• Predictive Analytics for Improved Cost Management



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Check out the November/December issue of Crosstalk (http://www.crosstalkonline.org/issues/novdec-2016.html) “Beyond the Agile Manifesto.”  Here you will find several really great articles on the uses and the future of agile development.  As usual I started at the end with David Cook’s Backtalk article – “Too Agile for my Own Good”( http://static1.1.sqspcdn.com/static/f/702523/27309805/1477697823283/201611-Cook.pdf?token=ayD00sE4rcknGJpn6XEk1O08YBk%3D).  Cook not only shared whimsical information about his favorite grocery items along with his curmudgeon-like  frustration with the stores insistence on changing things up occasionally by moving familiar items to unfamiliar locations throughout the store.  Cook admits however that this behavior – while originally annoying has resulted in improvements in the ...
Crowdsourcing is the practice of harnessing the power of the crowd to solve problems or accomplish certain tasks.  The expression Crowdsourcing was coined as a portmanteau of the words crowd and outsourcing.  While advances in technology have pushed this practice to the forefront recently – the notion has been around for a long time. It is a participative online activity where questions and tasks are proposed by an individual or organization via a particular crowdsourcing platform.  Individuals or groups of individuals who belong to that community – accept the challenge and attempt to answer the question or complete the proposed ...
One of the most frequently asked questions from new users is:  At what level should I be estimating my project in TruePlanning®?  To be clear, the question involves how detailed the product breakdown structure should be.  The answers can vary widely, as seen in the two examples below for an aircraft. Figure 1.  F-22 template available in TruePlanning® 2016 Note: subassemblies collapsed to fit PBS onto one page.   Figure 2.  F-22 estimated as one hardware cost object. The preceding examples might be extreme ends of a spectrum.  In the first example, we have provided a template in TruePlanning® 2016 that models a fighter ...
We have all likely heard of “should cost” estimates.  Boiled down: If everything goes as planned, how much should program cost?  Are there efficiencies or best practices we can employ to get the job done faster and cheaper?  We may use analogies, parametrics, bottom up estimates, or extrapolation of actual costs to make a determination.  How many of us have heard of “should price”?  “Should price” is the determination of reasonableness of price for commercial items.  When contracting personnel receive quotes for off-the-shelf items, they need tools at their disposal to determine if the item is fairly priced.  On ...
Recently, I was contacted by an Air Force estimator with a novel challenge.  The estimator’s product breakdown structure modeled the development and production of various hardware items over several years.  TruePlanning can easily assist in spreading production quantities or tracking “ship sets” of items required for a weapon system.  In this case, the user wished to have different quantities for different items.  Typically, we use a System cost object or the System Folder to spread production, which is then attributed to all components within the estimate.  Coming up with multiple production schedules within the same estimate presented a challenge. In ...
In the previous (second) blog in this series, we discussed using the NIST Special Publication 800-171 Appendix E to list all possible cyber security requirements.  We then down selected the entire list of 123 items into roughly 60 that may directly impact the software development process.  Now, we will cover how the impact of those 60 items could possibly be included in a TruePlanning® estimate. I will offer three primary methods for accounting for additional effort of cyber security requirements.  We will look at modeling the requirements as individual cost objects in the estimate.  We will then consider setting inputs ...
We will pick up where we left off on estimating the cost of cyber security by looking at requirements.  Recall from a previous blog that the requirements for Cyber Security are outlined in Appendix E of the National Institute of Standards and Technology (NIST) Special Publication 800-171 document titled “Protecting Controlled Unclassified Information in Nonfederal Information Systems and Organizations.”  In Appendix E, there are a series of tables that outline the requirement, as well as the responsible authority for ensuring those requirements are met.  There are four categories of requirements*: NCO: Not directly related to protecting ...
A recent article in the National Defense Magazine highlighted the ever increasing need for cyber security.  (See http://www.nationaldefensemagazine.org/articles/2016/12/12/pentagon-paying-more-to-be-hacked)  When working on a software estimate for a program office here at Wright-Patterson AFB, I was asked “how do you handle cyber security requirements?”  My response was, “What does that mean for your program?  How are the requirements different?”  There was no good answer.  We may be required to incorporate cyber security requirements into a new software project, but there is no really good guidance as to what that exactly means.  We can probably assume that costs are higher for a ...
