• Predictive Analytics for Improved Cost Management



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PRICE Systems has received several requests for the ability to produce a report that iterates over the PBS elements of a TruePlanning project. One common use for such a report would be a Basis of Estimate report. Another common use would be as a ‘brief’ of the estimate. The core concept is that a report could be generated that would contain information for each PBS element in the project and have a discrete report created for each element. The exact target for each discreate report could be variable. Users might want to have a report for each Activity for ...
Of the many features that help TruePlanning stand out as the premier predictive cost analytics tool, TruePlanning’s ability to calibrate is frequently cited by users as the most important feature in TruePlanning. Users can create models that are highly tuned to the organizations and processes that they are modelling. The 50,000-foot description of calibration is to increase the fidelity of a model to a known process or organization by using ‘actuals’ (known result data) and driving TruePlanning inputs so that the known values are obtained. A concrete example would be knowing the number of hours it took create a ...
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 ...
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 ...
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 ...
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 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 ...
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 ...
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 ...
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 ...
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, ...
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 ...
“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 ...
Introduction This document provides instructions on using a TruePlanning / Crystal Ball Solution that was created for a specific PRICE customer. The solution is based in a macro enabled Excel file. It is an enhancement of the generic TruePlanning / Crystal Ball solution and has been created to allow the customer’s personnel too quickly and easily setup and run analysis on TruePlanning projects using Crystal Ball. The customer had very specific requirements regarding the distributions to be used in uncertainty analysis and this tool was developed to allow them to use set the distributions they desired with minimal effort. The customer ...
While there was a time in my life when I was not a huge baseball fan – it was fun for a few innings but once I had my fill of hot dogs, peanuts and soda – I was ready to go home.  This changed the day my husband informed me that it was time to sign our four year old up for T-ball.  At least the transformation started that day.  As a mother of two up and coming little leaguers, I spent a lot of time watching baseball games.  And rather than be one of those mothers that ...
Last week I had the pleasure of attending the 30th annual COCOMO Forum in Arlington, VA.  As always it was an informative and enjoyable exchange of software and system estimating topics and challenges with some of the brightest practitioners in the industry.  Topics ranged from technical debt and software maintenance, early phase effort and schedule estimation, COSMIC function points and various data analytics topics.  In addition to the presentations there were several lively workshop panels discussing and debating future directions for the COCOMO and CoSysmo models (contemplating the 3.0 versions of each of these models. While all the talks were ...
For all you legacy PRICE-H users, your requests were heard loud & clear regarding estimation of multiple production lots, to include the option of specifying gaps between lot runs. The new Multi-Lot solution is controlled at the system-level via a Production Learning Gap Loss Factor  input.  It’s set at the top-folder object, under the Detailed Estimate input #62.  This input serves as a linear multiplier to adjust or eliminate the setback (gap) between lots of a multiple lot production run. This control hence allows you to account for more or less "loss of learning" during the gap.  Setback can be ...
We’ve wrapped up our first phase of research on the cost implications of Additive Manufacturing (AM), also known as 3D printing, and we have just begun phase two.  We teamed up with Additive Manufacturing groups in academia and industry, developed a research approach and estimating structure with the guidance of experts, and began collecting cost and technical data.  So far, we have gathered 648 datapoints from 3 organizations, which mainly includes data from 6 different printers.  The data are mostly for stereolithography (SLA) and direct metal laser sintering (DMLS) processes.  For our first cut at the data analysis, the ...
Original Post Date: October 8, 2015 Excel is easily the most common and widely used tool in the Cost Estimation universe. It can be used as a scratch pad, report generator, import/export vehicle, data repository as well as countless other applications. The Excel / TruePlanning interface is one of the first topics new users want to dive into. Currently TruePlanning can export and import Excel files directly, create reports in Excel and has two Excel based solutions for working with TruePlanning directly in Excel. The ‘big gun’ of the Excel interfaces is the “Excel Solution”. It is a macro enabled ...
Original Post Date: September 30, 2015 ‘It’s crazy to think that you’ll be good at estimating things that haven’t happened yet, if you can’t even accurately say how long things that have happened took.”  This quote from the blog post “5 Ways Software Developers Can Become Better at Estimation” (http://www.javacodegeeks.com/2014/10/5-ways-software-developers-can-become-better-at-estimation.html)  speaks volumes.  The current mantra – at least in the Aerospace and Defense communities is data driven estimation.  Estimates without solid project history data to back them up are consistently rejected or approved with substantial risk assigned.  Data collection in the world of estimation is no longer a nice to ...
