Managing investments in emerging technologies: The case of IVHS/ITS

This report discusses the use of uncertainty analysis for decision evaluation in project management. Following Haynes, Phillips and Srivastava (1993), we introduce the difference between committed costs and actual expenditures as a margin of control. We then discuss the role and value of information in closing the gap between cost commitments and expenditures. Further by using a measure of uncertainty we construct a cost-risk evaluation framework for assessing the Go/No Go decision at each stage of project implementation. We believe this is a first step in operationalizing the information gain/uncertainty reduction decision role in project continuance. We discuss this concept in the context of the emerging transportation technologies of Intelligent Vehicle Highway Systems (IVHS) now called Intelligent Transportation Systems (ITS).