Good and simple – a dilemma in analytical processes?

Abstract

Purpose -The purpose of this paper is to describe the transfer of experiences to improve the basis for overcoming the dilemma of trying to achieve analyses and systems that are both good and simple. The quality of decisions relating to projects depends on how well the assumed basis for the project actually fit the reality of the situation in which the consequences occur. Good value and cost estimations support good decisions about projects insofar as the assumptions on which they are based mirror the reality, and the decision makers can understand the analysis. Design/methodology/approach -The paper uses a longitudinal case study and qualitative analysis. Data relating to a large number of cases have become available to the authors through many years of research and consulting activities. Through joint experience and discussion the patterns are analysed. This paper is descriptive with respect to the challenges and empirical examples. The analysis itself ends with a rather normative conclusion. Findings -There is a dilemma embedded in the processes used to analyse uncertainty and risks associated with projects. On the one hand, an important task is to reduce the complexity of a given situation to render the issues sufficiently simple for them to be understood and assessed. On the other hand, the models and assumptions upon which an analysis is based have to be sufficiently precise and detailed in order to make sense. The same dilemma is found when considering actions to address risks and uncertainties, as well as in designing management systems. It is concluded that the dilemma is real. Solutions have to be found among both good and simple options.Research limitations/implications -The paper does not answer questions on "how to" and does not dig deep into theoretical perspectives on the current dilemma. More research to understand all aspects of the issue is needed. Practical implications -Uncertainty analysis and management systems have to be good (precise enough) and at the same time simple (practical). There is no value unless it is used. Practical examples in the paper are intended to help practitioners identify alternative options. Originality/value -The dilemma of good and simple has not been explicitly addressed before in light of practical experience and theory. The value added is increased awareness of an important problem in analytical processes.

Challenges in Cost Estimation under Uncertainty—A Case Study of the Decommissioning of Barsebäck Nuclear Power Plant

“…There seems to be challenges with defining the purpose of the analysis, identifying uncertainty elements, quantification of effects, calculation and estimation and communication of the results from the analysis. It is concluded that [2]:…”

“…The dilemma between good and simple in analytical processes have been discussed [2]. There seems to be challenges with defining the purpose of the analysis, identifying uncertainty elements, quantification of effects, calculation and estimation and communication of the results from the analysis.…”

“…A typical uncertainty analysis process does not include enough effort into the preparations of the process [2]. Often the client buying uncertainty or risk analyses are not able or willing to take enough time for proper preparations.…”

“…This means we want to make the issues in question sufficiently simple so that they can be understood and assessed, while at the same time making the models and assumptions upon which analyses are based sufficiently precise. This is a known dilemma [2]. For the Barsebäck case, we applied an approach previously well proven in traditional infrastructure projects to do cost estimation under uncertainty.…”

“…Many authors identify numerous challenges in cost estimations and uncertainty analyses in complex projects [2][3][4][5][6]. We want to show that it is possible to handle at least some of these challenges through a systematic approach to the process and by choosing the right analytical method and tools and performing the analysis well.…”