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Original Post Date: Monday, December 30, 2013 Unless you live under a rock, you are aware of the healthcare.gov rollout disaster.  While similar IT failures are regularly in the news, the high profile of healthcare.gov has really mainstreamed awareness of the fragility of many IT projects.  Check out this article entitled ‘The Worst IT project disasters of 2013’.  It details IT project failures such as:  IBM’s failure to deliver on a payroll system project that could potentially cost taxpayers up to $1.1 Billion dollars US.    SAP’s failure to deliver satisfactorily on requirements for ...
Original Post Date: Friday, October 4, 2013 In Parametrics is Free, I acknowledged receiving (too late) “you should’ve known to ask that” over the years. Quality control after-the-fact is fine; but it’s better and cheaper to take a systematic approach to quality assurance as part of your estimating process. The sheer volume of what we model can often keep us so close to the details that we are unable to step back and put on our QA hat on for a sanity check. Enter Quality! On a very large project, our team has introduced a few regular cross-checks, notwithstanding typical ...
Original Post Date: Friday, October 4, 2013 Like titanium and other exotic metal-materials, “composites” (by definition, combinations of materials) offer significant weight-savings and reduced part counts, but at a price of high production cost. Sound contrarian to our parametric cost estimating view? Not really. Complexity of manufacture is quite higher. Likewise process index and structural tooling values grow. Plus, design lead times drive developmental cycles. That said, understand that composites represent more than a material type. They can involve a highly labor-intensive approach to preparing, braiding/ winding, molding, bonding and modular assemblage. Yes, some aspects of braiding and molding lend themselves ...
Original Post Date: Friday, October 4, 2013 Parametric modeling is excellent for all aspects of early-concept cost estimation, including go/no-go decisions downstream. So, in the spirit of bringing a transparency to (ethical) financial engineering… why not apply our craft to pricing “real-options”? The latter are essentially strategic opportunities for engaging resources (cost/schedule) into projects, ventures, investments, or even abandonments. The opportunity choice has value itself! Unlike static project Net Present Value (often, but not exclusively, approximated with Discounted Cash Flow) assuming pre-defined decisions, real-options reflect the merit of flexibility. If an R&D or proof-of-concept presents viability/marketability learning, the option has positive ...
Original Post Date: Friday, October 4, 2013 Ahhhh, the 80s… a challenging (but often confusing) time in an evolving computing world. Working in 1985 as a software estimator as well as SQA engineer in a quality assurance department that “audited” real-time projects using new concepts like OOD & OOP… well, you get the picture. It was a great time to get immersed into great work. And the good news: that company’s process as well as its developers were bullish on a young estimation/ quality type asking plenty of questions… as long as they were of the Yes-No variety. And ask ...
Original Post Date: Friday, October 4, 201 My "Real Options Valuation" blog suggested the use of parametrics in real options valuation. 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, ...
Original Post Date: Wednesday, September 25, 2013 The “Systems Folder” cost object which is found at the start of every TruePlanning Project is most often confused with the “Folder” icon. These two however should not be confused. The “Folder” icon does not have an input sheet at all. It is not a cost object and contains no cost estimating logic or relationships.  It is provided as a collection point so that cost objects can be grouped in ways for clarity like to separate out phases of the acquisition lifecycle or to divide costs between subcontractors, etc.  Whereas, the “System Folder” contains all ...
Original Post Date: Wednesday, September 25, 2013 We may all agree that risk analysis is a necessary, vital part of any valid/defensible cost estimate.  We may not agree as much on the best approach to take to quantify risk in an estimate.  All estimates contain risk.  In the words of a wise cost estimator I know, “That’s why they’re called estimates, and not exactimates!”  We must quantify and manage levels of risk.  Why?  One vital part of a successful program is the ability to build a budget based on reliable cost projections.  Reliability increases when we can analyze inherent risk, ...
Original Post Date: Wednesday, September 25, 2013 A lot of clients have been expressing interest in modeling ASICs, FPGAs, and various other electronic modules inside TruePlanning® (TP). In the release of TruePlanning® 2014 there will now be the capability to model all these products inside our framework. Not only will you be able to model these products but you will of course be able to model the integration cost of these electronic components with Hardware and Software components. In addition you would be able to add and estimate the program management of your total project through our integrated framework. TruePlanning Microcircuits ...
Original Post Date: Wednesday, September 25, 2013 “Integration Factors – What Makes TruePlanning™ Stand Out in the Crowd” In today’s world, system integration is becoming more and more important. The government has started asking for designs that have additional capabilities, which allow connectivity both with systems under construction and systems already in use and deployed. The reason systems integration is important is because it adds value to the system by adding abilities that are now possible because of new interactions between subsystems. In a recently posted article on “The True Costs of Integration” the writer defined the costs of a typical integration ...