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Lean Six Sigma – Finding ways to avoid costs by using better, more efficient processes

By PRICE® SystemsJuly 20, 2021

Although a cost estimate is not a cost “exactimate”, as my colleague Rich Mabe says, we still want to try to get as close as possible to what an acquisition will cost.  While we certainly are shooting for a good risk-related range, we also need a good point estimate for budgeting purposes.  This practically comes down to a cost estimating relationship (CER) based on the analysis results of hard data, which as we all know may be hard to come by.  In my case, I used the tenets of Lean Six Sigma (LSS) to help me discover what my real problems were in terms of getting the data and analyzing it properly.

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Lean Six Sigma (LSS) is a methodology to improve organizational processes and is geared to finding ways to avoid or save costs by using better, more efficient processes.  The beauty of LSS is that the methods cut across the board.  So, I was able to discover the gaps in my cost estimating processes that ultimately were resulting in a much higher “risk/growth” factor in my software cost estimates. Once I identified my problems, I was able to improve my cost estimating data gathering and analysis processes that eventually led to my being able to significantly reduce the add-ons for risk/growth.

In this webinar, I describe the evolution of implementing this effort and characterize the significant drivers and barriers to include challenges, processes, and internal controls associated with implementation.  I also discuss activities leading to successful implementation (e.g., Tiger Teams, TruePlanning, etc.) and elaborate on a practical approach for other organizations seeking to improve their estimating operations.  I hope you will join me!