Transcript Estimating -- Chapter 13

TODAY
1.
PERT REVIEW (last part of Ch 7)
2. CAPM Exam Details
3. Time and Cost Estimation
PERT (Program Evaluation and
Review Technique)
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Not supported by MS Project
Gives you probabilities of completion of a
project by a certain time
Calculates a standard normal random
variate and uses a probability table to find
its probability
PERT INPUTS
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A = most optimistic time
M = most likely time
B = most pessimistic time
PERT formulas
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Task mean = (A + 4*M + B)/6
Task Std. Dev. = (B-A)/6
Project mean = sum of all the task means of
tasks on the critical path
Project std. Dev = sum of all the task
standard deviations of tasks on the critical
path
Beta Distribution
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m
b
- To apply for the PMP, you need to have: A four-year degree (bachelor’s degree or the global equivalent) AND at least three years of project management experience, with 4,500
- The CAPM exam is focused on the PMBOK Guide. It consists of 150 questions made up of 135 'scored' questions and 15 pre-test questions (3-hour exam). The pass mark for C
- The structure of the CAPM exam is:
The CAPM
The CAPM Certification lasts 5 years
l Then you must re-take the CAPM exam or
take the PMP exam
Joining PMI as a student costs $32/yr
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– Joining gives you free access to PMBOK and
other ebooks
– Joining reduces the cost to sit for the exam
The CAPM Exam
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150 Questions
– 15 pretest questions
– 135 actual exam questions over PMBOK
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3 hour exam
The pass threshold is 65%
CAPM Exam Structure
PMBOK Chapter
# Questions per Chapter
Ch. 1 -3 - Project Management Processes
20
15%
Ch. 4 - Integration Management
16
12%
Ch. 5 - Scope Management
14
11%
Ch. 6 - Time Management
16
12%
Ch. 7 - Cost Management
10
7%
Ch. 8 - Quality Management
8
6%
Ch. 9 - Human Resource Management
11
8%
Ch. 10 - Communications Management
8
6%
Ch. 11 - Risk Management
12
9%
Ch. 12 - Procurement Management
10
7%
Ch. 13 - Stakeholder Management
10
7%
Estimation: An ART
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That made McDonnell (of
McDonnell/Douglas Aircraft) wealthy
Accurate intelligence information is a help
Three types of cost estimates
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Five-ten year-out planning
– Ballpark estimates—better to over estimate
– Used to make decisions about which projects
will be funded when
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Two-year-out planning
– More refined estimates that consider current
costs
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Immediate execution estimates
– Used to drive execution
INPUTS
1. Activity list
2. Constraints
3. Assumptions
4. Resource
requirements
5. Resource
capabilities
6. Historical
information
TOOLS
1. Expert
judgment
2. Historical data
3. Analogous
estimating
4. Simulation
OUTPUTS
Activity
duration
estimates
1.
2. Basis of estimates
3. Activity list updates
The Cost estimation Story—
Steve McConnell
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You can’t tell exactly what its going to cost
until you know exactly what
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IT is.
(Which is why we spent so much time
talking about thorough product
conceptualization and definition)
The WBS as price estimating tool
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Provides the basis for effective and open
communication between functional
management and program/project
management
After pricing is complete the WBS forms
the basis of a communications tool by
documenting the performance agreed on in
the pricing effort.
Differentiate Estimates from
Targets and Commitments
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“We will have it done in three months”
“Why three months???”
“Because that is when the trade show
happens…”
Is it better to overestimate or
under estimate
Effect
Cost
Schedule
Underestimation
<100%
Overestimation
100%
>100%
Target as a Percentage of Nominal Estimate
A Rule of Thumb
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The time to design, document and code a
module =
equals the time to debug it (TEST IT)
At least 45% of the total time devoted to
testing
According to Gildersleeve
Cone of Uncertainty
The Standish Group’s Project Outcomes
Estimating Rules (Rakos)
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Never use inexperienced persons to estimate
Get group estimates if possible
Never force an estimate on a programmer
Never take an average of different estimates
Granularize down to FOUR or less weeks, roughly
Always add for contingency
Always quote a range when giving estimates
Rakos’ Conclusions to
Estimating
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Our weakest talent
Estimating is iterative
Estimating is still an art
Review: Project Time
Management Processes
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Project time management involves the processes
required to ensure timely completion of a project.