We’ve added many cool new features to our Hardware estimating model in TruePlanning® 2016, and I’d like to introduce the new Learning Curve features in this blog. First, we’ve added the ability to pull out the theoretical cost of any individual production unit, anywhere along the learning curve.  We call it the “Nth Unit Cost” metric.  This has been requested by many users, notably Air Force users and aircraft manufacturers, where it is common to use the 100th unit cost as a reference point to compare different types of aircraft.  Simply enter a value for “N”, and the Metrics tab ...
TrueMapper strives to provide an environment that allows users to be as efficient as possible when creating mappings. Sometimes users need to map all of a specific type of Cost Object, Activity or Resource to specific WBS items. In this case users would use the “Generic” tab of the Mapping Assignment Window. Assignments made from this tab can be stored off in a *.tpgen file and used against any PBS structure. Recently, some TruePlanning users came across a situation where they needed to assign all Resources from specific Cost Objects to a specific WBS element, except one. Those familiar with ...
TruePlanningXL is the TruePlanning/Excel interface reboot. Excel is a popular topic in the PRICE universe because Excel is clearly the most popular tool in the cost analytics quiver. Customers such as the Air Force, Army and the majority of the primary suppliers have processes inextricably based on Excel. One of the primary design goals of TruePlanningXL is for it to be as easy to use as possible. To support this, great effort is being made to study how it is used and improve TruePlanningXL’s usability based on the research. A second primary design goal is for TruePlanningXL to be ...
In our previous blog, we defined PCA and PRICE’s unique approach via TruePlanning.  This blog is the seventh of seven to describe by specific impacts on key business processes and functional areas that benefit from this capability. Affordability is an abstract term that most people think they understand but have difficulty articulating. The United States Department of Defense defines affordability as the degree to which the life-cycle cost of an acquisition program is in consonance with the long-range investment and force structure plans of the Department of Defense or individual DoD Components. However, the Department of Defense acquisition regulations require program ...
In our previous blog, we defined PCA and PRICE’s unique approach via TruePlanning.  This blog is the fifth of seven to describe by specific impacts on key business processes and functional areas that benefit from this capability. Estimates based more on engineering judgment than statistical data lack credibility. This comparison is especially true when proposing design alternatives to meet a customer’s unique program requirements. Companies that can’t demonstrate a rigorous affordability management process score low with their proposals because their bids presented without statistical data to back their estimates appear over-optimistic and risky, or too expensive. This situation ultimately has a ...
In our previous blog, we defined PCA and PRICE’s unique approach via TruePlanning.  This blog is the fifth of seven to describe by specific impacts on key business processes and functional areas that benefit from this capability. So what are my competitors most likely to bid? Competition Ghosting (sometimes called competitive analysis), can be an important capability when preparing for opportunity qualification or the bid & proposal development. Estimating what you believe your competition might do is extremely useful intelligence for your own Price-to-Win process. Ghosting empowers the user with an objective assessment of the competitor’s offering.  This is done for two ...
In our previous blog, we defined PCA and PRICE’s unique approach via TruePlanning.  This blog is the fourth of seven to describe by specific impacts on key business processes and functional areas that benefit from this capability. Effective management of a system or program starts with a budget in the front end and execution control and evaluation in the back end. Effective cost control can be achieved if the organization has a dynamic and flexible cost estimation capability which sets a baseline in the budgeting process and updates the costs / estimate-to-complete quickly and with minimum effort. Effective cost control is ...
In our previous blog, we defined PCA and PRICE’s unique approach via TruePlanning.  This blog is the third of seven to describe by specific impacts on key business processes and functional areas that benefit from this capability. Budgeting is a critical first step in developing an effective cost management plan. The ability to integrate your specific budget tools with a predictive cost estimation engine, whose output can be tailored to your organization’s cost activity center structure, is a very powerful capability. The requirements to achieve this level of budget management consist of the following: Accessing historical budget ...
