How to Manage Uncertainty in Projects?

What is Uncertainty in Project Management?

Project managers make every effort to comply with all aspects and eliminate ambiguity in project management to assure the success of their endeavour.

However, no one can anticipate the future, and project leaders are not immune to the reality that obstacles may arise throughout the project’s progress, causing anxiety and uncertainty.

Ability to anticipate occurrences that may influence the project or forecast the outcome of parameters. Uncertainties have a set of possible outcomes represented by functions that indicate the likelihood of each possibility. Uncertainty functions can be used to represent either discrete occurrences or continuous outcomes.

Uncertainty in Project Management

Although we can never be certain of what will happen in the future, project managers may overcome these obstacles by preparing ahead of time. They can begin the project early to address any issues that arise and fix them as quickly as feasible. As the adage goes, if you don’t have a plan, you’re preparing to fail. However, not all plans succeed, so it is advised to prepare for Plan B if Plan A fails.

Managers that are skilled and experienced utilize decision milestones at some other times. They may foresee potential hazards and use risk management to avert disasters with this technique.

Project managers offer higher project estimates than the actual completion estimate as they include some contingencies.

While it is nearly difficult to eliminate uncertainty in project management, there are techniques to mitigate it. The estimate gets more trustworthy, and the uncertainty decreases as fewer components are included in the estimation.

How to Manage Uncertainty in Project Management?

Remember to keep these three points in mind while managing changes or uncertainty in the project:

1) Be more adaptable

• For smaller, faster-moving projects, consider utilizing an agile project management approach.
• Time can be used as a contingency buffer.
• First, implement the riskier features.
• Retain the dates if you can, but alter the scope.

2) When it comes to commitment dates, talk with confidence and the likelihood

• Make use of a scheduling program that allows for varied estimations.
• Data may be used to forecast completion dates with a high degree of certainty.
• Demonstrate to management how the project manages uncertainty and adapts to change.

3) Identify potential hazards and add time to the high-end projections

• Determine which part of the project is the most dangerous (i.e., most uncertainty; greatest potential for change orders).
• Examine where you might need to add additional time to your plan based on the highlighted hazards. Add a one-week time contingency cushion, for example, before a crucial milestone.
• Add the extra time to your best/worst case estimate’s high estimate. This is your method of acknowledging the possibility of the risk and including it in your ranging estimates.
• Integrate tribal knowledge and experience from previous projects.

How to manage risk during uncertainty in a Project?

A project risk is an uncertainty that may be either a good or negative aspect, and it can have a major impact on the performance that can be achieved.

Risk management entails identifying those variables, devising strategies to mitigate their negative impacts, or simply accepting them if they have no detrimental impact on performance.

Frequently, the project team creates contingency plans for major risks. They then prepare such strategies and implement them as needed.

Managing risks — dealing with and decreasing uncertainty elements — is an important part of becoming used to ambiguity in project management. No project manager can anticipate what will happen, but they can learn to assess the level of uncertainty in the project and discover strategies to adapt or avoid it.

Following the uncertainty reduction, it’s time to look at the remaining elements and determine which methods to employ based on the restrictions.

• A defined scope may provide a fixed timetable by assigning roughly 30% of the schedule for risks.
• In projects with a high degree of risk, the scope can be modified, and the only thing that can be controlled is the timetable.
• Employees are taught to address urgent problems rapidly in projects with the highest risk since the scope is unclear and there is no defined timeline, such as in reactive firms and departments like customer service.

What are the types of risk in project management?

Uncertainty-based management is a more forward-thinking strategy that draws planning, monitoring, and management style from an uncertainty profile that includes 4 forms of risk: variation, foreseen uncertainty, unforeseen uncertainty, and chaos.

Managers advance from traditional techniques based on a set sequence of activities to approaches that enable the vision to alter, even in the middle of a project, from variation to chaos.

1) Variation

Variation arises from a variety of tiny factors, resulting in a range of values for a given activity — for example, activity X may take 32 to 34 weeks. Managers know the order and kind of activities at the outset of projects with a lot of variety and have well-defined objectives.

The project plan is thorough and consistent, yet deadlines and finances differ from expectations. When the timetable shifts, the critical path (the sequence of activities that defines the total project length) shifts, necessitating project managers to keep track of changes across the board, not just in essential activities.

2) Foreseen Uncertainty

Uncertainties the team cannot predict are recognizable and understood impacts that the team cannot be confident would occur. Unlike variation, which is caused by a combination of tiny effects, anticipated uncertainty is unique and may necessitate full-fledged risk management with many alternative strategies.

Pharmaceutical development is a prime example of anticipated risk. Its primary goal is to recognize and manage risks, mostly in the form of medication side effects.

3) Unforeseen Uncertainty

As the name implies, unexpected uncertainty cannot be recognized before project planning. There isn’t a backup plan. The team is either ignorant of the event’s probability or believes it is unlikely, so they don’t bother planning for it. People are uneasy with “unknown unknowns,” as they are frequently referred to, because present decision tools do not handle them.

Unprecedented uncertainty, on the other hand, is not necessarily produced by dramatic out-of-the-blue happenings. It can also result from the unforeseen interplay of several events, which might theoretically be predicted.

4) Chaos

Those involving unanticipated uncertainty begin with relatively solid assumptions and goals, but projects involving chaos do not. Even the project plan’s basic structure is unknown, as it is when technology is in flux or when study, rather than development, is the primary aim. Frequently, the project’s ultimate consequences are opposed to the project’s initial goal.

Sun Microsystems, for example, thought of Java as software to operate a controlling device for domestic appliances in 1991. Java was not widely used as a programming language for Web sites until 1995.

How do project managers manage uncertainty?

To effectively manage risk and uncertainty, a project manager is required to concentrate on the following nine areas:

1. Make a risk register for the project.
2. Determine the project’s hazards.
3. Recognize opportunities.
4. Determine the likelihood and magnitude of the effect.
5. Decide on an answer.
6. The project’s cost is estimated.
7. Assign some knowledgeable owners.
8. Review project risks regularly and escalates any issues that arise.
9. Risk to the project should be reported.