2009 Estimating United Conference

Galorath Conducts 5th Worldwide Conference on Project Estimation: Estimating United

On March 19th, 2009, Galorath conducted its 5th annual worldwide conference on project estimating. The conference title, Estimating United, was fitting both for its venue and content. The venue was Old Trafford, Manchester, United Kingdom, home of the world famous Manchester United Football Team. The content included presentations in two tracks from a variety of world class company participants, all united in their efforts to improve project estimation practices. Presentations covered a variety of topics in the area of project estimation, planning and control.

In recognition of their contributions to project estimation, two awards were presented at this year’s conference — one to Charles Symonds for his outstanding work and contributions in the field of software estimation and the second to Alan Jones of BAE Systems for his continued efforts to provide both a platform of knowledge for less experienced cost engineers and for his dedication to the Association of Cost Engineers activities to bring to our profession a “tiered approach to accreditation.” They join past recipients of this award which include Raj Roy, Cranfield University; David Reuss, Rolls Royce; and John Henson, AgustaWestland.

The 2nd SEER conference of the 2009 series will be held in El Segundo, CA on October 8th and 9th, 2009.

Presentations

Life Cycle Costing Capability in an International Organisation for Armament Cooperation

OCCAR-EA is an International organisation with full legal personality since 2001. It was created to co-ordinate, control and implement co-operative armament programmes that are assigned to it by the Member States. Today OCCAR is managing 7 Programmes with a total portfolio of 44 billions Euros. OCCAR is clearly tasked from its Convention to identify Cost Effective options to the nations both during Development and Production and for the In Service Phase of a Programme.  In this frame, OCCAR-EA has developed a Life Cycle Costing capability within the general approach of Through Life Management.  This allows the identification of common and cost effective solutions and informs the decision makers on these opportunities. The presentation will show the steps followed to set up this capability and will point out the specifics linked to an international Agency, a snapshot of the process in place, and the types of studies that have been performed.

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The Value of Cost Estimating for Cost Management

Costs are determined in the very early stages of the Product Creation Process. Not using this fact, but only to focus on ‘solving technical puzzles’ or stressing Time-to-Market is a missed opportunity that in the end makes the business less competitive. In many companies Cost estimation can be a very valuable tool for purchasing in determining the ‘should cost’ if only used in this way however cost estimation becomes a ‘purchasing tool’ only.

Changing to Target Costing means: Define the Customer Value before development starts, and derive the Target Cost from this. Then start studies to address the economic feasibility of new products, using cost estimation and cost driver analysis. This way cost estimation becomes a strategic decision support tool with less need to repair costs later on.

Goof will address the following during his presentation:

  • How we used to address costs (not)
  • Change to Target Costing
  • Role of Cost Estimation for target costing
  • Some Examples of Cost Reduction achievements using Cost Estimation
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Procurement Costs – Transparency and Assurance

Procured Equipment, Material and Services represents over two thirds of the initial cost of a military air platform and the resulting through life support activity. In the current climate of partnering and price transparency linked to a business environment increasingly focussed on ethical conduct, commercial parametric estimating models can provide confidence for both supplier and customer through open cost modelling based on industry standards of performance.

This presentation will outline the current activity at BAE Systems – Military Air Solutions aimed at achieving these goals.

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Understanding the Mysteries of MOD Support Costs

The costs incurred during the service life of equipment are a significant proportion of the whole life cost. However, these costs are not well understood and there are inconsistencies within the MOD as to how these are collected, collated and used. These costs are also used within the analysis at Dstl to inform high level Balance of Investment (BOI) decisions and it is therefore imperative that these costs are included as accurately as possible. The Support Costs study, funded by Director Equipment Plans (DEP), was commissioned to address this problem.

The presentation will cover how the project team tackled the problem and explore some of the conclusions from the work.

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Embedding Galorath’s Estimating Tools into a Project & Programme Management Suite

In this presentation we will show how the Galorath estimating tools have been integrated into Ninth Wave’s Project & Programme Management (PPM) suite.

In most PPM products estimates for projects are entered manually and there is no audit trail provided for senior managers to see how the estimate was derived. Ninth Wave has enhanced its PPM suite to be able to generate an estimate automatically into a project by using the Galorath products in a “black box” fashion.

The key benefits of this integrated approach are:

  • estimating best practice is embedded into project management across the organisation
  • drill-down capability to understand key inputs and drivers for an estimate
  • ability to model different scenarios with just a couple of mouse clicks
  • audit trail provided for all steps associated with generating an estimate
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Software Sizing – the weakest link of estimating?