In our previous blog, we defined PCA and PRICE’s unique approach via TruePlanning.  This blog is the second of seven to describe by specific impacts on key business processes and functional areas that benefit from this capability. For estimators and engineers, the PRICE Cost Analytic Framework® improves cost estimating speed and accuracy, with built-in flexibility to evaluate multiple alternatives quickly. The integrated set of data, tools, and processes enables organizations to successfully estimate and analyze the effort, schedule, and cost of projects.  Specific estimation applications include Independent Cost Estimation (ICE), should-costing, vendor/supplier assessments, cost-benefit trade studies, proposal baselining… and more. PRICE® ...
In our previous blog, we defined PCA and PRICE’s unique approach via TruePlanning.  This blog is the first of seven to describe by specific impacts on key business processes and functional areas that benefit from this capability.   PRICE® Cost Analytics (“PCA”) provides the tools and a systematic approach to enhance the effectiveness of Total Cost Management (“TCM”) through the application of cost management principles, proven methodologies and the latest predictive technology in support of the management process and its decision-making. PCA and TCM both start with a simple concept based on the time-tested Deming or Shewhard cycle. In essence, TCM and ...
  On this website, you will find multiple blogs as well as other links to descriptions of v2016’s new features and capabilities, often in the context of Predictive Cost Analytics and specifically our process-instance of PRICE® Cost Analytics or “PCA”… But what exactly is that, you might ask? PCA is a proven predictive analytics approach focused on cost management (Cost Estimation, Cost Budgeting, and Cost Control) that delivers the answers you need, when you need them.  As cost, profitability and affordability are a critical part of your decision criteria, PRICE® Cost Analytics will make you more confident in your decisions. PRICE® Cost ...
Your license has been updated to include TruePlanning 2016’s new IT Services catalog.  This capability is a significant upgrade to v14.2’s IT Infrastructure catalog.  In the past with the latter, representative of typical logistical equipment build-up philosophies, estimates were focused primarily on operations of existing/deployed IT enterprises.  Now, with IT Services, you can estimate IT deliverables as services, delivered with in-house and/or contracted resources.  This catalog was specifically designed to better align with the way organizations currently estimate and budget for IT services.  There are now 8x2 = 16 specific types of estimating capabilities, supporting both New Projects and ...
I hope you have enjoyed my series of blogs on the Four Pillars of Affordability. I have tried to impart to you what I have learned during my 30 years in the Defense Industry and the last 25 years as an Affordability Manager and cost estimator. The purpose of the Four Pillars of Affordability is to enable you, and your program, to develop a product for your customer that is considered affordable and ultimately, a value to them. My definition of Affordability is: Affordability is the process that balances performance with price to meet customer needs. A product is ...
When first creating your resume it can be overwhelming to know where to start. Personally, I would start by opening a Word Document and look through the pre-created templates. These templates help guide you to the best place to insert your information and provide an overall layout of a good resume. The same thing happens when you open TruePlanning® to create your first cost estimate. Like the pre-created templates in Microsoft Word, our templates were created by our cost research team to provide you with a guide on how to get started on your estimate. One of the templates we ...
In my first blog of this series I introduced you to the Four Pillars of the Affordability Process. They are: 1.       Management Support 2.       Methodology 3.       Training 4.       Tools/Automation In this fifth blog I write about the Fourth Pillar; Tools/Automation, teaching you what I have learned over the past 25 years as an Affordability Manager and Cost Estimator. Now that Management Support is in place, a written Methodology has been published giving Affordability the legitimacy it needs, responsibilities delineated, and templates to follow, and both Management and Design IPT Members have been trained, it is time to focus on the tools, automation, and support personnel ...
As most of the Summer Olympics occurred during the work week, it was hard to stay on top of the results and the big ordeal of how many medals Phelps has now. But luckily, Google makes it very easy to stay up to date with each of the games results because Google’s web crawling bot, named “Googlebot” not only finds pages the most relevant to your search but also “discovers new and updated pages to be added to the Google index.” (https://support.google.com/webmasters/answer/182072). So when you Google, “Total number of medals that Michael Phelps has won,” one of the first ...
