• Predictive Analytics for Improved Cost Management



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PRICE Cost Analytics – TruePlanning is the perfect way to do it! Model Based Engineering (MBE) environments are naturally rich with Engineering data including Computer Aided Design (CAD) drawings with Size, Weight and Power (SWAP) budgets. This data is perfect to drive parametric cost models like TruePlanning. All you need to do is create a ‘glue code’ interface to get that data out of where it currently exists, and into TruePlanning. Fortunately, COTS integration environments, like Phoenix ModelCenter, make this easy to do, where a TruePlanning ‘Plug-in’ has already been developed to provide that interface. MBE in a ModelCenter-like environment ...
This year at the International Cost Estimating and Analysis Association (ICEAA) Conference I will be talking about a journey towards a more perfect software sustainment estimate.  Many a path has been traveled on this journey but alas there are more miles to go.  My original intent in submitting this paper was to present interesting and groundbreaking results that would provide invaluable guidance to the cost community for their software sustainment efforts.  And I firmly believe that at the end of the day the project which I discuss will deliver exactly that but we’re not quite there yet.  Those of you who collect and ...
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 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 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® ...
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 ...
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 ...
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 ...
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 ...
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 ...
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 –      ...
Part 1 described 2016’s updates in the Hardware catalog’s for Unmanned Space as well as Additive manufacturing (i.e., 3D Printing). So what is else is forthcoming in TruePlanning v2016, specifically the Software catalog? We’ve done some significant things actually--  Extended sizing with a RICEFW Calculator-- This existing option enhances the “Function Points from RICE” sizing calculator option with the addition of Forms and Workflows. The former counts the forms developed to meet agencies requirements not matched by standard forms in the ERP.  The latter counts the automated business processes that integrate tasks across business units, applications and ...
In our December blog, we described the upcoming Hardware catalog’s new Equipment Type calculator, enhanced significantly with new Unmanned Space manufacturing complexities, both for Earth-Orbiting and Planetary missions.  {We also emailed all customers with a link for updating this calculator in v14.2} So what is else is forthcoming in TruePlanning v2016, specifically the Hardware catalog?  Plenty! We’ve added an Additive Manufacturing Calculator--   The calculator derives a value for Manufacturing Complexity for Structure value (based on core equations from the Hardware Component model) using inputs such as Part Weight, Part Dimensions, Material Type, Manufacturer, 3D Printer, etc. -- The user can also specify post-processing ...
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 ...
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 ...
Original Post Date: October 8, 2015 Over the last couple of months PRICE has received a number of support calls related to an inability to import or export *.tpprj files from TruePlanning. When an import or export is attempted users are receiving an error indicating a “bad parameter or missing node”. The cause of this error has been a case of a missing XML library known as the MSXML4 library. MSXML4 had been installed as part of Windows operating systems by default for years, but newer versions of XML libraries have been created and are now used exclusively so new installations ...
Original Post Date: October 8, 2015 The TruePlanning’s plug-in to Model Center has had an update to fix some issues that were found with the plug-in. - Removed extra elements that had been appearing the Model Center’s Model tree. Users were finding that as they worked with the TruePlanning plug-in, elements from the selected TruePlanning project were appearing in the Model tree with zero values. - The error displayed when the plug-in is used with a TruePlanning database with no projects saved was updated to clearly indicate that there were no projects in the database. - Links created between the TruePlanning plug-in elements ...
Original Post Date: September 30, 2015 One of our larger commercial customers asked for the ability to estimate the “learned out” Nth unit.   As always, we are here to hear you and your immediate needs.  Still in beta-test, the following is our pending new solution.  But we’d like to hear from you too here. On the "Metrics" tab, there will be an output called "Cost of Nth Unit".  This new value represents the theoretical cost of the Nth production unit, based on learning curve calculations— unless you override with your own curve values.  You will see this learned-out unit cost at ...
Original Post Date: July 2, 2015 One topic we’re focusing on for the next version of TruePlanning is supporting a variety of methods for estimating an activity.  For example, we currently have sophisticated algorithms supporting our estimation of spare units/modules/parts, which depend on characteristics of the item, as well as the operating and support (O&S) scenario described.  However, there are often good reasons for wanting to use a different method to estimate these costs, and we’d like to give users the ability to pick from a variety of methods. Many users want to be able to estimate initial spares costs before ...
