• Predictive Analytics for Improved Cost Management



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Original Post Date: Thursday, December 15, 2011 This week CAST released their second annual CRASH (CAST Report on Application Software Health) Report.   The summary findings can be found here . You will also find a link to the Executive Summary.   The report highlights trends based on a static analysis of the code from 745 applications from 160 organizations.  The analysis is based on five structural Quality characteristics: security, performance, robustness, transferability and changeability.  Some of the more interesting findings include: * COBOL applications have higher security scores that other languages studied (meaning they have better security)  I personally found this finding ...
Original Post Date: Monday, December 12, 2011 Check out this paper “The Economics of Community Open Source Software Projects: An Empirical Analysis of Maintenance Effort.”  In it the authors hypothesize that Open Source practices increase the quality of the software that gets produced and subsequently lead to code that is less costly to maintain.  Low quality code must be refactored more frequently than high quality code and there is substantial evidence that maintenance interventions tend to lead to even more degradation of the quality of the code.  So not only are low quality applications more expensive to maintain, the unit ...
Original Post Date: Monday, November 28, 2011  Check out this blog post  on project estimation.  The author discusses the practice of ‘padding’ effort estimates and how destructive this practice can be to healthy project management.  She suggests that project team members, rather than padding their individual efforts at a task level, should collaborate with project management in order to produce a good solid project plan with sufficient contingency reserves.  This allows for the project plan to reflect the most likely case but contains a safety net for those cases where the stuff that was unknown at the time of project ...
Original Post Date: Tuesday, November 8, 2011  Last week I attended the 26th annual COCOMO forum.  This meeting is an interesting combination of conference and working group and for me it’s a great place to take the pulse of the software and systems estimating community.  Lots of times you’ll go to a conference like this and feel as though the same old things are repeated year after year.  Not so with this conference – it is always a great mix of seasoned practitioners and graduate students with both groups providing forward looking information and inspiration on a variety of ...
Original Post Date: Thursday, October 20, 2011  Check out this article.   “Why IT Projects May be Riskier than you Think”.  If you read through the comments you will see that this article truly resonates with many in the field.  In the article the authors discuss research of over 1471 IT projects (large projects with an average cost of $167 million) comparing budgets and expected performance with actual costs and results.  Their results were surprising in that the average overrun was only 27%.  Turns out that the average isn’t what requires study but rather the outliers.  The study found that ...
Original Post Date: Monday, October 3, 2011 Here’s an interesting article “Technical Debt as Metaphor for Future Cost” ().  In this the author discusses the acceptability of using the metaphor of technical debt to facilitate communications between business leaders and the software team when negotiating around the triangle  (time, money, scope).   And while the  author accepts the use of this metaphor good “short-hand” for communicating the fact that avoiding the work now is not sparing the cost but just rearranging the way the costs are incurred – and often increasing the overall costs that need to be spent.  The ...
Original Post Date: Friday, September 9, 2011 I have recently being following an animated thread on LinkedIn “Death of a Metaphor – Technical Debt.” It’s been live for 2 months with over 200 contributions from dozens of different people.  The discussion was launched by questioning whether continued use of this metaphor makes sense.  The discussion thread weaves and bobs around actually answering this question but it’s amazing how passionate the world is on this topic.  My personal opinion is that it’s a perfectly adequate metaphor because it helps create a discussion between IT and the business leaders in terms ...
Original Post Date: Friday, September 2, 2011  The IEEE published “Top 11 Technologies of the Decade” in the  January 2011 editions of the IEEE Spectrum magazine.  It should come to a surprise to no one that the Smartphone was number 1 on this list.  The answer to the author’s question “Is your phone smarter than a fifth grader” was a resounding YES![1]   In 1983 Motorola introduced the first hand hell cellular phone.  It weighed in at two and a half pounds, had memory capacity for 30 phone numbers, took 10 hours to recharge and had a selling price of $4000 ...
Original Post Date: Thursday, August 25, 2011  Check out this Report on Big Data from McKinsey & Company published in June 2011.  Back in the day, when personal computers were becoming widely accepted and Microsoft Windows© was the new cool thing, SneakerNet was a common means of sharing data.   Certainly the introduction and subsequent improvements of networking technology and the Internet have made data sharing a whole lot easier and quicker.  But the concept of Big Data creates a whole new level of opportunity and potential for collecting and using data in ways heretofore unthinkable. So what is Big Data?   According ...
Original Post Date: Thursday, August 11, 2011 A Bell 430 Helicopter's rear blade spins 1884 times per minute; how many times for the main blade?  Submit your estimate in the comments section!
Original Post Date: Monday, August 8, 2011  PRICE Systems is involved with the formulation of the total Life Cycle/Whole Life of systems of systems and is asking the question, "Is the META 'V' on the right track?" INCOSE is considering the total life of the system, the traditional Development Engineering V must be expanded to account for the life of the system beyond Initial Operational Capability.  In this writer's opinion, we have to extend the development V to account for this with this Meta-V concept.  The Affordability Working Group recognizes that IOC is:  The initial release of both the Primary and Enabling ...
