Yesterday, I was at the Conference on System Engineering Research (CSER) held this year at Stevens Institute. I sat through a talk which stimulated my curmudgeon tendencies. In the spirit of hopefully generating some contraversy, I will not hold back.
The talk was about an expert-system based engineering risk management system. Essentially, the authors got a set of experts together to identify catagories of risks (people, delivery, product ...), risks in the categories, and a method for identifying level of risk and their consequence and then summing the products of the levels and the consequences. The end is the total amount of category risk. Looking at the output is supposed to give you insight of the overall program risk and the contributing risks.
My problem is that I cannot parse the last sentence. In fact I do not understand terms like "program risk" and say "people risk". There may be a clash of cultures here; to many those terms seem reasonable.
My argument starts here: One can ask 'What is my risk of going over budget?' or 'what is my risk of missing the delivery date?' The answers to these sort of questions are answered using stardard business analytics. See, for example, Mun's text on risk analytsis that defines risk as statistical uncertainty of a quantity that matters. For example, 'time to complete' is a quantity that does matter to a project. The uncertainty in making the date can be measuresd as the variance (or standard deviation) of the estimate of the time-to-complete. (Note, for the math aware, time-to-complete is what the statisticians call a continuous random variable.) So the answer to the question, 'what is my schedule risk?' has an unambiguous, quantified answer. What is 'my people risk' has no such answer. In fact, 'people risk' is not a concept defined in business analytics.
Of course, it does make sense to ask what contributes to the schedule risk. One might fear that the inability to staff the project contributes to the schedule risk. Fair enough. In my mind, that does not make staffing a 'risk', but say a schedule risk factor.
I am not sure why I am so adamant about this, but I am. It could be that I believe that the less precise use and measurement of risk is holding our industry back.
Anyone want to comment or defend the so-called risk management practice underlying the talk I found so annoying ?
Risks of what?