Decision Making in the Presence of Uncertainty

Making decisions is part of spending other people's money. It's part of Risk Management. It's part of our everyday lives. Many of the decisions we make in our live's are qualitative. When we're spending other people's money, we need to make quantitative decisions, based on some tangible evidence. This evidence can be from past decisions and their outcomes. Or it can be from a model of future outcomes.

There are six attributes of decision making in our software-intensive system of systems (SISoS) domain:

1. The complexity of the system used to develop the products or services being paid for by our customer
2. The focus on relationships and quality of the deliverables from this development work
3. The movement from the technology to the user's perception of the value of that technology
4. The recognition that it's the system we're after rather than the collection of parts
5. The availability of low cost, rapid development systems
6. The secularization of knowledge of how to solve problems, that is the high priests of our software solutions is being replaced by generally available knowledge or even packaged solutions. The movement from coding by punching holes in small cardboard sheets to clicking on entire solution packages.

Complexity is not substantially increased by additions to the number of things. High levels of complexity arise from the increased number of relationships between the things - Decision and Control: The Meaning of Operational Research and Management Cybernetics, Stafford Beer.

Beer's 1966 book lays out the principles of decision making in the presence of uncertainty found in software development today. These principles are immutable and many times either ignored or have been rediscovered as something new.

What Beer tells us ... things increase normally at arithmetic rates, and occasionally at geometric rates, whereas relations can and do increase at geometric rates of the rates of increase of things. 

What is a Decision?

A simple answer is to make up your mind. That is, the taking of a decision is best described as fixing a belief  [1] Going beyond this, a decision is the deliberate act of selection, from a set of competing alternatives ... in the belief that the action will accomplish the desired goal [2]

 

References

[1] Decision and Control: The Meaning of Operational Research and Management Cybernetics, Stafford Beer, page 1.

[2] Decision Making: Creativity, Judgement, and Systems, Edited by Henry S. Brinkers, Ohio State University Press, 1972.