Tuesday, May 05, 2009

Risk versus Uncertainty


In the project management you would hear a lot about management of risk or risk assessment which is basically about taking measures to prevent being less affected by bad events. But is "Uncertainty" the same thing? What is the difference between the risk and uncertainty. For many risk and uncertainty is the same thing. However I think uncertainty is a more general term. Risk is something which you know it but you don't know when, where and how it will happen and how you will be affected. Uncertainty is about lack of information. It can be a risk which you don't know much information about it, but it encompass much more things. Uncertainty can exist in the requirements of the project, uncertainty can exist in that you don't know who is your project stakeholders or uncetainty may exist in that you don't know how your customer will be satisfied with the outcome of the project. Management of risk is comparatively well addressed in project management but management of uncertainty is still an undeveloped area in ptoject management.

1 comment:

Anonymous said...

Hi Kazem,

just to say I enjoyed reading your blog, and wish you success. Would suggest that in your discussion betwene risk and uncertainty you go back to the core definitions from Knight (1925). You may also add to this discussion the notion of ambiguity, i.e. extreme uncertainty to the extent you cannot even define a bounded set of foreseeable scenarios. A recent paper in Management Science (2006) can help you in this regard