• Predictive Analytics for Improved Cost Management  



Blog



Original Post Date: Tuesday, February 22, 2011 In the February 2011 issue of National Defense, I was struck by the article “Uncertain Path Ahead for Military Truck Fleet”[1]. This article centered on the best strategies for modernization of the aging fleet of Humvees. The recapitalization of 150,000 Army and 25,000 Marine Corps Humvees is creating a “fix or buy new” dilemna for decision makers. According to the article, GAO analyst Michael J. Sullivan should include a “cost-benefit analysis that would minimize the collective acquisition and support costs of the various truck programs, and reduce the risk of overlap or ...
Original Post Date: Thursday, February 17, 2011 My June blog entry suggested the use of parametrics in real-options valuation. This month, I’d like to offer the generalized use of our type of modeling in valuing tangible assets.  Typically, fundamental analysis evaluates the intrinsic value of securities. I won’t attempt to compete with Warren Buffet here. But it is certainly the case that a company, or portfolio of securities reflecting many companies, is based in part on the market value of its product assets and their potential for future earnings, as well as other objective and subjective considerations. In parametric estimation, we take a top-down ...
Original Post Date: Wednesday, January 12, 2011  TruePlanning 2010 SR1 estimation software is now available as an upgrade for existing PRICE customers. The most significant update to this version of TruePlanning is the capability to use both parametric estimating models as well as analogous data to produce estimates. This capability validates and increases the defensibility of estimates. TruePlanning provides a framework that allows content driven parametric models to be estimated in one system. Most notably, hardware, software, IT and Systems of Systems (SoS). No other commercially available estimating tool can make that claim. However, whereas in previous versions estimates relied on ...
Original Post Date: Tuesday, January 11, 2011 Last week I gave a webinar which detailed the PRICE perspective on Should Cost & Will Cost Management. The responses I have received have been very positive and also informing. For those of you who could not attend you can view the recorded version of that webinar here. Below is a brief summation of that presentation and some key takeaways. The Under Secretary of Defense issued a memo late last year. The thrust of the memo was the current need for greater efficiency and productivity in defense spending. His guidance contained 23 principal actions for improving the ...
Original Post Date: Monday, November 15, 2010 Last week I attended the 25th International Forum on COCOMO and Systems/Software Cost Modeling.  I attended for several reasons.  First of all, I was invited to participate on a panel whose topic was “25 years of Software Estimation: Lessons Learned, Challenges and Opportunities”.  Secondly, I have attended in the past and while it’s generally a small group, as such conferences go, I always come away impressed by the fact that so many smart people end up in one room and this year was no different.   But I digress; I really wanted to share ...
Original Post Date: Tuesday, November 2, 2010  After some recent meetings with clients I am sensing some confusion on how to estimate software reuse. I think part of the problem is in the definition of reuse, so let's start with a definition and then address the estimating issue. Software reuse is defined as “the use of existing software, or software knowledge, to build new software.” This definition came from Wikipedia. From a estimating software costs perspective the above definition is part of the problem. The definition should read: "Use of existing software with no changes for operation in the new software program.”  If the existing software is going to be changed, ...
Original Post Date: Thursday, September 23, 2010 You need 3 things for your software estimates to be successful. And I will add a fourth one in after I talk about the first 3. 1. You need qualified and experienced people to generate the estimates. They have to know how to estimate and they have to understand what the problem is that the project is going to solve…..at least well enough to estimate it. This can be one person or many depending on the difficulty of the business area. The harder it is, the better having more brains look at the problem. But not to the point ...
Original Post Date: Tuesday, October 12, 2010 National Boss Day is quickly approaching! While October 16th is the actual day this year it will be observed on Oct 15th since the 16th falls on a Saturday and what boss wants to hear from his or her employees on a day off even to be showered with cards, flowers and accolades.  According to Barry Wood, Boss Day was started in 1958 when Patricia Bays Haroski of Deerfield Ill registered it as a special date with the US Chamber of Congress to honor her boss (who was also her father).  October ...
Original Post Date: Wednesday, October 6, 2010 Over the past several weeks several users have inquired about the best way to model legacy software that is being modified when estimating software costs. The software component within the TruePlanning Software model has an input parameter call “adapted Code Size.” This input parameter accounts for existing or legacy software that will be modified or changed to meet a new requirement. Tied with the size input parameter is Percent Design/Code/Test adapted. Although the model will calculate a percentage for each input, I would recommend that user’s analyze the calculate values and override the calculation where required. The percentage ...
Original Post Date: Wednesday, October 6, 2010 The key cost driver when estimating software costs is the size of the product. The problem is that there is no perfect technique available to measure and quantify the size of software. The two major techniques in use today are Source Lines of Code and Function Points.  Today we will talk about Source Lines or Code or SLOC. Source Lines of Code measures logical lines of code. It takes some of the uncertainty out of physical line of code measures by counting only complete statements (which can cross over more than on physical line). SLOC excludes comments and blank ...