Original Post Date: July 1, 2015   Introduction The latest version of PRICE’s “Large Project Engine” allows users to update the values in calculators through Excel. While calculators are designed to be easy to use and user friendly, there are times when it is convenient to update the data in a calculator in Excel. The following blog will provide details on how to do this. This blog assumes users have installed the “LPE”. The LPE’s installation files are available on the TruePlanning installation media. The LPE is an Excel plug-in which means it will create a menu in Excel which is always ...
Original Post Date: July 1, 2015   Introduction A new version of PRICE’s Excel Add-in for TruePlanning, the Large Project Engine (LPE) has been created that allows users to select TruePlanning project files as well as projects in the database.   Usage When selecting a behavior in the LPE that targets a TruePlanning project, users can now pick TruePlanning project files (*.tpprj) files as well as TruePlanning projects that are stored in the database. Operations that support this can be identified by the small down arrow in the ribbon menu buttons which indicates a ‘split button’. When the buttons are used, users are given ...
Original Post Date: July 1, 2015 Introduction                Consumers of cost estimates need to understand how risk  and uncertainty impacts their estimates and, as such, performing Monte Carlo analysis is becoming a required step in producing a cost estimate at many organizations. One of the most popular Monte Carlo tools is Oracle’s Crystal Ball and PRICE has produced an Excel based solution that allows users to perform Monte Carlo analysis on their TruePlanning estimates. With this combined solution users can run risk/uncertainty analysis on their parametric estimates using an industry standard tool. The Issue In the TruePlanning/Crystal Ball solution, users select TruePlanning ...
I wanted to share a spreadsheet I’ve put together that helps with learning curve calculations and pulling out multiple production lot data showing the learning effects.  It provides useful lot information such as lot average unit cost and lot total costs with the effects of learning curves, escalation, and everything else factored in.  It also has a tab for doing some basic learning curve calculations in multiple lot scenarios by hand and viewing a set of useful metrics. We want all of this kind of information to be available in TruePlanning for the next release.  We’ll have new multiple production ...
Introduction Phoenix Integration’s ModelCenter application provides users an environment where they can mix a variety of software applications together to perform analysis and trade-off studies.  PRICE’s TruePlanning cost estimation software was one of the first application to have a dedicated plug-in created to be used in ModelCenter. This document provides guidance on how to install and use the TruePlanning plug-in for ModelCenter. For more information on using the ModelCenter application, please consult the ModelCenter documentation. Installation Versions: TruePlanning versions are considered independent applications and can be installed ‘side by side’. The same is true for the TruePlanning plug-in to ModelCenter.  As seen ...
In my last blog we considered nine characteristics of a credible cost estimate and identified the ones in which shortfalls were most frequent in my experience as a senior reviewer of Army cost estimates.  In this blog, I will address the clear identification of task, and thoughts to reduce the chance of shortfalls of this characteristic. Clear identification of task, as described in the March 2009 Government Accountability Office (GAO) Cost Estimating and Assessment Guide.  Estimator must be provided with the system description, ground rules and assumptions, and technical and performance characteristics Estimate's ...
Original Post Date: Wednesday, April 14, 2010 The first time I remember hearing the term, “data driven estimating,” was at an ISPA/SCEA conference in Phoenix about 6 years ago. I thought I had a pretty good concept of what that meant. Then, I started hearing it more frequently about 6 to 9 months ago, and I wasn’t as sure of my understanding. So, I went to the Internet and Googled, “Data Driven Estimating.”  The first 3 pages yield links to statistical, engineering, and technical estimating founded on data; e.g. packet routing, data delivery rate, radar and rain gage data, ...
Original Post Date: Friday, July 9, 2010  While sitting in the operatory chair yesterday, my dentist said something that made me stop. He was complaining about an increasing rate of incompetence and apathy he observes in those delivering services to him. And while I do agree with him in principal, he and I are of the age where some folks label us as grumpy old men. So, it may not be as bad as we think. Regardless, the statement he said he made to the an unfortunate poor-quality service provider was, “If you don’t have the time to do it ...
Original Post Date: Wednesday, November 3, 2010 The midterm elections are finally over. The themes of reduced spending and lower taxes showed up in force at the ballot box. But what does that mean for the defense industry? The U.S. Secretary of Defense, Robert Gates, caused quite a stir when he announced his proposals for reigning in defense spending. There are the expected assortment of eliminations (U.S. Joint Forces Command and Business transformation Agency to name two), reductions (in service support contracts, number of senior civilian executive and general/admiral military officers, and funding for intelligence community advisory contracts), freezes (of ...
