• Predictive Analytics for Improved Cost Management  



Blog



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 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 In Government contracting all contracts are made up of a network of suppliers. The Prime contractor who won the overall bid usually has a supply chain of vendors from whom they receive their products and services. In addition they have Subcontractors who provide services under a contracted agreement of work. These vendors and subcontractors most likely have their own network of suppliers which allows for a cost-effective supply chain that extends across America and to other nations. Vendors sell identical or similar products to different customers as part of their regular operations. These ...
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 ...
Original Post Date: Wednesday, September 25, 2013 Introduction/Problem Statement A current client has expressed interest in the default values on the simple vs. the detailed input sheet. More specifically the question arose because this particular customer as well as others had a misconception about the simple vs. the detailed input sheet default values. Most users did not realize that if they were only inputting values on the simple input sheet that the detailed input sheet default values were still be used in the calculation for their cost estimate. So the question became how much are each of these default value inputs ...
Original Post Date: Wednesday, September 25, 2013 What follows is PRICE's interpretation of how to model FPGA’s and ASICs inside our current version of TruePlanning® 2012 SR2 and older versions. ASICs are an application-specific integrated circuit, customized for a particular use. FPGAs are Field-programmable gate arrays and are considered the modern-day technology that can be used in many different applications because of the programmable logical blocks. In industry ASICs has grown from 5,000 gates to over 100 million. Designers of digital ASICs use a VHDL language for the functionality.   Estimating Best Practice for TruePlanning: Model your electronics at the board level ...
Original Post Date: Wednesday, September 25, 2013 Last November I hosted a webinar that discussed the use of the companion applications Live! This session helped to further explain how to use them in congruence with TP, the history, & why we created them, etc. During the presentation I showcased the success’s I have encountered with using them both in the recent AOA I described in part 2 and this blog part 3. You can find the recorded webinar on our site. In addition I described as I am going to do here the differences between the large project engine and the excel ...
Original Post Date: Wednesday, October 17, 2012 PRICE was recently tasked by a client to provide an Analysis of Alternatives (AOA). As we assembled a team to complete this, I was tasked with modeling all the alternatives inside TruePlanning.  After the initial data call, we realized that this project would be cumbersome due to the large amount of data. While developing the project plan, I had to think of a crafty way to get data in and out of TruePlanning efficiently. It was interesting to note how much capability I could utilize from the TruePlanning Companion Applications to effectively support ...
Original Post date: Wednesday, October 10, 2012 Deciding whether Excel® is a friend or foe is a hefty topic, so I decided to dedicate several blog posts to the issue!  This first posts addresses all of PRICE’s new boundless Companion Applications.  The second will address my experience using the applications with our customers (Do’s and Don’ts); and lastly, the third and final blog will wrap it up and explain a more in-depth large project engine that PRICE is currently testing.  As we all know Microsoft Excel® is a powerhouse tool.  It allows you to house data, format it in many ...
Original Post Date: Wednesday, May 18, 2011  Parametrics is more than estimating. It represents the complete process of capturing and utilizing (often with calibration) non-cost drivers, as well as associated programattics and configuration levels. The Wiki definition of systems engineering immediately speaks to project complexity, life cycle management, and logistics. Any question that parametrics and systems engineering are interrelated?  In many of our customer organizations, affordability and cost-benefit analyses have migrated to system engineering functions. How and where does your organization perform these analyses?  As we enhance our capabilities and applications, it’s beneficial for all concerned to understand your adaptation of parametrics within the core ...
Original Post Date: Thursday, April 7, 2011 The following is a collection of some of the more common installation issues.  If you have additional questions, concerns, or issues with any upgrade or installation, please call our Technical Support line anytime at:  1-800-43-PRICE. Default Password Override TP’s default password may not be strong enough based on your security policy.  Please review your specific requirements for passwords and follow the directions below to change the default:  When you get to the screen, uncheck the “Use Default Password” and enter a valid password based upon your specific security settings.  Then click next and continue the ...