Processes include:
– Define activities
– Sequence activities
– Estimate Activity resources
– Estimate Activity durations
– Develop Schedule
– Control Schedule
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Which of these gets performed in the Planning
and Budgeting Stage??
A Typical Task Duration Process
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Assign the task to a project player
Ask the player how long it will take him or her to
complete the task (This gives the player ownership
in the planning)
Player provides their best estimate
The player understands that they will be required
to complete the task within their estimate—their
feet will be “held to the fire”
Time Estimation: Goldratt
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Claims team players add safety to their
estimates
What is safety??
Can determine how much by asking the
question, “How sure are you that you will
finish your task in the time you allotted?”
Time Estimation--programmers
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Naïve programmers have a horrible
reputation for underestimating task
durations and costs
Time Estimation—making time
for creativity: SLACK
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Keep in mind that customers unintentionally
put projects under extraordinary schedule
pressure—more for less
A consideration in schedule development is
to take the tasks requiring creativity and
place them on ____?!?
Needed: A Rule-based Expert
System for adjusting individual
task durations
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IF ESTIMATER IS SEASONED
(EXPERIENCED) AND IF THE WORK
PACKAGE REQUIRES CREATIVITY ON THE
PART OF THE ESTIMATOR, THEN LEAVE
ESTIMATE AS IS.
IF ESTIMATER IS NOT SEASONED AND
ESTIMATE APPEARS TO BE OPTIMISTIC,
THEN INCREASE ESTIMATE BY 30%.
ANOTHER AI RULE
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IF ESTIMATOR IS SEASONED AND
ESTIMATOR ASSERTS 90% OR ABOVE
CONFIDENCE HE WILL COMPLETE
WORK WITHIN HIS ESTIMATE AND IF
WORK PACKAGE DOES NOT REQUIRE
SIGNIFICANT CREATIVITY, REDUCE
ESTIMATE BY 40% -- 50%
Time Estimation
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What are the three approaches to time
estimation??
– Expert judgment
– History database
– Computer model or formula
Project Cost Management Processes
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Plan Cost Management
Estimate Costs: developing an estimate of
the costs and resources needed to complete
a project
Determine Budget: allocating the overall cost
estimate to individual work items to establish a
baseline for measuring performance
Control Costs: controlling changes to the project
budget
Cost Estimating
We need to speak the language and
understand the terminology:
ROI, IRR, NPV, Sunk costs
Tangible and intangible costs
Direct and indirect costs
Learning curve theory
Reserves ($ included in a cost estimate to
mitigate cost risk; also called contingency
reserves)
Cost Estimating
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An important output of project cost
management is a cost estimate
There are several types of cost estimates
and tools and techniques to help create them
It is also important to develop a cost
management plan that describes how cost
variances will be managed on the project
Proposal Pricing Strategies-Kerzner
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Type I Acquisition: One of a kind project
with little or no follow-on opportunity
» win the project, perform well and make a profit
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Type II Acquisition: New Program with
potential for large follow-on business or
representing a desired surge into a new
market
» win the project, perform well and gain a foothold in
a new market segment, usually at a loss
Table 6-2. Three Types of Cost
Estimates
Type of Estimate
When Done
Why Done
How Accurate
Rough Order of
Magnitude (ROM)
WAG
SWAG
Budgetary
Very early in the
project life cycle,
often 5-7 years before
project completion
Early, 2 years out
Provides rough
ballpark of cost for
selection decisions
–25%, +75%
Puts dollars in the
budget plans
–10%, +25%
Definitive
Less than 1 year out
Provides details for
purchases, estimate
actual costs
–5%, +10%
Overhead Rates
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Program/project costs involve both direct labor
and indirect (OVERHEAD) costs
Each team member should understand overhead
rates
If overhead rates are more than 50% of direct
regular time and not chargeable to overtime, then
overtime at 150% regular time may be cheaper
Overhead rates in manufacturing can be 300-450%
Elements of Overhead Rates (Indirect
Costs – up to 90% of total costs)
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Building maintenance
Building rent
Cafeteria
Clerical
Consulting
Corporate Salaries
Depreciation of equip.