In my first blog of this series I introduced you to the Four Pillars of the Affordability Process. They are: 1.       Management Support 2.       Methodology 3.       Training 4.       Tools/Automation In this fourth blog I will provide you with the benefit of my insight and years of experience by writing about the Third Pillar; Training. Once Management Support has been obtained (The Key) and a written Methodology (The Heart) published to breathe life into the process it’s time to train management and the members of Design Integrated Product Teams (IPT) in Affordability Methodology and its application at the program and IPT levels. Affordability training is best focused ...
The system engineer (SE) is responsible for the technical aspects of the project that includes working with the architecture, design, and integration teams.  SE develops a workable system solution that is capable of meeting the customer requirements.  The project manager (PM) is responsible for the programmatic elements of the project that include the schedule, budget, and staffing.  The PM also manages customer expectations and provide status reports.  The two roles require close collaboration.  The common elements between the two, referred to as SEPM, are requirements development, customer interaction, and risk management.  Due to these overlapping elements, an allocation between ...
A recent discussion with family and friends regarding customer service steered me to write this blog.  We determined that the “human” touch is almost extinct in today’s high technology, hurried world.  It is often difficult to get a living, breathing person to help you when you have a questions or concern with a product you purchased.  It appears that the bottom line has become the driver and ultimate decision maker for businesses. I was excited to share that I work for a company that still believes that customer service is the bottom line and that the “human” touch is ...
For those reading from my last post, let’s say you wanted to use one of our templates to model your own project. The project in question is an aircraft in the development phase and you know nothing except for its overall desired weight and its intended max speed is Mach 3. Let’s search in the PRICE server: After entering the “aircraft” category, you will see a wide assortment of aircraft related projects. Since we are trying to estimate a supersonic aircraft, click the “Aircraft Template 881C” project. The project was constructed based on our research of supersonic fighter aircraft, which ...
The 881C templates have been desired heavily by PRICE users long before PRICE even knew who I was. Now that I’m here, have a year under my belt, and have the template number approaching the century mark, I think it’s time I updated everyone on what’s going on and the plan moving forward. First off, let’s take a minute to fill everyone in. The PRICE templates are based on the widely used MIL STD 881C product breakdown structures. In other words, these templates are projects that the cost research team made in TruePlanning® to model helicopters, fighter jets, battleships, tanks, ...
In my first blog of this series I introduced you to the Four Pillars of the Affordability Process. They are: Management Support Methodology Training Tools/Automation In this third blog I will give you the benefit of my insight and experience by writing specifically about the Second Pillar; Methodology. In my experience it is a written Affordability Methodology that is the heart of the Affordability Process. The Methodology breathes life into the process and details the specific requirements to implement and make an Affordability effort successful. A written Affordability Methodology does ...
In previous versions of TruePlanning, it was difficult to add items relating only to Life Cycle. Adding a Hardware element meant having the Weight of the object added to the Assembly and System weights. In TruePlanning 2016, a Life Cycle only (no Acquisition Costs), may have zero weight. The Life Cycle inputs are effectively separated from the Acquisition inputs. You can give an object deployment, Maintenance and Spares locations, Hours of Operation and individual costs and shipping weights. These values will give all the necessary Life Cycle outputs, without affecting the Acquisition Costs. For further details, please consult your named PRICE System Solutions ...
If you’re like me and subscribe to or follow sites and people who care about software, it is likely you are regularly barraged with emails, Tweets, LinkedIn Updates, etc. discussing technical debt and attributing many computer related disasters to be a direct result of technical debt.  The notion of technical debt was introduced in 1992 by Ward Cunningham, writing “Shipping first time code is like going into debt.  A little debt speeds up development so long as it is paid back promptly with a rewrite” [1].  The term technical debt is often used as a metaphor to help ease ...
TruePlanning 2016 takes a large step forward in allowing Maintenance calculation. For example, in previous versions of TruePlanning, the only way a user could specify different on equipment maintenance was by adding a complete worksheet to change the percentage of work done on the equipment. TruePlanning 2016 has a number of Life Cycle inputs added to Hardware and COTS objects to make calculation easier. Among the most important are: Average Number of Parts per Repair – Complex repair may need more than one part per repair. False Failure Fraction - Some pieces of equipment may have ...