Original Post Date: Tuesday, March 29, 2011 Competition seems like a sensible practice on the path to best value.  However, is it possible to create a truly competitive environment? “It is a tradition that we don’t trust our business partners, people don’t have a clear understanding of how sharing information would result in better performance.  The lack of understanding induces fear and skepticism.” Hau Lee, Graduate School of Business at Stanford University There are two behaviors that debunk competition in regards to complex systems wrought with uncertainty: over-optimism and deception.  Government buyers share the dual burden of seeking advanced technologies to meet future ...
Original Post Date: Tuesday, March 29, 2011 “I think we have an obligation to work with industry to ensure that our suppliers do not just remain world class in defence, but aspire to be world-class manufactures that can withstand comparison to other industries.” Chief of Defence Procurement, Sir Robert Walmsley Is this a practical proposition or is it a pipe dream?  The following excerpt from Dale Shermon’s Systems Cost Engineering attempts to make the case that this type of comparison is possible. Many of the statements in proposals and marketing literature stating the superiority of a company are anecdotal or at best qualitative ...
Original Post Date: Tuesday, March 29, 2011 MCR and PRICE Systems are proud to sponsor the upcoming Estimating & Analysis Best Practice Workshop at the Marriott Manhattan Beach on April 27th from 7:30 am to 2:30 pm. This FREE workshop features government and industry speakers discussing how the current fiscal environment impacts the day-to-day estimating challenges faced by government program offices and their commercial counterparts.  These events seek to bring leaders together to share ideas and experiences about their most pressing issues. We are looking to professionals, such as you to contribute ideas and best practices.  For more information or to ...
Original Post Date: Wednesday, March 16, 2011 True Planning results have many options, including viewing Costs by Activity. While simple, this view can be quite powerful, especially when exported for re-organization manipulation.  In a recent exercise, the WBS mapping of common objects, estimated by separate multiple scenarios, presented a non-trivial chore in Excel. “Transposition” features work fine for matrices, as do pivot tables. But how does one map object by activity grids into activity lists, similar to MIL-STD 881a, with singular “roll up” instances of all nonzero object costs?  The secret is in how True Planning appends each activity output with the [object] tag. Once exported ...
Original Post Date: Wednesday, March 16, 2011 ...wear the worst shoes. The cobbler was a master at his craft; he was just too tired to practice it when he got home from the shop.  Sound familiar? A disciplined approach to understanding (functional) requirements as well as analogous projects (with actuals) is our not-so-secret sauce. Why run the risk of creeping back up our career learning curve? There’s already enough scope creep to keep us busy. Plus, for you management types charged with prospecting, a consistent approach towards estimation is a great way to connect with people who've felt the pain of being the cobbler's kids. I recently reconnected ...
Original Post Date: Wednesday, March 16, 2011 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 math check-sums.   A round table peer ...
Original Post Date: Wednesday, March 16, 2011 I’m not a golfer. But we’ve all heard one say “that’s why I play” after hitting a shot and feeling like it all came together. What “it” is, in terms of mechanics and timing, I’m not really sure.  In our own world of parametrics, it’s the feeling of adding value in that golden moment of facilitating decisions and forward momentum. We wear many hats: estimating, consulting, systems engineering...even cost accounting.  Building an AoA, ICE or ROM is where rubber-meets-the-road in regards to configurations and assumptions.  Not too long ago I was in a discussion with a number of Subject Matter Experts ...
Original Post Date: Tuesday, March 15, 2011 In my blog last week on Work Breakdown Structures, we reviewed the subtleties of using the [object] tag to your advantage in creating different sorts and roll up subtotals. As a followup, I’d like to drill down a bit on the initial step of using the “copy grid” exports. Each row number is unique, thus creating an identifying key for the vlookup function in Excel. Since all object X activity instances are allocated 100% to one of the three phases (with very rare exception), these row keys allow you to sort and re-group outputs while maintaining ...