Charles Symons presents data on the performance of the software industry which in certain respects is dreadful. Evidence will be shown suggesting that this poor performance is at least partly due to weaknesses in performance measurements and in estimating. By "estimating", we mean:

  • initial estimation of the product size,
  • methods for estimating project effort and duration from the initial size,
  • processes by which estimating is integrated with project management,

where the first of these elements is the weakest link (though the third is also often weak).

The talk will then trace the development of methods of sizing software from using SLOC, to Albrecht’s idea of sizing functionality (now the IFPUG method), to the COSMIC method. Charles will briefly compare these methods and show how the COSMIC method overcomes weaknesses of earlier approaches.

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What’s New and “Dan Galorath on Estimating”

What's new and what's coming in SEER will be featured.

Additionally Dan will discuss selections from his blog. Dan will discuss selections from metrics, effectiveness measurement, the real costs of a variety of undertakings, what is ITIL versus ISO 9000, the risk of IT projects, what the assets of failed banks really are worth, and lots more. He weighs in on a wealth of topics both timeless and contemporary.

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Computer-aided Business Case Assessment in Engineering Design Education

In all engineering initiatives the only acceptable basis for launching a product development programme is one in which low risk and high return-on-investment in the shortest possible timeline is secured. Up to 80% of the life-cycle cost of most high valued-added engineered products is incurred during the conceptual design phase, and, by the time completion of the design and development stage occurs 95% of the product cost is fixed and most of the development cost is spent. The University of Bristol, Department of Aerospace Engineering, and, the Department of Engineering Mathematics via its Engineering Design degree programme offer many examples of group project orientated education for undergraduates. The major student group projects for academic year 2008/09 include: (1) Airbus UK project “250-passenger Transport Aircraft Optimised for Multi-stop, Long-range Operations; (2) Arup project “Elevated Transport and Entertainment Ride System”; (3) Motorola project “Water Powered Pico Generator for a Mobile Phone Base Station”; (4) Hewlett-Packard project “Personal Carbon Footprint System”; (5) GE Aviation project “Automation of Pitch Control of a Propeller Engine; and, (6) Babcock project “Design Optimisation of a Nuclear Flask ‘Grab’ System”. A review of business case results from the aforementioned student group project work using the Galorath SEER-H cost estimation software will be presented.

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Decisions, (Multi-Criterion, Subjective, unbounded), Decisions

The primary objective of this paper is to introduce two alternative methods, Absolute and Empirical Referencing, used to minimize the subjectivity surrounding some of the more crucial processes associated with project management and analysis. The Estimate by Comparison solution developed by Galorath Incorporated will be used as the vehicle to illustrate comparative sizing for the purposes of Parametric Estimation along with a few other more contemporary applications.

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Estimation in ERP Environments
  • Organisations have ambitious plans when purchasing ERP
  • More than 75% believe in quick wins and grand return of investment
  • In practice one will go a long way of learning
  • 30% - 70% cost reduction is possible
  • Therefore one needs a strong strategy in standardisation, developing
  • Kknowing the pitfalls and monitoring the principal cost drivers are essential
  • Benchmarking and estimating the projects and their environments will bring success
  • Example insurance company:
    • Starting up with conventional planning and estimating
    • Gathering facts and figures
    • Switching to ERP environment planning
    • Building up company specific planning data
    • Creating private knowledge base
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The 12 Sins of Estimation

Sin is a term used mainly in a religious context to describe an act that violates a moral code of conduct or the state of having committed such a violation. In monotheistic religions, the code of conduct is determined by God. Colloquially, any thought, word, or act considered immoral, harmful, or alternative might be termed "sinful". Knowingly, and unknowingly, we as estimation experts commit sins in the area of Estimation, leading to harmful effects on the project management, tracking and control. With the premise that not doing wrong things is a way to do the right, the presentation highlights the common sins committed by experts in the field of estimation.

Taking into account the current practical realities of business, the presentation explains how we can improve the process of estimation, and how to gather the critical mass required to make change happen in an organization.>/p>

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Biographies

In May 2001, Carl Dalton was appointed the Managing Director responsible for International Operations for Galorath; the US organization responsible for the SEER suite of tools. Prior to that, he was a Partner/Owner at HVR Consulting Services Ltd. He held various positions at HVR in the UK including Decision Support Group Director, where he directed the cost, risk and safety consultancy groups, Marketing Director as well as Vice-President Operations for HVR Canada Inc. Carl had joined HVR in 1989 from Theta Analysis and Systems Ltd, where he was a Principal Consultant in Cost and Risk Analysis. Previous to that he was a Cost Engineer within the UK MoD(PE), now DE&S.

Goof Pruijsen studied experimental physics at Utrecht University. He gained experience in research and development as developer, project leader and department head. After that he switched to marketing and spent several years in the fire security and medical industries. He set up and implemented the target cost approach in Philips Medical Systems as part of the supply management department and used it to facilitate many new products developments including early supplier involvement; cost reduction projects and negotiation support by analysing and benchmarking supplier cost models. In recent years he has spread the knowledge of and supported the implementation of target costing, value engineering in other business units of Philips.

