• Predictive Analytics for Improved Cost Management  



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Original Post Date: Wednesday, September 1, 2010 Because I have enrolled in several on-line fiction writing workshops, I regularly receive newsletters about upcoming events in the world of fiction writing.  Several weeks ago I was quite intrigued when I received an invitation to enter a ‘Hint Fiction’ writing contest.  Here I don’t even know what hint fiction is and someone thinks I might be good enough at it to enter a contest – who knew?    Naturally, I Googled hint fiction (how did we get by without Google?) and found out that it is  “a story of 25 words or ...
Original Post Date: Thursday, August 26, 2010 I  recently moved and thought about the need to do a new household budget. This got me to thinking of the budgeting capability in TruePlanning. First, you can use TruePlanning to determine a budget. The time phased output, either monthly or annually, is ideal for establishing a budget and budget profile for your project.  TruePlanning also splits the time phased costs into development, production, and operating and support categories. Be cautious, however, in using the Phase report. The System cost object costs are assigned by schedule duration, which may not necessarily reflect the actual project cost flow. A better choice may ...
Original Post Date: Friday, August 13, 2010 If you want to read an interesting article on EVM – check out ‘The Three Deadly Sins of EVM’  by Mike Mullaly.  In it he reflects some of my personal feelings about EVM but he does this much more eloquently than ‘it’s a crock’.  OK – while I have actually said that out loud – it’s probably a little too strong.  I do think that EVM may be a good tool to have in the toolbox – it’s just not the project panacea that so many make it out to be.  And it ...
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: 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: Tuesday, June 8, 2010  Now that we know the background on the original concept of TRL's (Technology Readiness Levels - reference Arlene Minkiewicz's earlier blog post), we now want to address estimating costs associated with different TRL levels. It is important to realize that a model cannot estimate TRL costs by simply changing an input parameter. Rather the only way to estimate costs associated with different TRL levels is to model the scenario. For example, if you are estimating costs for TRL level 2 phase the input parameters would be very different than if estimating costs for TRL level ...