Executive Salaries
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Group Health insurance
Holidays
Moving/storage exp.
Personnel recruitment
Retirement plans
Sick leave
Telephone/Utilities
Vacation
Why are Overhead Rates of Interest to
Project Management???
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These rates must be included in any project
cost calculation!!!
The contractor is going to pay both your
direct and your indirect overhead costs if
yours is the winning bid
Where do the costs associated with bidding
and proposing go? Does anybody pay for
them or are they just a SUNK cost???
Estimation in General—COST or
TIME
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History data base
Expert judgement
a model like COCOMO
Cost Estimation Tools and Techniques
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4 basic tools and techniques for cost estimates:
– Analogous or top-down: use the actual cost of a previous,
similar project as the basis for the new estimate
– Bottom-up: estimate individual work items and sum them
to get a total estimate, as is done with the WBS
– Parametric: use project characteristics in a mathematical
model to estimate costs
– Computerized tools: use spreadsheets, project
management software, or other software to help estimate
costs
Constructive Cost Model
(COCOMO)
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Barry Boehm helped develop the COCOMO
models for estimating software development
costs
Parameters include source lines of code or
function points
COCOMO II is a computerized model
available on the web
Boehm suggests that only parametric models
do not suffer from the limits of human
decision-making
Factors Impacting COCOMO Cost
Cost Realism
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A term widely used in the IT project
management real
Not an exact prediction
Cost realism is about the system of logic,
the assumptions about the future, and the
reasonableness of the historical basis
The more preliminary and less studied the
estimate, the more It should over-state the
actual cost
Let’s REVIEW: What are the
Major Cost Components?
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Salary structure
Overhead structure (Indirect labor costs)
– 50% at TTU
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Direct Labor hours required times average
hourly rate
Cost of materials and support
Cost of Materials??
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Required Software
Diet coke, pizza
Stop here—will not test
you on anything else
STOP!!!
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Stop
Stop
Stop
Stop
Stop
Stops
Lefkon’s Methodology
Divide the software project into as many individual
steps/tasks/modules as possible.
2. Predict the level of effort required to complete each task and
multiply that prediction by 2.
3. Add up the numbers and multiply by 2.0 again to account for
testing and debugging.
4. Take the total and multiply by 1.25 to account for meetings,
administration, and paperwork.
5. Multiply this level of effort by your company’s “magic number”
for labor costs.
1.
Lefkon’s Methodology
6. Present this to management as a range. Take the
cost as predicted above and present the range as –
10 percent and +25 percent.
7. Stand your ground and remind management that you
did not arbitrarily come up with these numbers and
they cannot be adjusted arbitrarily. You may have to
suggest reducing scope and cost if management
does not agree with your estimate.
8. Revise your project budget as you undertake and
complete the project.
Typical Problems with IT Cost
Estimates
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Developing an estimate for a large software project is a
complex task requiring a significant amount of effort.
Remember that estimates are done at various stages of the
project
Many people doing estimates have little experience doing
them. Try to provide training and mentoring.
IT People have a bias toward underestimation. Review
estimates and ask important questions to make sure
estimates are not biased
Management wants a number for a bid, not a real estimate.
Project managers must negotiate with project sponsors to
create realistic cost estimates
Table 6-3. Business Systems Replacement
Project
Cost
Estimate
Overview
Category
Description
Objective
Scope
Assumptions
Install a suite of packaged financial applications
software which will enable more timely
information for management decision-making,
easier access to data by the ultimate end user, and
allow for cost savings through productivity
improvements throughout the company.
