project management Project management is the process of supervising the work of a Project team, team to achieve all project goals within the given constraints. This information is usually described in project initiation documentation, project documentation, crea ...

, the cone of uncertainty describes the evolution of the amount of best case uncertainty during a project. At the beginning of a project, comparatively little is known about the product or work results, and so estimates are subject to large uncertainty. As more research and development is done, more information is learned about the project, and the uncertainty then tends to decrease, reaching 0% when all

residual risk The residual risk is the amount of risk or danger associated with an action or event remaining after natural or inherent risks have been reduced by risk controls. The general formula to calculate residual risk is : \text = (\text) - (\text) wher ...

has been terminated or transferred. This usually happens by the end of the project i.e. by transferring the responsibilities to a separate maintenance group. The term cone of uncertainty is used in

software development Software development is the process of designing and Implementation, implementing a software solution to Computer user satisfaction, satisfy a User (computing), user. The process is more encompassing than Computer programming, programming, wri ...

where the technical and business environments change very rapidly. However, the concept, under different names, is a well-established basic principle of

cost engineering Cost engineering is "the engineering practice devoted to the management of project cost, involving such activities as estimating, cost control, cost forecasting, investment appraisal and risk analysis". "Cost Engineers budget, plan and monitor inv ...

. Most environments change so slowly that they can be considered static for the duration of a typical project, and traditional project management methods therefore focus on achieving a full understanding of the environment through careful analysis and planning. Well before any significant investments are made, the uncertainty is reduced to a level where the risk can be carried comfortably. In this kind of environment the uncertainty level decreases rapidly in the beginning and the cone shape is less obvious. The software business however is very volatile and there is an external pressure to decrease the uncertainty level over time. The project must actively and continuously work to reduce the uncertainty level. The cone of uncertainty is narrowed both by research and by decisions that remove the sources of variability from the project. These decisions are about scope, what is included and not included in the project. If these decisions change later in the project then the cone will widen. Original research for engineering and construction in the chemical industry demonstrated that actual final costs often exceeded the earliest "base" estimate by as much as 100% (or underran by as much as 50%). Research in the software industry on the cone of uncertainty stated that in the beginning of the

project life cycle Project management is the process of supervising the work of a team to achieve all project goals within the given constraints. This information is usually described in project documentation, created at the beginning of the development process ...

(i.e. before gathering of

requirements In engineering, a requirement is a condition that must be satisfied for the output of a work effort to be acceptable. It is an explicit, objective, clear and often quantitative description of a condition to be satisfied by a material, design, pro ...

) estimates have in general an uncertainty of factor 4 on both the high side and the low side. This means that the actual effort or scope can be 4 times or 1/4 of the first estimates. This uncertainty tends to decrease over the course of a project, although that decrease is not guaranteed.

Applications

One way to account for the cone of uncertainty in the project estimate is to first determine a 'most likely' single-point estimate and then calculate the high-low range using predefined multipliers (dependent on the level of uncertainty at that time). This can be done with formulas applied to spreadsheets, or by using a project management tool that allows the task owner to enter a low/high ranged estimate and will then create a schedule that will include this level of uncertainty. The cone of uncertainty is also used extensively as a graphic in

hurricane A tropical cyclone is a rapidly rotating storm system with a low-pressure area, a closed low-level atmospheric circulation, strong winds, and a spiral arrangement of thunderstorms that produce heavy rain and squalls. Depending on its ...

forecasting, where its most iconic usage is more formally known as the NHC Track Forecast Cone, and more colloquially known as the Error Cone, Cone of Probability, or the Cone of Death. (Note that the usage in hurricane forecasting is essentially the opposite of the usage in software development. In software development, the uncertainty surrounds the current state of the project, and in the future the uncertainty decreases, whereas in hurricane forecasting the current location of the storm is certain, and the future path of the storm becomes increasingly uncertain). Over the past decade, storms have traveled within their projected areas two-thirds of the time, and the cones themselves have shrunk due to improvements in methodology. The NHC first began in-house five-day projections in 2001, and began issuing such to the public in 2003. It is currently working in-house on seven-day forecasts, but the resultant cone of uncertainty is so large that the possible benefits for

disaster management Emergency management (also Disaster management) is a science and a system charged with creating the framework within which communities reduce vulnerability to hazards and cope with disasters. Emergency management, despite its name, does not actua ...

are problematic.

History

The original conceptual basis of the cone of uncertainty was developed for engineering and construction in the chemical industry by the founders of the American Association of Cost Engineers (now AACE International). They published a proposed standard estimate type classification system with uncertainty ranges in 1958 and presented "cone" illustrations in the industry literature at that time. In the software field, the concept was picked up by Barry Boehm. Boehm referred to the concept as the "Funnel Curve". Boehm's initial quantification of the effects of the Funnel Curve were subjective. Later work by Boehm and his colleagues at

USC USC may refer to: Education United States * Universidad del Sagrado Corazón, Santurce, Puerto Rico * University of South Carolina, Columbia, South Carolina ** University of South Carolina System, a state university system of South Carolina * ...

applied data from a set of software projects from the U.S. Air Force and other sources to validate the model. The basic model was further validated based on work at NASA's Software Engineering Lab. The first time the name "cone of uncertainty" was used to describe this concept was in ''Software Project Survival Guide''.

