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The Cone of Uncertainty is a term often used in project management to describe the phenomenon by which project unknowns decrease over time.  The Cone of Uncertainty framework is used in software estimation to determine the the most likely outcome.

As the project proceeds and more research and development is completed the amount of uncertainty decreases, eventually approaching zero. Project unknowns, or uncertainty, largely correlate to variances in project estimates.  Plotting these variances over time creates a cone or funnel shape (variance percentages shown are only examples, values may vary).

Understanding the principle behind the cone of uncertainty can help project managers and analysts as they estimate projects.  The amount of variance (estimated versus actuals) that will occur at different phases of a project can be estimated based on historical project data .  Then, starting with an estimate which reflects the most likely outcome, the historical variation can be used to determine the type of multipliers that should be applied to create a high to low estimate range. 

It’s worth noting that the range of variance expected during projects may also change based on the project type.   Whether it’s a product launch, process improvement, or information system, some projects may have more or less unknown information at various phases.

The Cone of Uncertainty has its origins in the conceptual work done by the American Association of Cost Engineers and it was later picked up and used in the software field.  The first use of the actual term "Cone of Uncertainty " was by Steve McConnell is his book Software Project Survival Guide.

“The primary purpose of software estimation is not to predict a project’s outcome; it is to determine whether a project’s targets are realistic enough to allow the project to be controlled to meet them” — Steve McConnell

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Chris Adams
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