There's a popular notion in Agile that says Focus on Value.
The principles of microeconomics of decision making in the presence of uncertainty mandates you make estimates of how to achieve that Value in terms of cost and schedule, those three (and all) variables are random variables, usually driven by a stochastic process. This process can be stationary (unchanging distribution) or non-stationary (a changing distribution function). In both cases, these create a risk to the success of the project. These risks - aleatory and epistemic - must be handled in some way if they are to not have an undesirable impact on the outcome of the project.
Focusing on Value is good business practice, common sense, and completely logical. Why would you build things that don't have the needed value at the needed time?
But Value Can NOT be determined without knowing the cost and time to produce that Value.
So how do you determine the cost and time when that Value should be available for use in the presence of the naturally occurring (aleatory) and event-based (epistemic) uncertainties that create the risk to that Value?
There's a webinar coming this week with the title Value First: How our Customers Deliver every Project On-Time, Under-Budget, and High-Quality. I'll attend with a follow-up.
But in order to deliver every project on-time, under-budget, and high-quality, there MUST be margin (for the irreducible uncertainties) and contingency (for the reducible uncertainties) since all three of those metrics operate in the presence of uncertainty.