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                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 ...
In our last Part I blog, we introduced the capability of estimating key-input drivers based on early-stage metrics that represent requirements.  We even produced a CER based on a data-driven multiple regression, i.e., a linear model predicting Functional Complexity based only on two Key Performance Parameters (KPPs).  So how could you do the same?  Import the spreadsheet (given last time) into TrueFindings.  Note that spreadsheet row names now become the knowledgebase “column” fields.  Now per below, the first tab-function “Distribution Finder” shows descriptive statistics for all or selected criteria— The second tab-function “Dependency Finder” allow us to observe possible simple ...
Predicting cost from requirements is a fundamental goal of parametric estimating.  Many say they do it.  But often, analogies are not based on rigor and do not represent organizational experience/productivity not capture the complexity of project deliveries driven by requirements. TruePlanning allows for calibration of the latter.  TrueFindings allows for aggregation, filtering and analysis of these calibrations.  But then what?  How can this knowledge base of calibrated metrics best be utilized? The answer is aligning knowledge of corresponding requirements that drove the costs that informed the calibrations.  In this way, we predict an appropriate set of model input-drivers based on the organization and ...
Introduction As part of PRICE’s commitment to meeting its customers’ needs, PRICE will occasionally release beta versions of its software in order to provide an urgently needed fix or enhancement for a customer or enlist the help of customers in performing final testing. TrueMapper receives frequent enhancements and customers frequently use beta versions. This blog will describe how to download, and install beta versions of TrueMapper as well as manage having multiple versions of TrueMapper on a single computer. Downloading Beta versions of TrueMapper will be made available through links on our Amazon server. Links will look something like: https://s3.amazonaws.com/CompanionApps/2014SR2/TrueMapper_14.2.5582.16609.zip To use ...
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 ...
Importance of proper PBS structure Properly organizing your Product Breakdown Structure (PBS) in TruePlanning® is a critical first step to an accurate and defensible estimate.  The fundamental questions to ask are: What are you estimating? How is the system built? Where does integration occur? The answers to these three questions will assist the estimator in developing a PBS that truly reflects the work being accomplished.  Incorrectly structured projects may result in overestimation due to unnecessary levels of integration and test.  There is also a risk of underestimation by leaving out necessary levels ...
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: Tuesday, June 15, 2010 The GAO just published a report saying that strong leadership is key to planning and executing stable weapons programs. And, evidence is presented to back the claim, including result from study of a subset of the 21% of the 2008 defense programs that were deemed stable - on track with original estimates of cost and schedule. What kind of strong leadership made these programs stable? Things like experience, continuity, and open and honest communication, knowledge-based planning, disciplined execution of plans, and establishment of realistic cost and schedule estimates that account for risk are all cited.  Here’s ...
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: Monday, October 18, 2010 Some of us remember taking the Iowa tests during our early school days. The Iowa Tests of Basic Skills (ITBS) are standardized tests provided as a service to schools by the College of Education of The University of Iowa. The tests, administered to students in grades K-8, became a national standard for measuring scholastic aptitude – I was educated in Pennsylvania. Now out of Iowa comes another test of sorts, something called an Integrity Index Score based upon a proprietary algorithm of an organization called Iowa Live. Iowa Live calls itself, “a ...
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: Thursday, June 24, 2010 "And me boss. And me boss. And me boss!" Just like Bugs Bunny tricking the mob boss into an unfair share of the loot, who doesn’t want a piece of the action. In this case the “action” is the estimate you have just finished in TruePlanning and would like to share with your coworkers. No problem, just share your project. Project sharing is a feature that is available to users who are using the Client/Server version of TruePlanning and it allows users to access projects that have been created on the centralized database by other users. If ...
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: Friday, May 21, 2010 Last month I blogged about the importance of cost realism, its roots and how as estimators we must always reflect the truth, no matter how unpopular. This month I want to share with you a recent experience on a Source Selection. As part of the Source Selection team, my role was to conduct a Cost Realism estimate on each of the performers submitting bids. I want to share with you a few insights from that experience. One of the first rules I always follow is to never ask engineers to provide data that ...
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 ...