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Original Post Date: Tuesday, June 16, 2009  Bad project estimates lower profitability.  Despite this fact many business leaders don’t invest in improving their estimating capability, buying into the fatalistic myth that this is as good as it gets.  This is patently wrong.  Project portfolios are prioritized based on the total expected Return on Investment (ROI) of projects.  Investments in the wrong project based on bad estimates could lead to lost revenue or delay of net benefit. All around us we see reports of software projects which are over budget, delivered late or cancelled because they are taking too much time ...
Original Post Date: Thursday, April 30, 2009 It's finally Spring!  And along with the leaves on the trees, the beautiful flowers and the happy chirping birds.... it is once again Baseball Season.  Baseball season is a beautiful thing - and not just because, as a resident of South Jersey, my team is the 2008 World Champion Phillies.  I just love the game and everything about it.  I believe this is because with baseball the impossible becomes possible because anything can (and will) happen and with a good plan in place you can still be successful. I didn't always love baseball.  ...
Original Post Date: Tuesday, March 17, 2009 Doing business with the Department of Defense (DOD) requires that you have disciplined company governance in specific areas as noted in the Defense Federal Acquisition Regulations (DFARs). In particular, DFARs 215.811 and 252.215-7003. DFARs 215.811 requires all DOD contractors, large and small, have adequate estimating systems to support their proposals. As part of a regulatory oversight requirement, the Defense Contracts Audit Agency (DCAA) will periodically perform contractor estimating system reviews. If you are a large defense contractor, you can expect your estimating system to be reviewed routinely. Smaller defense contractors can be audited ...
Original Post Date: Monday, March 9, 2009 The US Department of Defense (DOD) continues to be plagued with cost overruns on major weapons systems.  Last month Senators Carl Levin (D-Mich) and John McCain (R-Ariz) introduced the 2009 Weapon Systems Acquisition Reform Act intended to put measures in place to force the DOD to address the issues that cause overruns and schedule slippage.   Among other things,  this legislation would create the position of Director of Independent cost assessment for Major Defense Acquisition Programs (MDAPs) and require the DOD to perform trade-offs between cost, schedule and performance early in the program lifecycle. ...
Original Post Date: Friday, March 6, 2009 Barak Obama's 2010 U.S. Federal Budget proposal promises a "New Era of Responsibility", and in the introduction he says,  "...we must begin the process of making the tough choices necessary to restore fiscal discipline, cut the deficit in half by the end of my first term in office, and put our Nation on sound fiscal footing." Tough choices indeed. Therein lies the greatest challenge.  With the best intentions, our government tries to do good things, but always starts more projects than it can afford.  And often the expected "value" of an initiative is never fully vetted before a project is ...
Original Post Date: Wednesday, February 25, 2009 Author Nassim Taleb describes a Black Swan as an unexpected event that ultimately leads to what best can be described as a paradigm-shift. In his book, The Black Swan, he includes 9/11, the rise of the Internet, Google and the personal computer as Black Swan events. We could not have predicted those events but they have had a huge impact on us. Even positive Black Swans can be a source of frustration. Since so few people are prepared for them, it becomes impossible to profit from them. The group that is most frustrated by ...
Original Post Date: Friday, February 6, 2009 Last week I was asked to participate in Career Day at my son’s elementary school.  I was both honored and humbled.  Honored because the school felt that my career was something the children would be interested in and humbled because I was forced to concoct a story that would make cost estimating and analysis both understandable and interesting to children from kindergarten through grade eight.  Fortunately the format was such that I presented to each grade individually so at least I did not have to come up with one story to address ...
Original Post Date: Monday, February 2, 2009 In a seminal RAND Corporation report, Bureaucracy Does Its Thing, author and former CIA agent K.W. Komer promotes the idea that the mindset of America’s institutions led to problems in Vietnam. His thesis is that the bureaucracies of the U.S. were fixated on fighting the Vietnam War according to how the bureaucracies had prepared and organized instead of in manner that the situation required. As I read the stimulus package before Congress, I see a focus on the idea that new technology will create jobs. Yet I also have read that Governor Schwarzenegger ...
Original Post Date: Thursday, January 22, 2009  Like many others, I was astonished last Thursday by the images on my browser of those 155 extremely lucky people standing in the Hudson River.  And they certainly were very lucky last Thursday.  If you’re destined to fly on a flight bound for collision with birds, you want it to be piloted by a hero like Captain Sullenberger.  The incident made me think about what a hero is and how we all have the opportunities to be heroic in our chosen professions. According to Wikipedia, a hero refers to a character that, in ...
Original Post Date: Tuesday, January 20, 2009 Today, change is in the air.  As I write this, Barack Obama is about to be sworn in as our new U.S. President and the space community, among others, should be braced for change.  A recent LA times article reported that of the 74 questions asked of NASA by the Obama transition team, over half were on basic spending issues, including cost overruns. The Obama team and the NASA Administrator Michael Griffin clearly do not see eye-to-eye.  Monday, it was announced that Mr. Griffin will step down from the post.  Griffin characterizes himself as an ...
Original Post Date: Tuesday, December 30, 2008 It seems that, even in the midst of billions of dollars of bailout funds, the federal government is taking accountability a little more seriously.  Politics aside, the government is making the effort to ensure that every dollar spent is an investment rather than waste.  As we all know, industry follows the lead of government.  We see this effort for accountability in a recently introduced Senate resolution (that will be re-introduced in the next Senate), S. 3384. The Information Technology Investment Oversight Enhancement and Waste Prevention Act of 2008 was sponsored by Sen. ...