The core financial systems will be replaced by
Oracle financial applications. These systems
include:
 General Ledger
 Fixed Assets
 Ops Report [AU: spell out Ops]
 Accounts Payable
 Accounts Receivable
 Project Accounting
 Project Management
Oracle's software provides

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Cost/Benefit Analysis
& Internal Rate of Return (IRR)
Minimal customization
No change in procurement systems during
accounts payable implementation
BSR was broken down into a three-year cash
outlay without depreciation. Costs are
represented in thousands. Capital and expenses
are combined in this example.
Table 6-4. Business Systems Replacement
Project Cash Flow Analysis
Costs
Oracle/PM Software
(List Price)
60% Discount
Oracle Credits
Net Cash for Software
Software Maintenance
Hardware & Maintenance
Consulting &Training
Tax & Acquisition
Total Purchased Costs
Information Services &
Technology (IS&T)
Finance/Other Staff
Total Costs
FY95
FY96
FY97
($000)
($000)
($000)
992
8 Year Internal
Rate of Return
Future Annual
Costs/Savings
($000)
0
1492
0
250
270
0
50
570
0
(595)
(397)
0
0
0
205
0
205
500
0
500
90
270
320
150
1330
1850
250
270
0
80
600
1200
(595)
(397)
500
340
540
525
230
2135
3550
200
905
990
4170
580
2380
1770
7455
570
(101)
(160)
(88)
0
(349)
(483)
(1160)
(384)
(25)
(2052)
(584)
(1320)
(472)
(25)
(2401)
(597)
(2320)
(800)
(103)
(3820)
3821
328
5054
(3250)
Savings
Mainframe
Finance/Asset/PM
IS&T Support/Data Entry
Interest
Total Savings
Net Cost (Savings)
500
3 Year
Total
($000)
905
35%
Cost Budgeting
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Cost budget involves allocating the project
cost estimate to individual work items and
providing a cost baseline
For example, in the Business Systems
Replacement project, there was a total
purchased costs estimate for FY97 of
$600,000 and another $1.2 million for
Information Services and Technology
These amounts were allocated to appropriate
budgets as shown in Table 6-5
Table 6-5. Business Systems Replacement Project
Budget Estimates for FY97 and Explanations
Budget Category
Headcount (FTE)
Compensation
Consultant/Purchased
Services
Estimated Costs
13
$1,008,500
$424,500
Travel
$25,000
Depreciation
$91,000
Rents/Leases
$98,000
Other Supplies
and Expenses
Total Costs
$153,000
$1,800,000
Explanation
Included are 9 programmer/analysts, 2
database analysts, 2 infrastructure
technicians.
Calculated by employee change notices
(ECNs) and assumed a 4% pay increase in
June. Overload support was planned at
$10,000.
Expected consulting needs in support of the
Project Accounting and Cascade
implementation efforts; maintenance
expenses associated with the HewlettPackard (HP) computing platforms;
maintenance expenses associated with the
software purchased in support of the BSR
project.
Incidental travel expenses incurred in
support of the BSR project, most associated
with attendance of user conferences and
off-site training.
Included is the per head share of
workstation depreciation, the Cascade HP
platform depreciation, and the depreciation
expense associated with capitalized
software purchases.
Expenses associated with the Mach1
computing platforms.
Incidental expenses associated with things
such as training, reward and recognition,
long distance phone charges, miscellaneous
office supplies.
Designing the Baseline
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One of the most crucial inputs to the pricing
decision
Baseline design should be started early so its cost
estimates can be included in the proposal
Effective pricing should begin a long time before
proposal development
– Gives management an opportunity to terminate a bid
initiative before too many resources get committed to
proposal development, presentations, negotiations, etc..
Pricing Process
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This activity schedules the development of
the work breakdown structure and provides
management with two of the three
operational tools necessary for the control
of a system or project
The third tool is the WBS
The WBS as price estimating tool
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Provides the basis for effective and open
communication between functional
management and program/project
management
After pricing is complete the WBS forms
the basis of a communications tool by
documenting the performance agreed on in
the pricing effort.