Original Post Date: Wednesday, May 12, 2010 From my perspective as a cost researcher, the calibration tool is one of the most powerful analysis capabilities built into the TruePlanning cost management software . One way I can use this tool is to go back to an old estimate for a project that is now completed, and analyze the correctness of the previously entered input values. With this analysis, I can find ways to improve our methods of soliciting input values from the user to ensure the best values are entered the next time. This way, the TruePlanning models keep getting “smarter” as new information ...
Original Post Date: Friday, June 4, 2010 One of the great features of the TruePlanning cost management software is the fact that it makes it easy to handle complications of inflation and estimating projects performed in different countries and currencies. The costs associated with doing work in different countries, and the relative value of different currencies is constantly changing. To address this, the cost research team at PRICE does an annual economic update performed by the cost research team, and this blog will introduce some of basic concepts and research that goes into maintaining this feature every year. The price of goods and ...
Original Post Date: Monday, April 26, 2010  With so many acquisition programs over budget and behind schedule, the term “Cost Realism” is suddenly very popular. In my experience as an estimator on many major acquisition programs, two things have remained certain over years (besides death and taxes). First, the probability of the program ever achieving the original cost estimate is exactly zero and second, the more information that is known about a program, the more it will exceed its original cost estimate.    With that said, the move to Cost Realism is so important because it recognizes these two fundamental ...
Original Post Date: Wednesday, June 30, 2010  I recently had the opportunity to work directly for one of our clients on a high visibility, must-win proposal. The contractor was just about ready to commit to the bid number, but wanted to know the likely bids of the other two performers. We were asked to do a “Ghosting the Competition” study where we ethically collect open source data on two competing designs and combined with engineering technical data to develop a best cost estimate of the competitor’s bid positions.   Unfortunately, not much intelligence was known about the competing configurations, but the ...
Original Post Date: Tuesday, July 20, 2010 Next month (8/4 @ 12pm EST) I am presenting a webinar to discuss using TruePlanning on Source Selections. What prompted me to develop this webinar were the many recent success stories I’ve had using TruePlanning during the Source Selection process. Going a bit further, I am going to show an actual case study where TruePlanning was used to conduct an Analysis of Alternatives (AoA) exercise – along with cost/effectiveness results. We will explore a bit about the technical side of the proposed designs, develop the modeling in TruePlanning and discuss the results. In addition, we will explore ...
Original Post Date: Wednesday, September 1, 2010 I had expected to present my webinar,  “Best Practices for Cost Effectiveness Studies using TruePlanning” in early August. As you might know, I was planning to show a real world example from a recent engagement with a government customer. Unfortunately, since the Source Selection has not concluded with a downselect, I was not able to obtain the public release in time. However, for this month’s blog I will continue share some of the highlights of the webinar.   In last month’s blog we explored the uses of TruePlanning during Source Selection from the Supplier’s (or ...
Original Post Date: Tuesday, October 12, 2010 When I glanced at the Washington Post on Sunday, the following headline screamed out: Defense cuts could slow D.C. economy for years The article basically covers how Defense Secretary Robert M. Gates is calling for reducing spending on "support contractors" by 10 percent each of the next three years as the Defense budget shrinks. As Washington DC is a hub for these types of companies, the impact is expected to be significant. According to the article, more than a quarter of national defense spending contains of outlays for service contracts. Among the largest companies ...
Original Post Date: Wednesday, November 10, 2010 I was recently struck by Ash Carter’s (Under Secretary of Defense for Acquisition, Technology & Logistics) Memorandum for Acquisition Professionals, Better Buying Power: Guidance for Obtaining Greater Efficiency and Productivity in Defense Spending (14 September 2010). Within this broad sweeping memo, Ash Carter outlines 23 principal actions in five major areas aimed at increasing efficiency in Defense acquisition.  The first major area covered is “Target Affordability and Control Cost Growth”. Within this major area, program managers must treat affordability as a requirement before milestone authority is granted to proceed (starting with Milestone A). This ...
Original Post Date: Friday, December 17, 2010 In last month’s blog I wrote about Ash Carter’s (Under Secretary of Defense for Acquisition, Technology & Logistics) Memorandum for Acquisition Professionals, Better Buying Power: Guidance for Obtaining Greater Efficiency and Productivity in Defense Spending (14 September 2010). I concluded the TruePlanning unified framework and comprehensive cost models, is a tool very well suited to provide the types of analysis outlined in the memorandum. In terms of Should Cost and Independent Cost Estimates (ICE), TruePlanning estimation software provides the industry standard capability to conduct Should Cost and calibration (actual program history) for ICE. Most ...
