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Eating the Elephant

By Joe BauerFebruary 24, 2021

As a company, we are well accustomed to working with folks on a wide range of challenges.  Last week alone, I supported customers on programs such as submarines, hypersonic air vehicles, fighter aircraft software upgrades, robotic arms for space vehicles, advanced commercial aircraft propulsion concepts, and some good old-fashioned data analysis / CER building.  Each program was for a different customer with different objectives, timelines, constraints, et cetera.

Each of these estimating efforts is inherently unique.  However, on some level, there is much commonality to the problem-solving approach.  We need to make sure we understand the challenge(s), which includes where we are now and where we need to be.  Then, we have to determine how to get from where we are now to our desired future state.  Once we have our list of actions to take, we need a sense of how to allocate our most limited resource (time) across that list.

Perhaps the greatest investment of time early on in a program involves scoping the effort.  What is included?  What is excluded?  There will no doubt be gray areas and scope creep as the effort unfolds.  If we understand what we are solving for, we will be in a much better position to build a solid plan and avoid missing, underestimating, or double counting any specific cost element.

Once we know our “to be” state, we need to understand where we are now.  The delta between the two tells us where our gaps are.  Our cost estimating plan becomes the bridge to get from the current situation to the desired end state.  Plans must be focused and comprehensive yet flexible.  Don’t be dismayed if your plan is upturned occasionally; adapt to the changes and carry on.

Prioritization helps us focus on the right task at the right time.  In estimating a particular cost element, we want to make sure we tackle the most sensitive cost drivers.  With enough time and data, we may eventually get to the second or third-tier inputs, but only after solidifying the most important aspects.  Which cost elements matter the most?  The magnitude of cost isn’t always the most important factor!

In fast-moving programs, the general steps mentioned above can be fluid, occur somewhat simultaneously, and be ever-changing.  Throughout this year, you will see a series of blogs focusing on how to walk through this process with particular attention to the inputs in a relatively basic TruePlanning® project.  We will describe individual cost drivers, discuss how to obtain data, and show how the inputs affect the estimate in our Model-based Cost Engineering™ environment.  Keep an eye out for the blog series titled “What Does This Button Do?”. And if you have a particular input you want to be highlighted, send me a note at joe.bauer2@pricesystems.com.