Franck Ramaroson is a Wing Commander (R) in the French Air Force and has been seconded in OCCAR-EA since August 2005 as Integrated Logistic Support (ILS) and In Service Support Officer (ISS) in the Central Office, Bonn (Germany). He is dealing with ILS/ISS strategy, policy and doctrine and their implementations to the Programmes managed by OCCAR. In particular, he has been in charge of the development of Life Cycle Costing Capability for the Organisation and now he is managing it. Prior to OCCAR-EA he had been working in the French Air Force at operational level (chief of a maintenance unit during 5 years) and in the headquarters (Air Force Support Agency, Information Management System Team). He is M.Sc in Engineering (Ecole de l’air)and M.A in Middle East Geopolitics from the Institute for Oriental Language and Civilisation (INaLCO) in Paris. He is married and has 2 children.

Mark Gornall joined BAE Systems – Military Air Solutions in 2007 as Cost Assurance Manager for Procurement. This role followed 10 years with the MoD Pricing and Forecasting group initially on Cost Engineering investigations, moving then to an internal consultancy role, providing advice on the capacity and capabilities of the military fixed wing sector as an input to the Defence Industrial Strategy. He has Certified Cost Estimator/Analyst (CCE/A) status through the Society of Cost Estimating & Analysis (SCEA) and is a trained assessor on the Cost Engineering Capability Improvement Model (CECIM).

Neil Morrill is a Study Leader working for the Policy and Capability Studies Department of the Defence Science and Technology Laboratory (Dstl), where he has been since 1996. His work mainly involves providing costing support to High Level Operational Analysis (HLOA) carried out at Dstl. His current work includes leading the Support Costs Study looking to improve support costs used in HLOA and being the Software Model Custodian for the Force Structure Cost Model (FSCM). Prior to working for Dstl he worked for a time in Local Government, after graduating in mathematics at Nottingham University.

Steve Robinson has 12 years experience working with the UK MoD, for the bulk of his career to date he has been involved with business process re-engineering projects and cost benefit modelling. Prior to joining Galorath in August 2008, Steve was a business manager for a small technical consultancy specialising in conducting performance measurement activities, cost-benefit analysis, value-for-money analysis and developing key performance indicators (KPI). As part of Galorath Steve works within services and sales and is principally engaged with the Defence Science and Technology Laboratory (DSTL) advising the MoD on project estimation and lifecycle project costs.

Andy Robinson has been working in the field of software development for the past 20 years, supporting large scale software projects. He has been involved in project management for a number of blue-chip companies across many industry sectors, including Banking, Insurance, Aerospace & Defence and Telecommunications.

Charles Symons has almost 50 years experience in the use of computers for business and scientific purposes, in both public and private sectors, in all the major disciplines of the Information Systems function. He has published original work in computer use accounting, data analysis, computer security, and software measurement and estimating. As a management consultant, he led projects on IS strategy and to improve the performance of the IS function in many parts of the world. His interest in software measurement and estimating began in the 1980’s when he developed the MkII FP sizing and estimating methods. He is now semi-retired, but continues as joint project leader of COSMIC, the Common Software Measurement International Consortium. This informal grouping of software metrics experts has developed a software functional size measurement method applicable to business, real-time and infrastructure software.

During his over three decades in the industry, Daniel D. Galorath has been solving a variety of management, costing, systems, and software problems for both information technology and embedded systems. He has performed all aspects of software development and software management. One of his strengths has been reorganizing troubled software projects, assessing their progress applying methodology and plans for completion and estimated cost to complete. He has personally managed some of these projects to successful completion. He has created and implemented software management policies, and reorganized (as well as designed and managed) development projects. His company, Galorath Incorporated, has developed tools, methods, and training for software cost, schedule, risk analysis, and management decision support. He is one of the principal developers of the SEER-SEM™ software evaluation model. His teaching experience includes development and presentation of courses in Software Cost, Schedule, and Risk Analysis; Software Management; Software Engineering; and Weapons Systems Architecture. Mr. Galorath has lectured internationally. Mr. Galorath was named winner of the 2001 International Society of Parametric Analysts (ISPA) Freiman Award. awarded to individuals who have made outstanding contributions to the theoretical or applied aspects of parametric modeling. Mr Galorath’s book “Software Sizing, Estimation, and Risk Management: When Performance Is Measured Performance Improves” was released in March 2006.

