Don’t Hide Uncertainty: Measure It

We all need to deal with estimates /  projections for the future.  When doing so, it is essential to include analysis of  uncertainty and sensitivity of the variables including:

• Most important assumptions in the result
• Sensitivity of those assumptions (what happens if the assumptions change; which assumptions are most important in controlling overall results?)
• Probability of the estimate
• Risk Analysis showing the impacts of potential risks

Without risk, I don’t believe one has a viable estimate.

Related posts:

1. Risk / Uncertainty In SEER and Project Management The question was asked “what probability should I estimate at”  The answer follows: Risk is really uncertainty.  So the question...
2. Bad Assumptions Invalidate Business Value and ROI Analysis A recent email announced “ROI estimates in business fail primarily because managers give too much attention to the “payout” odds and...
3. Risk Analysis & Conference In the Netherlands I spent this week with our international group… at two conferences (ISPA / SCEA and SSCAG) in the Netherlands. There...
4. You Can Manage What You Can’t Measure It was good to see Tom DeMarco’s article in IEEE Computer magazine renouncing his famous statement, “You can’t manage what...
5. Step Seven: Estimate Validation and Review Step Seven: Estimate Validation and Review At this point in the process, your estimate should already be reasonably good-but it...

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