Counterfactual
In a cost memo, the estimate of what the correct number or outcome would have been, absent the quality failure, used as the baseline against which the actual cost is measured. The strength of a cost estimate depends directly on the strength of its counterfactual.
Defined in 4 GAGE programs, which carry 5 distinct definitions of it. The wording above is taught in AI Data Governance: The Data Chair.
How each discipline defines it
The same term does different work depending on who is using it. These are the definitions as each program teaches them, unedited.
In a cost memo, the estimate of what the correct number or outcome would have been, absent the quality failure, used as the baseline against which the actual cost is measured. The strength of a cost estimate depends directly on the strength of its counterfactual.
The world you would have had without the AI over the same period. Honest ROI is the difference between the real world and the counterfactual, not between past and present. Some of any before-to-after change would have happened anyway.
What would have happened to a metric if the intervention (the robot) had not occurred. A control group is the practical tool used to estimate the counterfactual, since the true counterfactual can never be directly observed.
The part of a derivation trail that names a real, specific alternative to the chosen control and states why it was rejected, ideally with a measured, checkable reason rather than an intuition.
In a budget defense, the honest description of what happens if a proposed investment is not funded, priced through a real mechanism (a documented case or your own estate's near-miss history) rather than a vague warning.
Where it is taught
The exact lessons this term appears in. The first 7 topics of every program are free with a free account.
- Derivation Trails · The Capstone: Deploy and Defend, Agentic AI Governance: Applied Mastery
- The cost of bad data: pricing last quarter's silent drift in real money · The Money of Data, AI Data Governance: The Data Chair
- The budget defense: winning quality and governance funding from a board that wants features · The Money of Data, AI Data Governance: The Data Chair
- The honest ROI: measuring what the AI actually changed at your organization, not what the vendor promised · The Money: Budgets, ROI, and Risk, AI Governance: Applied Mastery
Terms it appears with
Not an alphabetical neighbourhood: these are the terms taught in the same lessons, ranked by how often they appear together.