to not estimate, then Tim Lister suggests we're not acting like adults when spending other people's money.
[1] "Considering Risk and Resilience in Decision Making," Wilfredo Torres-Pomales, Langley Research Center, Hampton, Virginia, NASA/TM-2015-218777