In my first blog of this series I introduced you to the Four Pillars of the Affordability Process (As a reminder: the definition of Affordability is: Affordability is the process that balances performance with price to meet customer needs.). They are: Management Support Methodology Training Tools/Automation In this second blog, I will give you my insight and write specifically about the First Pillar: Management Support. It is my personal experience that Management Support of the Affordability Process is the single most important factor that will enable Affordability to flourish ...
As a new trainer/mentor for PRICE Systems, I try to mitigate the uncertainty that each training/mentoring session might expose.   As is typical, questions that often need a deeper answer that we were prepared to provide.   At a recent training session, we were asked for specific instructions on how to export the TruePlanning® cost model into ACE-IT.  Upon returning to my office, I researched the topic in the Help section of the model and was unable to find step-by-step instructions to accomplish this task.  The guidance in the help section states, “You can share TruePlanning data with others by exporting ...
My name is Bill Williamson. Welcome to my blog. I have been in the Defense Industry for over 30 years. I am an affordability and cost estimating subject matter expert (SME). I have 25 years of experience as an Affordability Manager and Cost Estimator. I am an expert in both the PRICE TruePlanning and ACEIT cost models. For my first series of blogs I am going to write about the four pillars of the Affordability Process and provide you my unique insight into making the process work for your program. The definition of Affordability is: the process that balances performance ...
While employed with the federal government as a cost estimator/analyst, I traditionally used a Work Breakdown Structure (WBS), more specifically, an 881C template, when doing a cost estimate.  I was introduced to PRICE TruePlanning®, which uses a Product Breakdown Structure (PBS), a few years after I started with the Department of Defense as a Cost Estimator.  Initial confusion and bafflement fell upon me—what is the difference and which breakdown structure should I use?  My search for clarification created an opportunity to address this subject briefly in hopes that it helps others with the same questions and confusion I dealt ...
If you’ve taken my Software Training class, you’ve heard me use the analogy of “taking someone else’s spreadsheet and adding your own logic” to distinguish between modifications, adapted code and glue code.  But let’s take a step back to make sure we’re all in agreement {if not, blame me not the product!} #1.) To be clear, COTS is shrink-wrapped, ready-to-go with near-zero modification to core functionality.  Generally, we really prefer to see COTS modification no more than 10%. #2.) If this latter core functionality needs modification, then we recommend using the SW Component object with Adapted code, as well as Reused ...
Last week as I sat in my office gazing out the window, I was struck by the throngs of people outside my window lurching distractedly through the parking lot staring at their phones.  Turns out that the water tower in the back of our office is a Poke Stop – part of the new Pokemon Go craze.  In case you live under a rock, Pokemon Go is the new smart phone game that allows one to wonder around the real (physical) world collecting Pokemon.  The game can be downloaded for free for either the iPhone or Android.  Once you ...
TruePlanning® 2016 will be coming out very soon, and with it, we will debut a new set of cost estimation models for Operational / Site Activation / Deployment of automated information systems (AIS).  These models capture the costs of system deployment activities on one or more sites (study visits, installation, commissioning, migration, etc...).  These activities are performed in a design office and on the sites defined by the contract.  They begin at the end of the development phase and continue through the installation phase of the site’s systems. The model was built with the guidance from experts with 30+ years ...
Calibration is at the heart of cost analytics and TruePlanning’s support for calibration is one of the features that makes the TruePlanning suite of products the premier suite for performing cost analytics. TruePlanning has a built in calibration feature that allows users to set up and perform calibrations repeatedly. Additionally, the Excel based Excel Solution provided by PRICE supports calibration efforts from Excel. The “new for TruePlanning 2016” TruePlanningXL also supports calibration from Excel. TruePlanningXL is a new Excel Add-in provided by PRICE to allow users to work more efficiently in Excel with the suite of TruePlanning products. TruePlanningXL only ...
This June, I presented at the “Government Contract Pricing Summit”. The topic of the presentation was the integration of TruePlanning and ProPricer. The participants of the summit were generally long time ProPricer users, but not familiar with TruePlanning, so it was a great opportunity to be able to meet new pepole in the price/costing world. When talking with long time ProPricer users the question I would ask them was: “Where do the hours come from?”  ProPricer is an industry leading software for the management and production of bids. ProPricer allows users to setup and maintain costing and burdening data, ...
