Decision Analysis

Projects Management and Risk


By Almahdy Eltonsy

Africa Service Manager
Affordable Care, Life Care Solutions and Ultrasound

Cairo, Egypt


Definition of a project in accordance with DIN 69901:

A project is an undertaking which is basically characterized by the uniqueness of its overall preconditions, for example:

  • Objectives.
  • Parameters in terms of time, finances, human resources or other factors.
  • Delineation in relation to other projects.
  • Project-specific organization.

Putting Real Options to Work to Improve Project Planning – Project Analysis?

Climb the Decision Tree

Most strategic plans change in accordance with the magnitude of the uncertainty. By assigning a quantifiable value to uncertainty, real options valuation enables projects manager to gauge and react to risk over time.

Why use a decision tree?

For more than a decade, consultants and academics have been touting real options valuation (ROV) as a means of improving the decision making that goes into a project. To date, however, ROV has not been widely adopted as a planning tool. Many project managers worry that the esoteric Black-Scholes equations frequently used to evaluate real options would require the addition of expensive software and a specially trained finance expert to the project team.

The familiar decision-tree framework is well suited to many of the contingencies that arise over the course of a project.

Decision analysis can help PMs to address issues such as:

How to allocate resources to ensure that the project meets specific deadlines?

When to scale up or delay investments, and when to exit a project

To make it more clear, Deciding on in-house

A simple decision such as whether to develop a new technology in-house or acquire it from an outside party illustrates the utility of the decision-tree framework. In-house development requires three years and leads to three possible outcomes. In two of these outcomes, the firm expects to create significant value. But there’s also a 25 percent chance that the in-house development would fail; obviously, this outcome would have no payoff. Figure 1 shows this decision using a decision-tree framework. The probabilities of the three outcomes are based on a combination of managers’ experience and judgment.


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About the Author                                      

Almahdy Eltonsy

Cairo, Egypt


Almahdy Eltonsy
, IPMA – B is a Senior Project Manager in the HealthCare industry, and the first healthcare PM granted the IPMA-B certification in Egypt. Starting with Siemens in 1993, Almahdy has extensive technical and managerial experiences, gaining the ability to work cross-functionally in a time-intensive environment.  One of the most important milestones in Almahdy’s project management career is Children’s Cancer Hospital in Egypt (57357) (www.57357.com ), a 30 Million Euro Project. As a GPM for this strategic pivotal project, the scope was not only project management but also the service management, in addition to work with accreditation bodies.

In 2012 Almahdy moved to GE HealthCare to work as a product service manager for Surgery – X-Ray – Intervention – Ultrasound – Life Care solutions, using his experience in leading the service team with project management methodology. Almahdy’s motive to change is to take a new challenge and exposure to new cultures and discipline, taking advantage of his technical and managerial skills and using the project management tool box in general management aspects.

In addition to his work in healthcare, Almahdy worked as an IT project developer with one of the largest media and advertising groups in Egypt.  Almahdy was able to realize a new methodology and software for Media planning and advertising campaign planning. Almahdy holds a B.Sc. in Systems and Biomedical Engineering from Cairo University – Faculty of Engineering, and passed many specialized courses in Siemens, GE and Microsoft.  Linkedin: Almahdy Eltonsy.  Email: [email protected]

To view other works by Almahdy Eltonsy, visit his author showcase in the PM World Library at http://pmworldlibrary.net/authors/almahdy-eltonsy/.