by Bill Williamson
| August 16, 2016
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 with price to meet customer needs. A product is affordable if it meets customer’s needs, is within the customer’s budget and is perceived as the best value among all available alternatives. The four pillars of the Affordability Process are, what I have found in my 30 years in the Defense Business, the keys needed to make an Affordability Program successful for a DoD Program. The four pillars of Affordability are:
1. Management Support
Management Support is the most important element of a successful Affordability Program. Management commitment to the Affordability Process determines whether a successful Affordability Program matters to a Program and will take place. With any process, the greatest challenge to success is obtaining Management Support.
Methodology refers to the importance of a written Affordability Methodology, a defined Affordability process, and standardized reports. A written Affordability Methodology establishes the legitimacy, authority, and requirements for Affordability to be applied on a program. An organized process that helps set cost goals and measures and rewards progress towards the goals is essential to its success.
Training is important because it teaches both Management and the Affordability Integrated Product Team (IPT) Members the what, why, who, when, where, and how of Affordability use and application on a program. By standardizing the Affordability Process, it is easier for IPT Members to speak the same language regarding cost reduction.
Tools/Automation defines the automated tools, such as PRICE TruePlanning, that should be used to perform cost estimation as part of the Affordability Process. It also talks about the Professional Cost Estimators and Affordability Experts that make the functioning of the Affordability Process easier and more effective.
In my next blog I will write about the details of Management Support and why it is so important to the success of an Affordability Program.