TruePlanning® 2016 will be coming out very soon, and one of its new capabilities is modeling of scheduled maintenance activities.  Our hardware operation and support (O&S) model has historically focused on the costs involved with unscheduled maintenance, which are maintenance activities that react to a situation (e.g. a system failure) that needs to be fixed or replaced.  However, scheduled maintenance can also be a significant cost, and this can now be captured by our hardware model.  Here are some example situations that can now be easily modeled. Scheduled maintenance is performed at regular intervals, which can be based on calendar ...
TrueFindings helps users make sense of their data by allowing them to perform analysis that leads to the production of defendable estimates in TruePlanning. TrueFindings simplifies and promotes data management in a repeatable cost analytic-centric process. PRICE is always looking for ways to help users get the most out of the tools it provides. In TruePlanning 2016 PRICE will be providing a new high performance Excel interface and as part of this interface users will be able to move data from TruePlanning projects into an Excel file that can be natively imported by TrueFindings. TruePlanningXL is the new high ...
Here’s a great article written by Charles Symon’s discussing current challenges in software project estimation and how different organizational cultures deal with them differently.  http://nesma.org/2015/10/chaotic-and-controlled-software-project-estimating/.  According to the author, in a study of 105 software projects completed between 1997 and 2007 in the UK public sector – 30% were terminated, 57% experienced cost overruns averaging 30.5% and 33% suffered major delays. (“Cost over-runs, delays and terminations: 105 outsourced public escort ICT projects – D. Whitfield).  And this is only one study; any of us who live in the software world have heard more than our share of tales of ...
http://static1.1.sqspcdn.com/static/f/702523/26890568/1456888603297/201603-Cook.pdf?token=0f54EHOm9BNwSNhf3UAOmWk1mjs%3D Check out this article from the March/April issue of Crosstalk.  As is my custom, I start from the back with BackTalk – usually a short somewhat pithy commentary (General written by David Cook of Austin State University) on software related topics.  In this issue David starts with a stroll down memory lane – his own personal journey into software engineering – beginning back in the days when we when coded using cards or paper tape or connected to a mainframe via a 300 baud modem.   The point of the article was Security and Defensive Coding – he started with ...
Many people suggest that the first instance of an Internet of Things object occurred in the early 80’s with a Coke machine in the Computer Science Department of Carnegie Mellon University.  Apparently the Coke machine was located some distance from the department and the programmers were constantly trekking to the machine for find that it was out of their preferred beverage or to find that it had just been refilled and all the beverages were at room temperature.  Programmers being programmers, they decided to use technology to solve their problem.  They installed sensors and developed a program that would ...
Fast and efficient are good qualities to strive for whether you are creating super-spies, or selecting a format for transferring data. Jason Bourne excelled at what he did largely because he was able to think quickly and react even more quickly. It was fun to watch him get out of situations using his wits that would have left most of us in the fetal position.  Less exciting, but more pertinent to those of us in the fast paced world of software development, is the need to move large amounts of data between two entities. It could be a RESTful ...
“This year companies are focusing their attention on private and hybrid clouds.  Numbers show that hybrid cloud adoption is on fire while Docker and DevOps’ presence becomes indisputable.  2015 may have been the year of the cloud, but this year it is unstoppable; if surveys are right, we should expect 2016 to become the true year of the cloud”.  According to Bernard Golden of CIO magazine, the battle of the infrastructure is over, applications will be the push going forward.  Businesses, especially small and medium size businesses have accepted the fact that in many cases moving their infrastructure to the ...
Part 1 & 2 described 2016’s updates in the Hardware and Software catalogs So what else new has TruePlanning 2016 got in store for its estimating models?  A significantly enhanced approach to estimating Information Technology equipment and Services! Our new approach to IT estimation is to treat deliverables as services which can either be delivered with in house resources or contracted (or some combination of the two).  The list is actually quite an enhancement to our acquisition-only approach-- Software and COTS Related Services –      Application Development Services –      Application Services –      Database Services Equipment Related Services –      End User Services –      ...