Organizational Input
Requirements
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After the WBS and activity schedules are
established, an organizational meeting is called.
– The WBS is described in depth
– Responsibilities are clarified
– Costing information is solicited and collected from the
responsible parties
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A short time fuse is usually involved in
estimating/pricing which makes it all the more
risky
– RFP’s sometimes require a response within 30 days of
their submittal
Labor Distributions
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Functional units supply their input in the form of
man-hours
» See Figure 14-2
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Man-hours submitted are often over-estimated
Man-hours are converted to dollars by multiplying
by the labor rates
Rates are only averages
Base rates are then escalated as a % factor, based
on past experience
Labor Distributions--Conflict
Resolution
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The reduction of man-hours is often the
source of heated discussions between
project and functional management
Most common solution rests with the
project or program manager
This becomes the usual turf-fight
How would you resolve all such
conflicts???
A Proposal Manager
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Integrates the activities of the program and
functional managers
Insures that a robust proposal gets
submitted to the REQUESTER on time
Overhead Rates
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Program/project costs involve both direct labor
and indirect (OVERHEAD) costs
Each team member should understand overhead
rates
If overhead rates are more than 50% of direct
regular time and not chargeable to overtime, then
overtime at 150% regular time may be cheaper
Overhead rates in manufacturing can be 300-450%
Elements of Overhead Rates
(Indirect Costs)
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Building maintenance
Building rent
Cafeteria
Clerical
Consulting
Corporate Salaries
Depreciation of equip.
Executive Salaries
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Group insurance
Holidays
Moving/storage exp.
Personnel recruitment
Retirement plans
Sick leave
Telephone/Utilities
Vacation
Why are Overhead Rates of Interest to
Project Management???
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These rates must be included in any project
cost calculation!!!
The contractor is going to pay both your
direct and your indirect overhead costs if
yours is the winning bid
Where do the costs associated with bidding
and proposing go? Does anybody pay for
them or are they just a SUNK cost???
Let’s REVIEW: What are the
Major Cost Components?
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Salary structure
Overhead structure
Labor hours required
Cost of materials and support
Cost of Materials??
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Required Software
Diet coke, pizza
Materials Support Costs
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Are submitted by month for each month of
the project
An escalation factor for material costs must
be applied
Pricing out the Work—STEPS
(from Kerzner, p. 738)
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Provide a complete definition of the work
requirements
Establish a logic network with checkpoints
Develop the work breakdown structure
Price out the WBS
Pricing out the Work--STEPS,
Cont’d
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Review WBS costs with each functional
manager
Decide on the basic course of action
Establish reasonable costs for each WBS
element
Review the base case costs with upper-level
management
Pricing out the Work--STEPS,
Cont’d
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Negotiate with functional managers for
qualified personnel
Develop the linear responsibility chart
Develop the final detailed and PERT/CPM
schedules
Establish pricing cost summary reports
Document the result in a project plan
Smoothing out Department Manhours
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Ramp-up at project initiation and Ramp-down at
project completion cause step functions in
manpower requirements, as shown in Figure 14-8
Functional managers attempt to SMOOTH this out
QUESTION?? Does the department have
sufficient resources to fulfill the requirements?
Smoothing out Department Manhours
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ANOTHER QUESTION?? Can the
departments ramp-up fast enough?
The Pricing Review Procedure
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Based on Kerzner’s work
Remember only 30 days to get the proposal
out and this is one of 13 steps
Many contractors require the actual team
members to be identified in the proposal
What solution comes to mind?
