Do you think PM risks and uncertainties are the same? If you do, you are not alone. However, to prove that you are on top of what is important to your stakeholders, clarify the definition of both. In this article at PM Study Circle, Fahad Usmani explains the differences between PM risks and uncertainties.
Categorize PM Risks and Uncertainties
PM risks and uncertainties would seem the same, but there are subtle differences between them. You must understand those differences to manage your team and stakeholders well. Here are some tips:
When you confront risks, they can be known or unknown. You identify the known ones early and create a contingency plan to solve them as they turn up in the project life cycle. They can positively or negatively affect the project’s performance. A risk response plan helps you curb the negative aspects while optimizing the positive ones.
Uncertainties are those for which you do not have any information. However, you cannot classify it as an unknown risk. For an unknown risk, you might understand its origin, but you failed to recognize it. For uncertainties, you do not have any background despite acknowledging it exists.
Let’s say you have two teams with famous players. Though you cannot predict who will win, you can analyze and forecast based on individual players’ and teams’ past performance. That way, the stakeholders know what they are investing in. These are the PM risks.
What if you did not know which player is on which team? Can you predict the outcome to your stakeholders? No, not without knowing the members of each team. These are uncertainties.
- You can calculate what you can expect in the future for PM risks, but you cannot do so for uncertainties.
- You can somewhat handle risks based on their classification. However, uncertainties cannot be categorized and thus are out of your control.
- You can measure the risks, but not the uncertainties in a project.
- Probability mapping is possible with PM risks, but uncertainties are unknown and unpredictable.
PM risks are manageable because you can place them into a definitive response format and measure their outcomes. Without proper data, you cannot create the same for uncertain events.
To view the original article in full, visit the following link: https://pmstudycircle.com/2012/02/risk-vs-uncertainty/