Dr. Isikveren’s professional career includes involvement in 39 aerospace design projects, aerospace research and development, aircraft performance analysis, as well as, systems and production control in airframe manufacturing. Dr. Isikveren has been employed at Hawker de Havilland Ltd in Sydney, Australia, Williams International of Michigan, USA, and, Karlebo Aviation of Sweden. He has also held positions at Saab AB in Linkoping, Sweden, and, American Airlines in Texas, USA. Finally, he spent five years at Bombardier Aerospace in Montreal, Canada as a Senior Technical Focal, Conceptual Design and Benchmarking, in the Advanced Design Department. With regards to Dr. Isikveren’s academic profile, he has performed research, teaching and supervision duties at both the Royal Institute of Technology (KTH), Stockholm, Sweden, and, Ecole Polytechnique de Montreal, Canada. In June 2005 he was appointed Senior Lecturer in Engineering Design at the University of Bristol. His responsibilities cover teaching, project and thesis supervision, and, research for the Departments of Aerospace Engineering and Engineering Mathematics. He currently holds the position of Director, Engineering Design MEng degree programme, Director, MSc in Integrated Aerospace Systems Design, and is Lead of the Aerospace Vehicle Architecture and Design Integration (AVADI) research theme.

Chris Hutchings is a Business Development Manager with Galorath Incorporated, supporting Aerospace and Defense customers in the Western U.S. Prior to this he served fifteen years with the United Kingdom Ministry of Defense, (MOD), serving in a number of roles within the Defense procurement field, including Integrated Logistic Support, Requirements Management, Systems Engineering and Cost Forecasting. Common to all of these areas was the application of a robust Risk Management process which he studied at Southampton University in the United Kingdom. Chris has provided expert support in the field of Risk Analysis to a wide range of government and commercial organizations including the UK Defense Logistics Agency, the Army Technical Support Agency, Northrop Grumman Mission Systems and the British Intelligence Department. With Galorath Incorporated, Chris played a leading role in the development of an interface between the SEER suite of solutions and the Oracle Risk Analysis application ‘Crystal Ball’ enabling Risk Analysts to take a more active role in Project Estimation and Control.

Cees Kuijpers:

Business School IT
Director Dutchsoft Technology
Specialised in Project Consultancy
Member of NESMA
12 Years Cap Gemini, 11 Years KPN Telecom,
15 Years Business Development
Segments: Insurance, Logistics, Telco, Retail marketing

Pradeep Chennavajjuala has around 15+ years of experience in the areas of Project Management and System Engineering. His focus areas of research and consulting at QAI India are Requirement Management, Software Estimation, Software Project Management, and Software Testing. He is also the core member and is responsible for the conceptualization, and development of centers of excellence in the technical areas of Project Management, Testing and Software Engineering. Prior to joining QAI, Pradeep was associated with Planetasia, Zee Telefilms, KPMG Worldwide, American Express Bank – TRS, and Birla Institute of Technology & Science, Pilani. As part of his career, Pradeep worked with academic institutions at Penn State and BITS, Pilani as their faculty member for Management, Systems Engineering and Software Engineering. Currently, Pradeep heads an independent venture of QAI in the field of Software Testing Workforce Development - namely Edista Testing Institute. Pradeep Chennavajjuala is a post-graduate in Management Systems from Penn State University, USA; a graduate in Production Engineering & Marketing from BITS, Pilani; and a Certified Software Tester (CSTE) from QAI, USA. In addition, he holds a certification on Oracle ERP Applications from Oracle Corporation, USA.

 

Awards

Alan Jones

Alan Jones has an impressive CV both academically and with regards to work experience in the field of cost engineering, cost analysis and risk management discipline areas.

His published work includes documents within the Engineering annuals and has presented at various seminars and symposium on matters of Risk Analysis, Learner Curve and Earned Value Management. He is one of a handful of people who have been inducted into the Association of Cost Engineers as a Fellow; an outstanding achievement by any means.

Alan is playing a significant role within BAE delivering training on core estimation topics to his co-workers and is also one of the prime drivers of a significant programme of work to bring about a new Accreditation towards Certified Cost Engineer level (as offered by the ACostE). This activity is also rapidly bringing about a set of professional qualification standards that we all hope will become adopted as a new NVQ in Cost Engineering.

Charles Symonds

Charles is known as an innovator and strong believer in the added value of functional sizing in the software industry. Fortunately for us, he is able to move this belief into practical and useful approaches and methods.

Examples of this can be found in the Mark II function point method. Nowadays used a little bit less and mostly in the UK, but still one of the few ISO certified sizing approaches.

Although retired, he’s still active with the more contemporary sizing approach COSMIC functional size measurement method (also ISO certified). Not just the theoretical part, but also supporting and motivating other people to take initiatives in the area of size measurement. When you consider his contribution to size measurement for software estimation there is only one conclusion possible: he deserves this reward.

Conference Photos