Original Post Date: Monday, August 1, 2011 After many years of working with systems engineers and design engineers it became apparent to me that the cost of the system they were designing / building mostly seemed to be an after thought. Maybe not by the Lead Systems Engineer or Program Manager but certainly down in the trenches. The engineers working at the subsystem, component, and element levels always expressed frustration with having too much to think about to add one more variable, such as cost estimation, to their work load. I posit that this can no longer be the case. In ...
Original Post Date: Friday, July 29, 2011 PRICE Systems is integral in the INCOSE Design for Affordability Initiative as a vital member of the Working Group Internationally. The INCOSE Affordability Working Group’s definition of Affordability is: Affordability is the balance of system performance, cost and schedule constraints over the system life while satisfying mission needs in concert with strategic investment and organizational needs. The INCOSE Affordability Working Group’s definition of SE Design for Affordability is: Design for Affordability is the Systems Engineering practice of balancing system performance and risk with cost and schedule constraints over the system life satisfying system operational needs in ...
Original Post Date: Wednesday, July 27, 2011 Open Source software is software that is distributed publicly with all of its source code.  Users of open source software are encouraged to review the source code, make changes to it and share those changes with the rest of the user community.  The value in open source is that providing the source code to the user community allows those in the community who are willing and able to make improvements, add features, and fix bugs. Open source takes the notion of peer review to the next level.   It means that instead of ...
Original Post Date: Wednesday, July 20, 2011 Electronics Complexity and Quality Levels…   The PRICE Calculator for Electronics Manufacturing Complexity, shown below, has a subtle but very powerful feature for Quality Adjustment, based on Mil-Hdbk-217E Quality Levels.    The above shows “None” which yields the standard MCPLXE, in this case a 8.07 value applying 100% Large Scale Integrated Circuits for Display (with CRT) equipment as an example. Yet, in the course of estimating a mission-critical automatic tester  with multiple controller-card assemblies for an airborne-military platform, I adjusted for more stringent quality levels—specifically “S-1” level consistent with Mil-Std-975/ Mil-Std-1547 per below.   Note that ...
Original Post Date: Wednesday, July 20, 2011 How many golf balls would it take to circle the Earth at the equator?  Submit your estimate in the comments section!
Original Post Date: Tuesday, July 12, 2011 Check out this article from CIO magazine about managing your project budget.   The author, Jason Westland, suggests four things necessary to maintain control of your project budget.  While these are not earth shattering suggestions, sometimes project managers in the throes of a project can lose sight of their importance.  The strategies are: * Continually forecast the budget * Regularly forecast resource usage * Keep the team informed * Manage scope meticulously Or to put it another way – respect and revisit the Project Management Triangle.  (To learn more about the Project Management Triangle go to this ...
Original Post Date: Monday, July 11, 2011 There is a ton of code out there and we’re constantly adding more.  Gartner reported in 2009 that there were more than 310 billion lines of code in use worldwide. MS Word has grown from 27,000 lines of code in the first version to about 2 million in 2010.  The Windows Operating System grew from 3 million lines of code in 1992 to 20 Million in 1998.  You get the point – there’s lots of code out there doing lots of the same things that we may want our software to do. One ...
Original Post Date: Tuesday, June 21, 2011  What percent of active U.S. military personnel are from the Marine Corps?  Submit your estimate in the comments section!
Original Post Date: Friday, June 17, 2011  Building transparency and traceability into your estimating process leads to more defendable estimates and we can help you do that. We will demonstrate how historical data is transformed into predictive models.   You will learn how your data can be synthesized into custom models that can be employed in support of third party models within a single analytical framework. Learn more at our webinar on June 29th @ 11am Eastern.  Reserve your no-charge; no obligation webinar seat now at: https://www2.gotomeeting.com/register/372682434
Original Post Date: Wednesday, June 15, 2011 At the 2011 ISPA Conference, I conducted a ½ day workshop How To Develop Data-Driven Cost Estimating Relationships  in TruePlanning. The attendees at the workshop learned how to import their own data into TruePlanning and develop custom Cost Estimating Relationships. We covered three case studies:   ·         In the UCAS case study we demonstrated how we can build CERs at a higher level to provide a test of reasonableness to the CAPE. ·         In the SRDR case study we demonstrated how we develop a CER to estimate SLOC based on historical data and use the results ...
Original Post Date: Wednesday, June 15, 2011 While teaching an introductory TruePlanning for Software Estimating course this week at an Army location, I was asked to follow up with a clarification on “percent adapted” calculation.  The official PRICE training materials definitions are:   • Percent of Design Adapted - the percentage of the existing (adapted code) design that must change to enable the adapted code to function and meet the software project requirements;   • Percent of Code Adapted - the percentage of the adapted code that must change to enable the adapted code to function and meet the software project requirements.   The former, Design, ...
