Project Uncertainty Management: A New Approach – The ‘Lost Opportunities’ Practical uncertainty management seen from a project joint perspective

摘要

Abstract: The thesis examines uncertainty management in a single-project environment. In addition to themain chapters, Appendix I contains the published papers that this thesis is built upon, Appendix IIcontains the bibliography from the project ‘Practical Uncertainty Management in a NorwegianProject Owner’s Perspective’ (‘The PUS project’), and Appendix III lists the references.In the early 2000s, uncertainty analysis became more or less mandatory for large projects in Norway.However, there was no clear evidence that the companies and projects subsequently used the resultsof the analyses when managing uncertainty. A lot of projects experienced that although they haddone an uncertainty analysis they could not use the results in their uncertainty management process.Some of the relevant questions worth addressing are: Who should be involved in the uncertaintymanagement process? What type of uncertainty or risks should be addressed in the process? Whoshould be responsible for following up the uncertainty on more strategic and tactical levels? Who‘owns’ the process and who should be responsible for managing it? What types of practical tools areneeded and how should the uncertainty management process be organized?Projects have traditionally strived towards predictability and to keep all critical factors under control.However, for large and complex projects, such predictability does not exist in reality.In the past, a project was about delivering a unique task, whereas today many projects are regardedas ‘change agents’ and they therefore have purpose: they should deliver the objectives and givemaximum benefit for the project owners. This view creates new demands regarding how projectsshould be planned and executed.In classical project management theories, project managers were supposed to ‘stick to the plan’, anddeliver their projects according to specifications and within the cost and time frame established atthe beginning of the project. However, in a shifting and changing environment with a lot of foreseenand unforeseen uncertainties, sticking to the plan is no longer an option for many projects. Instead,they need to manage uncertainty.Most important findings and contributions to research presented in this thesisThe empirical data in this thesis demonstrate that many projects still do not deal with threats andopportunities in a balanced way. The data from studies show more or less the same pattern – thereare many more threats than opportunities in uncertainty registers. Also, opportunities that wereidentified in the execution phase were few and often not exploited at all. The case studies show thatthe private sector and public sector projects had more or less the same focus on threats. In addition,private projects were not better at exploiting opportunities than public projects. All of the studiedprojects seemed to be quite conservative about new ideas and change, and were not seeking newopportunities in their execution phase. Some opportunities were identified late in the project duringuncertainty analysis workshops, yet the identification of new opportunities does not mean thatprojects will utilize such opportunities after the workshops are finished. The empirical data show that managing risk is hard and exploiting opportunities is even moredifficult, and is a different task than dealing with threats. The empirical data also show that exploitingopportunities often requires the project owner and the project management team to accept changesand have both the will and the power to change the solutions or deliverables described in the plansand in project management documentation. It is often a difficult task to motivate people to change; an opportunity must be deemed significantly better than the planned solutions if it is to beconsidered worth taking, since implementing an opportunity means that the project must use moneyand time to change plans or, in the worst case, the whole concept.In addition, the data show that many projects do not want to consider new opportunities. They mayconsider the list of opportunities that comes up in an uncertainty analysis as a gamble, because itmeans that they will need to change the process or concept, and it may be a gamble that the projectmanagement team will not be paid for or will not derive any benefit from. It is not possible to get anopportunity into a project without the project management team’s willingness to change the existingplans. This means getting an opportunity into the project demands willingness and authority fromthe project sponsor and project management, since both must disregard something that they earlierin the process had agreed upon as the best solutions. This suggests that an opportunity has to beextremely interesting to be considered, because- The project must be willing to change contracts, concepts, and plans to exploit a possibleopportunity- The project must abandon something it had earlier accepted as the best solution- The project must use time and money on exploiting something that is uncertain – it cannotbe certain that the effect will be positive or give benefits.The six most important contributions in this thesis can be summarized as follows1. The project uncertainty management maturity has increased as a result of the focusedimprovement efforts in Norway2. The context matters and the focus of the analyses will differ if the project owners participatein the process3. A new and improved uncertainty management process has been developed4. A new tool for uncertainty management has been developed5. Five characteristics of uncertainty and four characteristics of opportunities have beendeveloped6. Four characteristics of opportunities in projects have been developed Research on organizations and projects has shifted from developing tools and techniques to focusingmore on understanding human behaviour. This means that project management scholarsacknowledge that both the context and the humans involved matter, and that there is a need tounderstand the organizational culture and the process in use in order to develop and changeorganizations.If a company wants to develop skills in uncertainty management, it needs to understand itsemployees’ behaviour, the culture in the company, the project owners’ role, and how stakeholdersinteract with the uncertainty management process. If projects are to be efficient in dealing withuncertainty, they need to understand, interpret, and handle uncertainty both within and outside theproject. Project manager must understand their circumstances and the impact of the efforts thatthey have initiated. If there is no focus on learning and knowledge creation as projects progress, thenthe process of managing uncertainty will not be efficient. This implies that the mother-organization,which is responsible for training and developing new methods, needs a strong focus on learning andknowledge sharing so that the new methods, tools, and techniques will be applied in ‘all’ projects. Since 2005, a joint Norwegian effort on uncertainty management comprising the PUS project andseveral projects in the Concept research programme has clearly improved the level of maturityregarding uncertainty management in many companies in Norway. However, this is still no guaranteeof success in all projects. Fewer cost overruns come at a price – there is a tendency to spend moremoney on each project, which means Norway gets fewer roads, railways, schools, and oil plants forthe same money today as in the mid-2000s.A high level of maturity regarding uncertainty management does not necessarily mean that allprojects are efficient in their planning and execution. It is not known whether projects in Norwayhave become better at estimating uncertainty in time and cost, whether the estimates are morerealistic now than in year 2000, whether the project managers and owners simply have been betterat adding contingencies to their budgets, whether the contingencies or time buffers have beenraised, or whether project managers and owners has been better at managing the uncertainty thatexists in our changing world.