Systems Pricing
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The project pricing model (also called the
strategic planning model) acts as a
management information system
Also provides management with an
invaluable tool for performing perturbation
analysis on the base case costs
Developing the
Supporting/Backup Costs
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Some proposals require backup support
When required backup support must be
included in the pricing
An issue is the type of contract
Types of contracts
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Fixed-price (developer assumes all of the
risk)
Cost-plus (contractor pays for every hour
invested and thus assumes all the risk)
An infinite array in between these
The Low-Bidder Dilemma
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The price of your contract will definitely
affect the viability of your proposal
A low price on cost-plus type proposals is
suspect
A low price on fixed-price contracts may be
perceived as impossible and undoable, or if
accepted will lead to a disaster
The Price on the Proposal is
always relative to:
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the competitive prices
the customer budget
the bidder’s cost estimate
IN ANY CASE, LOW PRICING
WITHOUT MARKET INFORMATION IS
MEANINGLESS
If its a new market for the
Developer:
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Cost sharing may be an effective strategy
Bidding below your actual costs is
commonplace
Contractor’s objectives might include
system life cycle cost or unit production
cost
The Bottom Line on Price
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THE LOWEST BIDDER IS NOT
NECESSARILY THE AUTOMATIC WINNER
– Makes project a risky image regarding cost,
performance or schedule
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The ability to perform under contract is a definite
consideration
A compliant, technically and managerially sound
proposal based on past experience, with realistic,
well-documented cost figures, is often chosen over
the lowest bidder
Special Problems
• Pricing must include an understanding of cost control-how costs are billed back to the project
• There are three situations:
– Work is priced out at the department average, and all
work performed is charged to the project at the
department average, regardless of who performed the
work
– Work is priced out at the dept.. average, but all work
performed is billed back to the project at the actual
salary of the employees who performed the work
– Work is priced out at the actual salary of those
employees who will perform the work, and the cost is
billed back the same way.
» This is the ideal situation
This is as far as we will go with
these slides—ignore the
remainder
Estimating Pitfalls
• The “buy-in” decision is the most serious pitfall
because it means that the project will be underfunded
• If the customer initially defines the requirements
and you (the developer) further refine them and
the customer doesn’t understand what you’ve
done, whose fault is it?
Estimating High-Risk Projects
• Validity of historical estimates determine the
difference between high-risk and low-risk
projects
• Estimating high-risk projects is commonly done
by means of the rolling wave or moving window
approach
– For a 12-month project the first six months are
estimated to level 5, while the last six months are
estimated to level two only.
– As the project proceeds more and more of the last six
months is estimated to level 5
– See Figure 14-13, Kerzner
Project Risks
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RISKS--Factors that increase the
probability that the project’s goals of time,
cost and performance will not be met
• See Figures 14-14, 14-15 and Table 14-13
(Especially useful)
Common Risks include:
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Poorly defined requirements
Lack of qualified resources
Lack of management support
Poor estimating
Inexperienced project manager
Tools to Aid in Risk
Identification
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Decision Support Systems
Expected value measures
Trend analysis/projection
Independent reviews and audits
Six steps to risk management are:
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Identification of the risk
Quantification of the risk
Prioritizing the risk
Developing a strategy for managing the risk
– A contingency plan
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Project sponsor/executive review
Taking action
The Disaster of Applying the 10
% Solution to Project Estimates
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10% is taken from every on-going project to create
a budget out of thin air
The result is havoc on top of chaos
Most high-level executive committees do not
realize the impact of adopting the 10% solution
A REDUCTION IN BUDGET MUST BE
ACCOMPANIED BY A TRADEOFF IN TIME
OR PERFORMANCE
The Disaster of the 10%
Solution, Cont’d
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90% of the budget generates 10% of the
desired service or performance levels and
the remaining 10% will generate the last
90% of the desired service or performance
If there is FAT, i.e., padding, it may,
however, be possible to sustain a cut in the
project budget without major consequence
– Most projects do not have FAT
Cost vs. Performance
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I much prefer the word performance to
quality here
A 10% reduction in cost can be expected to
produce much greater than a 10% reduction
in performance
More on the 10% Solution
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10% reduction solutions should be
undertaken only after a careful impact study
has been completed
A far better choice is for the executive
committee to cancel or de-scope some
projects in order to release funds
14.19 Life-Cycle Costing (LCC)
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These are the total costs to the organization
for the ownership and acquisition of a
product over its full life
Especially appropriate for in-house software
development projects, but is used in some
(outhouse) contracted projects as well
Life-cycle cost breakdown
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R & D Costs (Definition, Analysis)
Production cost (Design)
Construction cost (Programming and
testing)
Operation and maintenance cost
Product retirement cost
Life-cycle costing process
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Define the problem
Define the requirements of the cost model
being used
Collect historical data-cost relationships
Develop estimates and test results
Successful applications of LCC
will:
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Provide downstream resource impact
visibility
Provide life-cycle cost management
Influence R&D decision making
Support downstream strategic budgeting
Estimating Methods for LCC
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Method choice is based on the problem context,
operational considerations, etc.