Original Post Date: Wednesday, December 17, 2008 A recent Gartner report indicates that industry enthusiasm for SOA is waning.  The reasons cited are the lack of enough people with the proper skill sets to perform SOA deployments and the lack of a good business case for SOA.  It’s an interesting but not really unexpected direction.  SOA has been surrounded by significant hype, ensuring that organizations surveyed would be anxious to profess their desire to start a SOA project.  But as the rubber hits the road, these organizations are realizing that SOA may not be the answer to all of their ...
Original Post Date: Thursday, October 30, 2008  Software cost estimation is hard.  I have learned this the hard way – as a software developer and later as the manager of software development projects. Today, as a builder of cost estimating software, I learn something everyday about software development that reinforces the fact that software cost estimation is hard. I attend a lot of trade shows and I talk to a lot of software people about how they estimate software costs.  Many of them have no formal process, many don’t collect data as projects progress, many of them perform estimates off the ...
Original Post Date: Tuesday, October 7, 2008  Jacob has a great comment to my recent post on getting it "right the first time".  He notes that requirements are often fuzzy and that estimates rely on peoples' opinion of cost and duration - and that the are often wrong.  He asked what silver bullet we have. Our silver bullet is a proven discipline that makes people better estimators and sheds light on fuzzy requirements. It starts with the people. Becoming an accurate estimator requires the same step-by-step approach as any learned skill such as golf or tennis or swimming (things I ...
Original Post Date: Monday, October 6, 2008  According to Gartner, Service Oriented Architectures (SOAs) will be used in more than eighty percent of mission critical operational applications and business processes by the year 2010.  Perusal of the literature on SOAs leads to visions of ease of implementation and cost savings of epic proportions.  And it is likely that not only will service oriented implementations results in cost savings, but that without them many currently envisioned capabilities in the corporate world and the Department of Defense (DoD) will be impossible to deploy, maintain, and evolve as technology explodes and requirements and ...
Original Post Date: Wednesday, October 1, 2008  As I prepare my remarks for the first PRICE Systems International Symposium and User Group Meeting in Asia hosted by the PRIGENT corporation, I am astounded by the recent globalization of the Defense Industry.  Worldwide weapon systems acquisition has been permanently changed by:  the merger of US defense contractors in the 1990's, the entry of European contractors into the US Defense Industry (EADS, BAE) in the 2000's, and the entry of Korea into the global market happening now. Today, BAE Systems ...
Original Post Date: Wednesday, September 10, 2008 Martin Woodward ‘s comparison of software development to Sudoku does an excellent job of explaining why software cost estimation is hard.  We constantly hear about software development projects that are unsuccessful because they have violated one or more aspects of the Project Management Triangle  - they are either delivered late, delivered over budget or fail to deliver the capability that users require. And while I firmly believe that software development is an engineering discipline, software project estimation is often more complicated than estimation for other engineering disciplines because software project output is not nearly ...
Original Post Date: Wednesday, September 10, 2008 A good point is made in a comment to my last post, Chris Carter says, "As estimators I think it is our duty to tell our customer (management) what we assess the possible range of outcomes to be so that they can make use of this information ".  I agree that we should always deliver an indication of accuracy every estimate.  Uncertainty and risk analysis is an integral feature of TruePlanning and we educate our clients on the value of estimate ranges to optimizing project and portfolio performance. The uncertainty-based probabilistic confidence-level of an estimate that ...
Original Post Date: Wednesday, August 27, 2008 While working with clients who operate under fixed budgets I often hear, "Cost is not an issue when we plan and budget, so why is estimating important?".  I quickly stress that estimating is not just about cost.  It about balancing project scope, cost, time, benefits and risks. If your estimates are not accurate, your projects and portfolios are not optimized – and you are wasting money. Projects are planned and managed within scope, time, and cost constraints. These constraints are referred to as the Project Management Triangle.  Each side represents a constraint.  One side ...
Original Post Date: Tuesday, August 19, 2008 Recently a client approached me with a thought provoking inquiry.  They were interested in performing historical trend analysis on their software projects to support estimating software costs for future technologies.  They have done this for years with hardware procurements and wanted to start performing the same kind of analysis for software. For hardware it’s not that hard to do, we have tangibles like RAM size, processor speed, resolution, etc. The question they had for me was “What are likely candidates on which to perform historical trend analysis for software”.  Think about it.  What ...
Original Post Date: Tuesday, August 12, 2008 I frequently attend trade shows and conferences focused on software development and/or cost estimating.  These shows provide a great opportunity for me to perform informal, unscientific surveys of the state of the software estimating discipline.  When queried on software estimating practices, more than half of those surveyed indicate a method that significantly resembles some attraction at a local carnival.  To the follow up question of “How’s that working for you?” the reply is almost always as expected – “Not too well”. As an industry we have failed pretty miserably at institutionalizing software estimating ...
Original Post Date: Wednesday, August 6, 2008 Last week the U.S. Senate Committee on Homeland Security and Governmental Affairs held a hearing entitled "Offline and Off-budget: The Dismal State of Information Technology Planning in the Federal Government".  The prepared remarks by those who testified before the committee make good reading.  You can find them here. The committee focused on the many IT projects that are overrunning cost and schedule, giving most Federal Agencies failing grades on their budget management report card.  My experience while working with Fortune 500 companies is that they do not do much better - we just do ...
Original Post Date: Friday, August 1, 2008 Whether you are pricing a competitive bid, or you are trying to get a new product to market, estimating accuracy will determine your success or failure.  When pricing a competitive bid, you first want to “ghost the competition” to determine a price-to-win.  Parametric estimating models allow you to quickly estimate the cost of recently priced items from your competition to determine their bidding margins and target a likely price-to-win for a new competition.  I recently worked with one of our clients who has an extensive database of competitive bids from which he can determine ...