• Predictive Analytics for Improved Cost Management  



Blog



Original Post Date: Friday, July 30, 2010 Earlier this week I presented a webinar on the topic of SOA governance – specifically focused on making sure that organizations include SOA governance as they plan to deploy SOA capabilities.  As sometimes happens when I am giving a presentation (especially one I have given before), I was struck with somewhat of an epiphany as I was relaying the material on my slides.  In this case it was not really a new idea about the material, but more a deeper understanding of why this topic really is important. To be honest, when I first ...
Original Post Date: Thursday, July 29, 2010 The following is an extract from a paper written in 1978 from one of the founders of PRICE Systems:  Two questions are often asked by those unfamiliar with TruePlanning’s approach to cost modeling: What is your CER (cost estimating relationship)? And what is your data base? These questions are closely related.  Both are based on the assumption that the PRICE modeling approach is the same as that customarily used in developing cost estimating relationships.  This is not the case.  The customary approach is to first gather as much relevant data as possible, then screen the ...
Original Post Date: Thursday, July 22, 2010 Recently the Director of the Office of Management & Budget (OMB), Peter Orszag issued a directive that was posted on the OMB blog that outlined three specific actions for IT reform. The actions include a freeze on all new IT modernization task orders for financial systems, reviews of current high risk IT projects and require agencies to submit improvement plans to the CIO; thirdly, the OMB Deputy Director will develop recommendations within 120 days to improve the federal government’s overall IT procurement and management practices. Orszag states: “While a productivity boom has transformed private sector ...
Original Post Date: Thursday, July 8, 2010 Which came first the chicken or the egg?  We can look to Darwin for one theory, the Bible for another but at the end of the day – nobody really knows.  There can be no chicken without an egg, nor there be an egg with no chicken.  Thus we are left with a bit of a circuitous conundrum. Joint Confidence Level (JCL), NASA’s current best practice for program planning and management, also presents a circuitous conundrum.  When a program has a JCL of 70% this implies that there is a 70% confidence that ...
Original Post Date: Tuesday, July 6, 2010  Those words describe the triangular probability distribution used by FRISK in performing risk analysis in TruePlanning. FRISK requires two major assumptions on the part of the user. The first is that the combination or convolution of a number of triangular distributions results in a log normal distribution. The second is that there is correlation between cost objects.  The triangular distribution is completely defined by three simple inputs: an optimistic value, a pessimistic value, and a most likely value. By eliciting information from engineers, I have found that they are much more willing to commit to a range ...
Original Post Date: Wednesday, June 23, 2010 I have been working with several clients on data collection and repository creation this spring. One common theme that comes up is what data to collect and how to use it to make intelligent decisions about projects. And that’s the impetus for my little limerick above.  The goal of data collection is wisdom. In the estimation world wisdom means knowing when it’s safe to bet your shirt on this new project you want to initiate. If you keep that perspective in mind it becomes much easier to identify what information you need to make wise decisions and ...
Original Post Date: Tuesday, June 15, 2010  I recently read a great paper by Glenn Buttes and Kent Linton, NASA’s Joint Confidence Level Paradox – A History of Denial.   In it, the authors present a  very detailed analysis of many failed NASA projects along with some compelling theories on why so many projects fail and what can be done going forward.  While I’m not here to summarize their findings – interested parties can hit the link above and learn for themselves, there was one extremely interesting jewel in this paper that I felt the need to share. The reason I ...
Original Post Date: Thursday, June 10, 2010 This week I was thinking how useful the Export Import feature in TruePlanning can be. First, the Excel Import spreadsheet gives you an easy and convenient way to gather your data. In addition, it gives you an easy and convenient way to check and validate the data. When observing the data in a column format, it is so easy to spot and correct anomalies. Second, the Excel Import spreadsheet gives you an easy and convenient way to build your Product Breakdown Structure. No more inserting one cost object at a time. The Excel Import feature does it all ...
Original Post Date: Thursday, May 13, 2010  Earlier this week I conducted a webinar intended to make PRICE users aware of the Cost Research Services available to them as part of the license fee they pay to use PRICE products. I thought I would recap the highlights of this webinar for those of you who might have missed it. At PRICE we understand that cost estimating tools, while useful and valuable, do not always present the complete solution. Every single cost estimation projects presents new and unique challenges.  We think it's important that in addition to solid, time trusted cost estimating models, ...
Original Post Date: Friday, April 30, 2010 I have been frequently asked to do crosschecks on other people’s software cost estimates which are potentially done in a variety of tools from spreadsheets to SLIM. One of the common operator errors I see from other users is not understanding what activities and resources are included in the outputs of the particular tool that they are estimating with. This is akin to deciding between two cars and not knowing if both come with the same sets of features (stereo, AC, heated seats).   With software estimation tools you need to know what work is getting estimated ...