Original Post Date: Wednesday, June 23, 2010 Parametric modeling is excellent for all aspects of early-concept cost estimation, including go/no-go decisions downstream. So, in the spirit of bringing a transparency to (ethical) financial engineering… why not apply our craft to pricing “real-options”? The latter are essentially strategic opportunities for engaging resources (cost/schedule) into projects, ventures, investments, or even abandonments. The opportunity choice has value itself!  Unlike static project Net Present Value (often, but not exclusively, approximated with Discounted Cash Flow) assuming pre-defined decisions, real-options reflect the merit of flexibility. If an R&D or proof-of-concept presents viability/ marketability learning, the option has positive value, above ...
Original Post Date: Friday, June 25, 2010  Like titanium and other exotic metal-materials, “composites” (by definition, combinations of materials) offer significant weight-savings and reduced part counts, but at a price of high production cost. Sound contrarian to our parametric cost estimating view?   Not really. Complexity of manufacture is quite higher. Likewise process index and structural tooling values grow. Plus, design lead times drive developmental cycles. That said, understand that composites represent more than a material type. They can involve a highly labor-intensive approach to preparing, braiding/ winding, molding, bonding and modular assemblage. Yes, some aspects of braiding and molding lend themselves to automation—which then drives tooling ...
Original Post Date: Thursday, October 7, 2010 Ahhhh, the 80s… a challenging (but often confusing) time in an evolving computing world.  Working in 1985 as a software estimator as well as SQA engineer in a quality assurance department that “audited” real-time projects using new concepts like OOD & OOP… well, you get the picture.  It was a great time to get immersed into great work.  And the good news:  that company’s process as well as its developers were bullish on a young estimation/ quality types asking plenty of questions… as long as they were of the Yes-No variety.  And ...
Original Post Date: Monday, December 6, 2010  In his August blog-entry here, Zach Jasnoff outlined typical client perspectives for the different types of analyses that TruePlanning can accommodate. Working on a large project, we’ve experienced situations that, realistically, can happen where the initial intent and model structuring later have the boundaries of model appropriateness stretched. An Analysis of Alternatives (AoA), for example, is meant to measure deltas between baseline and its alternatives. If common costs “wash” then they can be excluded… which becomes an issue when treated as a Rough Order Magnitude for customer budgeting.  Likewise, if a ROM or Independent Cost Estimate ...
Original Post Date: Tuesday, August 24, 2010 Over the past several weeks several users have inquired about the best way to estimate costs associated with porting existing software to a new hardware environment. Normally for this situation some of the existing software will require some amount of adaptation to operate on a new server. However, a large portion of the existing software will only require integration into the new environment.   Estimating software costs associated with the above will require the use of several cost objects: - Systems cost object if program management, Quality Assurance, configuration, and    documentation costs are to be included in ...
Original Post Date: Tuesday, April 20, 2010 In September of 2009 the United States Government Accountability Office (GAO) submitted a report[1] discussing the lack of robust Analysis of Alternatives for weapons systems. The report indicated that … “Cost, schedule, and performance problems in the Department of Defense’s (DOD) weapon system programs are serious. Why is it that DoD weapons programs experience a simultaneous cost growth and performance degradation? I believe the answer is found in unrealistic cost estimates and schedule estimates mostly driven by pressure to win a program within a certain budget constraint. Excessive requirements change either through poor ...
Original Post Date: Monday, June 7, 2010 Currently we are exploring the best approach to including a more comprehensive cost estimate for Total Ownership Costs (TOC) into TruePlanning. The current version of the software has focused on development and production costs with some life cycle costing including. The life cycle costs included are focused on the system specific O&S costs such as initial spares for priming the supply pipeline, maintenance, replenishment spares, etc. It is a system view as opposed to a program view of TOC. As we better understand the need to conduct affordability studies it has become clear that design decisions ...
Original Post Date: Thursday, July 15, 2010  “I know that you believe you understand what you think I said, but I'm not sure you realize that what you heard is not what I meant.” This is a famous quote by author and US. State Department spokesman Robert McCloskey (September 15, 1914 – June 30 2003) and was attributed to him by Marvin Kalb, a CBS reporter, in TV Guide 31 March 1984. This quote was in reference to a press briefing during the Vietnam War. What it really addresses is the ease to which the communication of the meaning / understanding ...
Original Post Date: Wednesday, September 29, 2010 In May of this year the Washington Post published an editorial article on the need to reduce waste in the Defense Department. The byline of the article was “Defense Secretary Gates’s war of necessity against wasteful spending.” In this article the writer points out that the secretary is taking on the challenge of maintaining our military force [at reasonable level of effectiveness] during a time in which the President and Congress are seeking cost savings / reductions based on the decrease in our presence in Iraq.  Mr. Gates goal is to look for efficiencies ...