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Original Post Date: Friday, December 18, 2009 The cost estimating community mourns the loss of a true pioneer this week. Our thoughts and prayers are with his family. Frank Freiman has a special place in the history of PRICE Systems as his innovative work is directly responsible for the company’s existence today. This is a classic case of where one man can truly made a difference. Thousands of estimators across the world have benefited and continue to benefit from his accomplishments. Frank began studying the applications of statistical quality control as an officer in the US Army during World War ...
Original Post Date: Monday, November 30, 2009 It seems that business and government today is mired in cost-benefit analysis. The cost side is fairly easy to understand: how much money will the business (or government) have to expend to deliver a given service? Benefits are a little harder to quantify. First, there is the difference between monetary versus non-monetary or social benefits. Some things like the office Christmas Party do not make any money but they keep morale high. Second, there is the difference between short-term and long-term costs and benefits. The company using Blackberries may bring the immediate satisfaction ...
Original Post Date: Friday, November 20, 2009 Bill Scheessele’s article in the Washington Technology, Time for a hard look at marketing strategies, is a quick read about organization’s reacting to these new economic conditions. He suggests that most organizations are... "Attempting to move forward with an obsolete business development operation, reacting to fewer opportunities and shifting budgets by shedding business development personnel, sticking with an outdated business development process that everyone in the industry uses, or doing nothing while waiting on the sidelines for conditions to change are not reasonable decisions." This is further supported by the recent flurry of acquisitions both ...
Original Post Date: Friday, November 13, 2009 Recently, Dale Shermon presented a webinar, "Preparing Bids Faster with Fewer Resources".  The content for the webinar was taken, as the title of this post suggests, from the recently released book Systems Cost Engineering. The webinar discussed how parametric estimating could dramatically decrease the time and thus the cost that is required to make important business decisions about whether or not to pursue contract opportunities. There are critical activities that organizations engage in every time there is an RFP such as Bid/No Bid decisions or competitive assessments.  So whether the RFP calls for estimating software costs or ...
Original Post Date: Wednesday, September 30, 2009 Recently I was interviewed by Doug Beizer of Federal  Computer Weekly for an article about the shift of government agencies away from custom software development and towards the use of cloud computing.  The interest in this topic seemed to stem from the introduction of Apps.gov online store earlier this month.   Having been in the software cost estimation community for more than 25 years, I have experienced this transition first hand but never really stopped to think about the whys and wherefores until questioned by Doug.  It was an interesting stroll down memory lane.  As an example, ...
Original Post Date: Wednesday, September 16, 2009 While most of the books on the topic of parametric modeling take a look at detailed techniques and fundamentals, such as building parent/child relationships or the mathematics behind models, Systems Cost Engineering, takes a more practical perspective to answer a very basic question:  What can parametric estimating do for my organization and how can we implement it?  The book covers an array of business processes that can be dramatically improved with the application of a standardized parametric cost estimating framework. These processes exist across multiple phases of a program's lifecycle such as early concept planning through development and production. Chapters are ...
Original Post Date: Thursday, August 13, 2009 Let’s start with a simple test. Which is greater: the number of six-letter English words that have "n" as the fifth letter or the number of six-letter words ending in "ing"? If you are like most people you’re thinking the correct answer is six-letter words ending in "ing". But most people are wrong. And the reason is simple, people rely on what they can easily recall. Since it’s much easier to think of 6-letter words ending in "ing" the fact that people come to that conclusion isn't surprising. Psychologists refer to this as availability bias. ...
Original Post Date: Monday, July 20, 2009  Did you know that according to kgb a single Google search takes 0.2g of Carbon Dioxide? Asking Google 2 questions is equivalent to boiling a tea kettle full of water.  If there were 2 billion Google searches a day in 2008, today we're looking at more than 400 Million g of Carbon Dioxide a day just for Google searches.  A part of my job at PRICE is to look into emerging trends and technologies to determine if and how changes in the world impact the costs of hardware, software and information technology projects.  ...
Original Post Date: Thursday, July 16, 2009 In an article in last weeks Harvard Business , IT Costs: Do You Speak Their Language), John Sviokla discusses the fact that as the information business continues to grow it is increasingly important for organizations to understand the impact of IT as it relates to their operating costs. This certainly rings True to us here at PRICE Systems who have recognized this reality. TruePlanning 2009 has been developed by PRICE specifically to help organizations get their heads around the true costs of Information Technology. Application development projects can represent significant expense to an ...
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: Thursday, April 2, 2009 I have to say that my foray into blogging has been an interesting one.  By definition, the Chief Scientist should be a nerdy sort of geek too high brow to pontificate on topics in such a pedestrian format.  Actually I kind of like it.  In part because I enjoy writing and I'm not picky about what I write - technical documents are OK but pontification works as well.  And in part because I know that in order to be a good writer in a particular genre one must read extensively from that ...
Original Post Date: Monday, March 23, 2009 Here’s a great article I happened upon while doing research for a paper I’m writing.  “Lessons Learned: IT’s Biggest Project Failures”  In this article we are treated to stories of IT projects that “first make people laugh and then” (hopefully) “make them think.”  As a long time student of the failed software project, I was neither surprise nor disappointed with the projects relayed.  The projects noted failed for reasons such as: Failure to perform a should-cost analysis before selecting a supplier Failure to recognize an unhealthy project before it ...
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: Wednesday, January 21, 2009 Dude, Where’s my Stimulus? If you turn on the news or open the newspaper, you will definitely come across an item about the stimulus package. Obviously, there will be much debate to come over the price tag for the initiative. But I wanted to take a moment to discuss where resources will be directed and how they will be dispersed. I also would like to talk about how this bill might affect us in the "Land of Estimation." High-tech is the theme for this stimulus. Most projects will involve technology upgrades of one sort or ...
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 ...