The appraisal and control of complex development projects

Abstract

The problems of development cost estimating are examined in relation to the uses for which such estimates are required, and to available estimating methods. Project appraisal under uncertainty is examined by Bayesian methods to demonstrate that expectation of information becoming available during the project can influence appraisal. Control is examined from a cybernetic standpoint and from the viewpoint of organisational design. It is concluded that appraisal and control are dual aspects of the same concept and that ‘cost control’ cannot successfully be separated from technical control. The controversy which has taken place in recent years concerning the validity of the current approach to estimating and cost control is attributed to failure of the protagonists to perceive the full extent of the problem; and the ‘cascade’ approach is put forward as a means of resolving the controversy.