Original Post Date: Thursday, March 10, 2011 My previous blog discussed a “Should Cost” methodology used by PRICE Systems to complete an analysis. In the article I included a chart depicting calibration results for manufacturing complexities for each weapon system (X-Axis). Manufacturing complexities are a major cost driver within the model. This parameter can be derived from model knowledge tables, generators or from calibration. Many times the calibrated results are simply averaged and used for predicting cost for the new system. This assumes that the new system is very similar in technology and performance as the systems used for calibration. In general this is not the ...
Original Post Date: Monday, March 7, 2011 Based on your experience, does winning an opportunity in the DoD come down to how well the proposal is written? Or, are there other contributors like the content of the proposal?  The type of analysis described in the proposal?  The estimation methodology?  How well the cost realism is justified? Any insight you have would be great.
Original Post Date: Friday, March 4, 2011 I consistently run into this idea of data driven estimating.  Yet, there is no clear explanation of this concept.  I am not trying to provide one here, however, I am interested in is what is at the root of this growing movement.  My take is that it is an attempt to scratch an itch.  But what’s the itch? I believe it is related to my early post (Accuracy is Risky Business).  In the struggle to answer the accuracy question people have decided that understanding the data used in the estimating process is key ...
Original Post Date: Monday, February 28, 2011 Don't reinvent the wheel.  It's a waste of time and effort.  All too often I see organizations establishing measurement programs or new software estimation intiatives and they want to build everything from the ground up.  Mistake, mistake, mistake... People have gone before you.  Learn from them.  Take their ideas and go forward from there.  In the past year, I have architected the implemention of our software cost estimation tools at two large federal agencies and two DoD programs.  Teaching people how to estimate is easy.  Teaching them how to find the data to develop estimates is ...
Original Post Date: Monday, February 28, 2011 PRICE Systems recently accepted an assignment to complete a "Should Cost" estimate for a U.S. ally on a weapon system. The estimate included not only analysis on production costs, but also should cost on various operations and support costs. The only information provided by the client was quantity and time frame for production. A major ground rule for the estimate was that all data specific to the weapon system must come from publicly available information.  For example, mass, manufacturing process, and learning curve information must come from the public domain.  After reviewing the scope for the estimate, we decided to also ...
Original Post Date: Monday, February 28, 2011 I recently attended the Wharton Aerospace Conference and Federal Networks 2011.  Amid the obligatory discussions about the economic climate and federal budget deficit, an interesting topic bubbled up.  There  was a certain preoccupation with an idea called ‘consumerism.’  According to Webster, consumerism means "...the promotion of the consumer's interests; the theory that an increasing consumption of goods is economically desirable; a preoccupation with and an inclination towards the buying of consumer goods." As is often the case, there is a difference between definition and connotation. The intended meaning of consumerism at these events was the ...
Original Post Date: Friday, February 25, 2011 PRICE Systems is currently developing a COM interface for TruePlanning. I know, I know…  What’s COM you say? COM stands for (Component Object Model) and it's a programmable interface which exposes the TruePlanning estimating brains for integration and analysis!  I know it sounds boring but it’s really cool because it allows anyone, including our users, to build “apps” for TruePlanning similar to the way “apps” are built for the iPhone.  Let me give you some examples of some apps that you can build:  Excel solution, sensitivity analysis,  project comparison, risk simulation, total cost of ...
Original Post Date: Wednesday, February 23, 2011 In the world of estimating, accuracy is the first question out of people’s mouths.  Above all else they want to know the accuracy of an estimate.  How accurate is that approximate judgment?  Craziness! True accuracy can only be determined after the project or effort has been completed and a post-audit analysis reconciles what was expected to happen with what did happen.  This is a very expensive, time consuming process that many preach about but few actually attempt.  In my experience, when people ask about accuracy what they are really interested in is ...