Implication

* Estimates (e.g. on duration, costs or quality) are inherently very vague at the beginning of a project * Estimates and

project plan A project plan, is a series of structured tasks, objectives, and schedule to a complete a desired outcome, according to a project managers designs and purpose. According to the Project Management Body of Knowledge (PMBOK), is: "...a formal, appr ...

s based on estimations need to be redone on a regular basis * Uncertainties can be built into estimates and should be visible in project plans * Assumptions that later prove to be mistakes are major factors in uncertainty

References

* Footnotes {{reflist, refs= {{cite web , title=The cone of uncertainty , website=Construx , url=https://www.construx.com/books/the-cone-of-uncertainty/ {{cite journal , last=Bauman , first=H. Carl , date=April 1958 , title=Accuracy Considerations for Capital Cost Estimation , journal=Ind. Eng. Chem. , volume=50 , issue=4 , at=55A–58A , doi=10.1021/i650580a748 McConnell, S (2006). ''Software Estimation: Demystifying the Black Art''. Microsoft Press. p. 38. {{cite web , title=Definition of the NHC Track Forecast Cone , website=NHC - National Hurricane Center (National Oceanic and Atmospheric Administration) , url=https://www.nhc.noaa.gov/aboutcone.shtml {{cite web , last=Hennen , first=Dave , date=24 August 2011 , title=How forecasters develop hurricanes' 'cone of uncertainty' , website=

CNN Cable News Network (CNN) is a multinational news organization operating, most notably, a website and a TV channel headquartered in Atlanta. Founded in 1980 by American media proprietor Ted Turner and Reese Schonfeld as a 24-hour cable ne ...

, access-date=8 March 2020 , url=https://news.blogs.cnn.com/2011/08/24/how-forecasters-develop-hurricanes-cone-of-uncertainty/, archive-url=https://archive.today/20130102060010/http://news.blogs.cnn.com/2011/08/24/how-forecasters-develop-hurricanes-cone-of-uncertainty/, url-status=dead, archive-date=January 2, 2013 {{cite web , date=1 June 2007 , title=The 'Cone of Uncertainty' and Hurricane Forecasting: CRED researchers analyze an iconic climate forecasting visual aid , website=Center for Research on Environmental Decisions (CRED) , url=http://cred.columbia.edu/files/2012/02/CREDPressRelease_ConeOfProbability_061207.pdf {{cite news , last=Kleinberg , first=Eliot , date=22 April 2011 , title=Smaller 'cone of probability' cuts down on hurricane fear , newspaper=The Palm Beach Post , url=https://www.palmbeachpost.com/weather/hurricanes/smaller-cone-probability-cuts-down-hurricane-fear/IVV6rMjY4MnPTJCaYYpkgK/ Gorey, J.M. (1958). "Estimate Types", AACE Bulletin-November 1958. Stutzke, D. (2005). ''Estimating Software Intensive Systems'', Pearson. p. 10. {{cite book , last1=Boehm , first1=Barry W. , author-link=Barry Boehm , last2=Horowitz , first2=Ellis , last3=Abts , first3=Chris , last4=Brown , first4=A. Winsor , last5=Chulani , first5=Sunita , last6=Clark , first6=Bradford K. , last7=Madachy , first7=Ray , last8=Reifer , first8=Donald J. , last9=Steece , first9=Bert , last10=Boehm , first10=Harrowitz , display-authors=1 , date=2000 , title=Software Cost Estimation with COCOMO II , others=(with CD-ROM) , title-link=COCOMO , location= Englewood Cliffs NJ , publisher=

Prentice Hall Prentice Hall was a major American publishing#Textbook_publishing, educational publisher. It published print and digital content for the 6–12 and higher-education market. It was an independent company throughout the bulk of the twentieth cen ...

, isbn=9780130266927 NASA (1990). Manager’s Handbook for Software Development, Revision 1. Document number SEL-84-101. Greenbelt, Maryland: Goddard Space Flight Center, NASA. p. 3-2. McConnell, S (1997). ''Software Project Survival Guide'', Microsoft Press.

External links

The Cocomo 2.0 Software Cost Estimation Model

* ttps://web.archive.org/web/20090205225331/http://homepages.inf.ed.ac.uk/dts/pm/Papers/nasa-manage.pdf The NASA Software Engineering Laboratory: Manager's Handbook for Software Development
Explanation of Cone of Uncertainty from Construx - Software Development Best Practices

The Cone of Uncertainty and Hurricane Forecasting

The Cone of Uncertainty
Project management

Applications

History

Implication

See also

References

Further reading

External links