Original Post Date: Friday, June 10, 2011 I’m on my way home from the ISPA/SCEA (International Society of Parametric Analysts, Society of Cost Estimating and Analysis) Conference held in Albuquerque this week.  Attendance was very good (2nd best in the conferences history) and as the content seemed especially good this week.  I attended lots of good talks on topics ranging from SEPM (System Engineering, Project Management) cost estimating, Joint Confidence Levels, Software Estimating, Affordability,  Agile software development and estimating for Enterprise Resource Planning Systems.   Of course, just because the topics are good and well presented doesn’t mean I have ...
Wednesday, June 8, 2011  What is the fuel capacity (in gallons or liters) of a Boeing 737 jet?  Submit your estimate in the comments section!
Original Post Date: Friday, June 3, 2011  If I Google the phrase “cloud computing” I get about 49,900,000 hits.  That’s a lot of hits – more than 10 times the hits I get if I Google “service oriented architecture.”  This made me think that cloud computing is an area I needed to learn more about. So what are we really talking about when we talk about cloud computing?  “The cloud” is a generally accepted euphemism for the Internet.  End users access computing assets from the cloud using a model similar to one that homes and offices use to get electricity ...
Original Post Date: Wednesday, May 25, 2011  Going to ISPA SCEA in New Mexico?  If so, join us for a workshop on data driven cost estimating.  Description:  Building transparency and traceability into your estimating process leads to more defendable estimates.  This hands-on workshop demonstrates how historical data is transformed into predictive models.   You will learn how your organization’s data can be synthesized into custom models that can be employed in support of third party models within a single analytical framework.  Participants will learn:  (1)   To develop system level estimating relationships to provide a test of reasonableness and historical cross-check to proposed estimates. (2) To develop ...
Original Post Date: Thursday, May 19, 2011 I was recently asked by a client to provide a synopsis of what TruePlanning offers in response to the Ashton Carter Memorandum – Implementation of Will-Cost and Should-Cost Management. In the memo, the Undersecretary of Defense AT&L listed “Selected Ingredients of Should Cost Management”. It was interesting to note how much capability is provided by TruePlanning to effectively support efficient should cost management. In this month’s blog, I will share with my response to our client with you. ...
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: Wednesday, May 18, 2011 This week I am attending the Systems and Software Technology Conference 2011 in Salt Lake City.  I've been a regular at this conference for the last 20 years.  While attendance has declined, the conference continues to deliver quality content for developers and acquirers of software and software intensive systems.  The keynote was delivered by this year’s recipients of the prestigious Wayne Stevens Award.  Barry Boehm, one of the recipients was well known to everyone in the room and the software community.  He gave a great presentation reviewing his technology predictions from a paper presented in 2006 and offered predictions for 2011 ...
Original Post Date: Tuesday, April 19, 2011 Happy Easter!  What is the weight of the world's largest jellybean?  Submit your answer in the comments section!
Original Post Date: Tuesday, April 12, 2011 What is the aircraft speed record, in mph or km/h, for an unmanned jet airplane?  Submit your estimate in the comments section!
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, April 5, 2011  In 1961 at the MIT Centennial, John McCarthy opined “if computers of the kind I have advocated become the computers of the future, then computing may someday be organized as a public utility just as the telephone system is a public utility…. the computer utility could become the basis of a new and important industry”  [1].  In 2006, Amazon Web Services was launched providing computing on a utility basis.  Since that time the notion of cloud computing has been emerging and evolving. Cloud computing is a paradigm that makes the notion of utility ...
Original Post Date: Tuesday, April 5, 2011 In mph or km/h, what is the average cruising speed of a Boeing 737 jet?  Submit your estimate in the comments section!
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: Tuesday, March 29, 2011  How many windows are there in the U.S. Pentagon?  Submit your estimate in the comments section!
Original Post Date: Monday, March 28, 2011  So how did your basketball picks go this season?  My bracket is officially closed since absolutely no one picked any of the final four teams!   I am happy to report that I came in second with a whopping 36 correct picks - picks that most would judge to be pretty bad.  So where did we go wrong? Since I don’t really follow college basketball closely during the year I make my picks somewhat randomly – loosely based on the teams' standing but occasionally predicting an upset.  Naturally, the upsets I predicted were not ...
Original Post Date: Tuesday, March 22, 2011 On average, how many times does a jogger's heel strike the ground per mile?  Submit your estimate in the comments section!
Original Post Date: Wednesday, March 16, 2011 Happy St. Patricks Day!  The average American eats 4.4 lbs (2.0 kg) of baked beans annually;  what is it for Ireland?
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: Tuesday, March 8, 2011 How many passengers does the world's largest jetliner, the Airbus A380, hold?  Submit your estimate in the comments section!
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 ...