Enhanced Scenario Based Method
By providing easily derived measures of risk and confidence, the enhanced scenario-based method (eSBM) helps acquisition programs better plan and manage their cost risks. The MITRE-developed eSBM approach offers an alternative to traditional advanced statistical methods for generating measures of program cost risk.
First, eSBM users build scenarios to represent a program’s “risk story.” Users then analyze the scenarios and measure how identified risks might increase a program’s cost above the amount planned. With its simplified analytics, eSBM eases the mathematical burden on analysts, while encouraging a careful and deliberative approach to cost risk analysis.
With today’s emphasis on affordability-based decision-making, eSBM promotes realistic program cost estimates by offering decision-makers a traceable and defensible basis behind measures of cost risk. Using algorithms based on cost-performance histories from hundreds of government programs, eSBM:
- Brings out a discussion of risk scenarios to decision-makers, where deliberations on their credibility and realism are a prime focus
- Provides a measured basis for the amount of cost reserve needed to guard against identified program risks
- Does not require the use of statistical methods to develop valid measures of cost risk and reserves needed to manage unexpected cost growth
Since MITRE’s development of eSBM in 2010, the Department of the Navy’s Naval Center for Cost Analysis (NCCA) joined us a co-developer, user, and promoter of the eSBM tool.