Informal estimating methods
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Judgment based on experience
Analogy
SWAG method, ROM method
Rule-of-thumb method
Formal estimating methods
– Detailed (from industrial engineering standards)
– Parametric
Figure 14-18
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For every $12 DOD puts into R&D, $28 are
needed downstream for production and $60
for operation and support
After Conceptual definition and
demonstration/validation, 85% of the
lifecycle decisions are made and cost
reduction opportunities are down to 22%
14.20 Logistics Support
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A frequent occurrence in software development
where the developer is paid to provide aftermarket support in the form of operation and
maintenance on the product (deliverable)
Recall that after the design phase 85% of the
deliverable’s life-cycle cost has been committed
and the majority of the total life-cycle cost is still
ahead >> 60%
Performance metrics for Products
requiring Logistics Support
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Suppportability--the ability to maintain or
acquire the necessary human resources to
support the system
Readiness--measure of how good we are at
keeping the product performing as planned
and how quickly we can make repairs
during a shutdown
Ten elements of logistics support
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Maintenance planning
Manpower and
personnel
Supply support
Support equipment
Technical data
See page 765
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Training and
training support
Computer resources
support
Facilities
Packaging,
handling, storage
and transportation
Design interface
Estimating -l
An iterative process
– Definition, Analysis, Design
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After Definition, 50-100% off
After Analysis, 25-50% off
After Medium level design--within 10%
A good WBS is absolutely essential to do
estimating
Estimating Techniques
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Professional Judgment
Developer estimate
History (database)
Formulas
Use of Professional Judgment
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Based on WBS, an expert judgment
estimate is made for each work package
Amazingly accurate when experts are
available
Often, however experts aren’t available
Developer Estimate
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The programmer assigned to the work
package will make every effort to complete
the task in the time he estimated it would
take
Use of History Database
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For this to work, your firm must keep a
history database
The database should record how long each
task took and who did the task
Break new projects up into tasks that have a
history database
8 to 1 productivity ratio between best to
worst professional
Questions, Cont’d
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How much of the total time does Brooks devote to
Definition, Analysis and Design?
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How much time to coding?
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1/6 to Coding
How much time to testing?
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1/3
1/4 to component test and early system test
1/4 to total system test
So how much time are you going to devote to
testing in your projects?????
Use of Formulas
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COCOMO--project cost, effort, schedule,
staffing for each of the phases:
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Preliminary design
Detailed design
Code and unit test
System test
COCOMO was developed by Barry Boehm
in 1981--COnstructive COst MOdel
Inputs to COCOMO
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Monthly cost of staff involved
Factors indicating the general level of
complexity of the software
Programming practices and tools used
Experience of staff
Lines of LOSC--rendering COCOMO
unusable
Function Points
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A user input
User display
Peripheral I/O
Restructuring data
Condition checking
Calculation
Branching
Function point approach-BEFORE YOU LEAP
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Vendor is Gordon Group
It must know how many LOSC are required
for each function point.
