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Original Post Date: Thursday, April 1, 2010 Recently Dale Shermon of PRICE Systems gave a webinar presentation “Delivering Programs with TOC and CAIV” which looks at the application of parametric cost estimation in the context of determining a delivery strategy.  He then walks through the Cost as an Independent Variable (CAIV) process that is often employed within a Total Ownership Cost (TOC) approach to estimating. Often, once a large defense contract is won by the business development team the program delivery team then has the job of figuring out “Ok, what exactly have we just won and how do we deliver it?” Dale’s presentation does an ...
Orignal Post Date: Thursday, April 1, 2010 Here are some choices to the question: 1. By comparing with old analogous data? 2. Creating and presenting the basis of estimate (BOE) documentation? 3. Illustrating a track back to cost estimating relationships (CERs) and their referenced historical databases? 4. Demonstrate that the estimate came from a reputable parametric tool like TruePlanning? 5.  Any other approach? 6.  All of the above or some combination of these approaches? 7.  You don't have this problem i.e. you never had a need to prove the credibility of your estimates? If the answer is point number 7, ...
Orignal Post Date: Thursday, February 11, 2010 That’s a question that members of the cost estimating community will try to answer at next week’s  43rd Annual DoDCAS symposium. The conference is centered around the “theory and implementation” of the WSARA 2009 (Weapons System Acquisition Reform Act). Simply put, the cost estimating community needs to first and foremost understand what the real life implications of the WSARA will be. At least in theory that is.   According to GAO, nearly 70% of the Pentagon’s 96 biggest weapons programs were over budget in 2008 and another government report found $295 billion in waste ...
Original Post Date: Friday, January 15, 2010 Failed software projects are always bad but there are additional complications when there is a contract in place to deliver the software.  Disputes over failed software can result in costly litigation that generally damages both the vendor and the buyer. According to observations of Capers Jones in "Conflict and Litigation Between Software Clients and Developers" (2007) , 5% of the projects his clients were involved in either had litigation pending or were currently involved in litigation over project failures.  His findings indicate that it is very large projects, over 10,000 Function Points that ...
Original Post Date: Friday, December 18, 2009 The cost estimating community mourns the loss of a true pioneer this week. Our thoughts and prayers are with his family. Frank Freiman has a special place in the history of PRICE Systems as his innovative work is directly responsible for the company’s existence today. This is a classic case of where one man can truly made a difference. Thousands of estimators across the world have benefited and continue to benefit from his accomplishments. Frank began studying the applications of statistical quality control as an officer in the US Army during World War ...
Original Post Date: Monday, November 30, 2009 It seems that business and government today is mired in cost-benefit analysis. The cost side is fairly easy to understand: how much money will the business (or government) have to expend to deliver a given service? Benefits are a little harder to quantify. First, there is the difference between monetary versus non-monetary or social benefits. Some things like the office Christmas Party do not make any money but they keep morale high. Second, there is the difference between short-term and long-term costs and benefits. The company using Blackberries may bring the immediate satisfaction ...
Original Post Date: Wednesday, September 30, 2009 Recently I was interviewed by Doug Beizer of Federal  Computer Weekly for an article about the shift of government agencies away from custom software development and towards the use of cloud computing.  The interest in this topic seemed to stem from the introduction of Apps.gov online store earlier this month.   Having been in the software cost estimation community for more than 25 years, I have experienced this transition first hand but never really stopped to think about the whys and wherefores until questioned by Doug.  It was an interesting stroll down memory lane.  As an example, ...
Original Post Date: Wednesday, September 16, 2009 While most of the books on the topic of parametric modeling take a look at detailed techniques and fundamentals, such as building parent/child relationships or the mathematics behind models, Systems Cost Engineering, takes a more practical perspective to answer a very basic question:  What can parametric estimating do for my organization and how can we implement it?  The book covers an array of business processes that can be dramatically improved with the application of a standardized parametric cost estimating framework. These processes exist across multiple phases of a program's lifecycle such as early concept planning through development and production. Chapters are ...
Original Post Date: Thursday, August 13, 2009 Let’s start with a simple test. Which is greater: the number of six-letter English words that have "n" as the fifth letter or the number of six-letter words ending in "ing"? If you are like most people you’re thinking the correct answer is six-letter words ending in "ing". But most people are wrong. And the reason is simple, people rely on what they can easily recall. Since it’s much easier to think of 6-letter words ending in "ing" the fact that people come to that conclusion isn't surprising. Psychologists refer to this as availability bias. ...
Original Post Date: Tuesday, June 16, 2009  Bad project estimates lower profitability.  Despite this fact many business leaders don’t invest in improving their estimating capability, buying into the fatalistic myth that this is as good as it gets.  This is patently wrong.  Project portfolios are prioritized based on the total expected Return on Investment (ROI) of projects.  Investments in the wrong project based on bad estimates could lead to lost revenue or delay of net benefit. All around us we see reports of software projects which are over budget, delivered late or cancelled because they are taking too much time ...