Risk vs. Uncertainty
When you model risks in your schedule, do you apply the risk as uncertainty or a risk event? This topic describes the difference between the two.
What is a Risk?
A risk is when you know the range of potential outcomes in advance, and/or you know the odds of these outcomes in advance. For example, when you role a dice, you know in advance what the odds are for each possible outcome (1/6 or 16.7% for each of 1-6).
What is Uncertainty?
Uncertainty is when you don't know what the outcome will be or what the range or distribution of outcomes will be. For example, for your drive to work, you could calculate the risk of an accident delaying you or other discrete events but the total travel time is more uncertain due to a number of things that could slow you down (construction, accidents, red lights, and so on).
Sources of Uncertainty
- Variability — A range of outcomes that are possible but you are not sure which one may actually happen.
- Ambiguity — Uncertainty arising from imperfect knowledge.
- Unknown/Unknowns — Risks that we do not see because we don't know that we should be looking for them.
Mitigating Uncertainty
Mitigation may be worthwhile, depending on the contribution it makes to your risk-adjusted schedule.
You can break areas of duration uncertainty into smaller pieces or refine them through additional research an effort.