It calculates LOSC based on function points
it knows about and feeds this into the
COCOMO algorithm
Estimacs from CA (Computer
Associates)
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Can take into account modern code
generation tools
Determines effort, but also
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Hardware required
financial break-even analysis
risk analysis
maintenance costs
Expensive > $20K
Estimating Programming:
Function Points
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D = C * ( G + J)
D is the task duration in person-days
C is the complexity of the task
G is the assigned persons’ general
experience
J is the assigned professional’s job
knowledge factor
Complexity
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Must break task down into its smallest
possible repeatable functions
Then add up the complexity of each
function
User input, user display, peripheral I/O,
restructuring data, condition checking,
calculation, etc.
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Repeatable functions are called function points.
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Function points are graded as SIMPLE, COMPLEX and VERY
COMPLEX
Productivity
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Your average programmer gets a
productivity factor of 1 for G
Slower programmers get factors > 1
Faster programmers get factors < 1
Formula method conclusions
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Will work if you develop accurate factors
Can be used for any task from building a
house to developing software
Depends on how well you granularize
Estimating The Analysis Phase
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Interviews
Analyze Existing Documents and Systems
Prepare Functional Specification
Presentation
RATIOS
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PHASE
PERCENTAGE
Definition phase -- 10%
Analysis phase -- 20%
Design phase -- 10%
Programming -- 20%
System test
-- 17%
Acceptance
-- 7%
Operation
-- 16%
This breaks down to:
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PLAN -- 40%
BUILD -- 20%
TEST -- 40%
Another Rule of Thumb
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The time to design, document and code a
module =
equals the time to debug it
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According to Gildersleeve
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Can you use RATIOS for
Forecasting?
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Suppose you found that it took 20 days to
do definition.
How long, based on ratios will it take to do
the project?
Estimating Rules
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Never use inexperienced persons to estimate
Get group estimates if possible
Never force an estimate on a programmer
Never take an average of different estimates
Granularize down to one week or less
Always add for contingency
Always quote a range when giving estimates
Conclusions to Estimating
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Our weakest talent
Estimating is iterative
Estimating is still an art
Scheduling -l
Also assists with estimating, especially
when PM software is used
PM software supports
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WBS
Gantt
PERT
Calendar(s)
Resources and their assignments
PERT
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Use activity on node approach
– doesn’t require dummy activities
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Understand what float is--it is slack
Critical path is the longest path
shows precedent activities, relationships
doesn’t show what will be done when, by
whom
Resource allocation
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Assign tasks to individuals whose skill level
suits the task
Assign similar tasks to the same person
Assign time-critical tasks to your most
reliable people
Assign tasks that communicate to the same
individual to minimize people’s interaction
Don’t assign too many different tasks to any
one individual
Reducing task duration by adding
manpower
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Add 20% direct time for each additional
member on a professional team
If it takes 10 person days for one person, it
will take 12 person days for two people,
14.4 person days for three people, etc.
Cost effects of adding resources
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More resources, gets the project done
sooner, USUALLY
But it also costs more
The PM must come up with the best
balance, depending on the priorities set by
management or the user
Shortening the duration of
projects
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Fast tracking
Crashing
– Adding resources to the critical path
– Allowing your current CP teams members to
work overtime
Crashing projects
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Crash tasks on the critical path only, only as
long as no other path becomes critical
If other paths become critical, the analyst
must crash those as well
Gantt Chart
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a time bar chart
Invented by Henry Gantt in 1910
Determine the units of time
Mark all known calendar events at bottom
Schedule each activity from PERT
Use three sets of Gantt’s
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one for yourself alone, with all float and
contingency visible
second for the individuals involved--their
resource Gantt, contingencies hidden
third for distribution to upper management-contingencies hidden
Include a 10% contingency into all
estimates
Conclusions to Scheduling
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Use PM software--worth every penny
Do at least one PERT and one GANTT
manually, just to get a feel for the process
Recitation
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What is the probability of completing a project by
its estimated completion time??
What is the formula for calculating the completion
time for a PERT network?
What is the formula for calculating the standard
deviation of the completion time for a PERT
network?
Name some processes that are part of project
integration management