Final Version of the GAO Cost Guide
It appears that this is the final version of the GAO cost estimating guide which provides guidance on preparing viable cost estimates both early in the process and throughout the life cycle. Congratulations to the team. This is a great contribution to the industry and can, if used as intended create more successful projects. I especially appreciate the focus on preparing a viable estimate of cost, schedule, etc. then applying earned value management (EVM) to that. So often, in the past we have seen a chasm between those that generated estimates and the EVM people. These are two sides of the same coin.  The introduction follows:
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page or call us at +1 310 414-3222.
Related Posts Computer Generated
Black Swans: The Impact of the Highly Improbable
Before the exploration of Australia by Europeans, people thought all swans were white. This assumption seemed completely confirmed by empirical evidence. Then in Australia, an outlier… black swans. This inconsequential event illustrates the limitation of learning by experience and assuming we know and understand uncertainty. Galorath’s Evin Stump and his work in Xippr (Experience Informed Project Risk Reduction; pronounced “zipper”), has been preaching about Black Swans for some time and convinced me to read Nassim Nicholas Taleb’s book “The Black Swan: The Impact of the Highly Improbable.” A Black Swan is:
1. An outlier, because lies outside the realm of regular expectations, because history cannot convincingly point to the possibility
2. Has an extreme impact if it occurs
Traditional risk analysis, such as Monte Carlo Analysis is excellent at predicting probability in terms of uncertainty, except for one thing…. it completely misses Black Swans. So we continue to invest our money with money managers who predict regular growth… with statistical worst cases not so bad… but then Black Swan occurs…. a highly improbable event,  banking crisis or whatever, and wipes out a significant portion of the nation’s wealth. The impact of Black Swans was not included in the financial analysis.  Or airplanes crash into the World Trade Towers. And the world changes forever.
Now we need to know when to deal with Black Swans and when they are just paranoia. For an average project there may not be any real Black Swans. But for the most difficult projects, for example projects with low Technology Readiness Levels or with severe political implications,  a Black Swan can be a significant driver.
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page or call us at +1 310 414-3222.
Related Posts Computer Generated
ROI: Return on Investment or Risk On Investment
I find it fascinating how people sometimes determine return on investment on a project.
As you already know Return On Investment provides the monetary benefit of spending on a project. Understanding the true Return On Investment helps make good decisions on which projects to fund, which to kill, etc.
Unfortunately many people deal with ROI as Risk on Investment. Risk On Investment starts out with good intentions. Because we are engineers we can find all kinds of ways to make our software “better.” But if “better” doesn’t matter to stakeholders, or if we do a poor job quantifying the costs or the benefits we can mislead ourselves and out organizations.
I recall one of the worst examples I have witnessed. The developers determined there was a way to make each of many thousands of workers more efficient in filling out their time cards. They rejoiced at the thought of saving each of the thousands of employees over a minute each per day. That is thousands of minutes and dozens of hours per day, they determined. So the project began, overran, and when finally delivered didn’t make any difference in the corporation. People work a day in a  day. That minute was meaningless. This should have been caught up-front. But no meaningful process for ROI was in place.
Using effectiveness metrics to determine ROI can help… that is how much the project will impact profits.
I have been interested to see how people are using SEER’s estimate by comparison function to determine the probable Return On Investment on projects. Some even determine the cost of a potential portfolio, and the value and use these as critical for choosing which projects to fund.
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page or call us at +1 310 414-3222.
Related Posts Computer Generated
Practical Software Measurement Conference June 22- Orlando
Â
Â
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page or call us at +1 310 414-3222.
Related Posts Computer Generated
The Cost of a New Project Manager’s Failure
Paul Glen says, on tech republic, that project managers need failure. But how to estimate the cost of such failures. Obviously, don’t put the new project manager on a critical project so there is not a huge loss to the company.
“Nothing succeeds like success, except in project management where nothing succeeds like failure. Managing an IT project is very difficult, especially the first time you try it. The project manager’s days and nights are filled with stress, worry, dreams, aspirations, and fear. Some first timers are overwhelmed by their newfound power, while some are weighed down by the responsibility. But for most, the overriding concern is to avoid both personal and project failure.
This fear is often instilled and/or reinforced by the project manager’s supervisor. The new assignment is often initiated with comments like, “Don’t screw this up.” “This is your big chance to shine.” Or, “don’t make me look bad and regret giving you this opportunity.” Trust me, those sorts of comments really help first timers succeed.
For the project manager, this sort of fear is not only counterproductive, but also misplaced. In fact, I think that every first time project manager desperately needs to fail. That’s right. I’m not just saying that it’s ok to fail; I’m saying that if they don’t fail, they may never learn to be effective project managers. In fact, complete success may set their management careers back by years.”
So what is the cost of that failure… Lost effort, schedule, opportunity costs of doing something successful, loss of the ROI of the unsuccessful project. Big numbers. So… if you are letting a project manager build a project so he or she can fail… have a second team build one that will work.. or make sure it is not a mission critical project.
I must say I cant think of a project in my career that has failed, assuming failure means never delivered the required functionality. Some took longer… were challenged. Some we worked a lot of overtime. But we never failed to deliver. Certainly there were smaller failures along the way: schedule slips, deferred functionality, etc. So what is the cost of little stepwise failures. Some of those are inherent in IT projects. So I suppose the cost of those is zero.
Â
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page or call us at +1 310 414-3222.
Related Posts Computer Generated
Guidelines and Metrics for Assessing Space System Cost Estimates
I recently saw a presentation by Bernie Fox of Rand regarding guidelines and metrics for assessing space system cost estimates. Very interesting presentation (if you are interested in space systems)
The paper includes:
- Â Average costs and ranges for space vehicles, subsystems, and components for crosschecks.. Powerful Read more
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page or call us at +1 310 414-3222.
Related Posts Computer Generated
Applying Earned Value Management to Software Intensive Programs Part 4
For paper with figures see Applying Earned Value Management To Software Intensive Programs Final   This article was originally published in the Software Tech News, Volume 12, No. 1, April 2009.  The web site for more information about this publication is www.softwaretechnews.com  This paper illustrates how to achieve more successful projects with estimation, planning and control. Cost estimating as well as effort, schedule, and risk are included with illustrations from SEER for Software (SEER-SEM)
Using an analytic process to project cost and schedule based on actual performance
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page or call us at +1 310 414-3222.
Related Posts Computer Generated
Dan Speaking at Detroit CAI Seminar
I will be speaking one estimating process yielding project success at the Computer Aid Seminar in Detroit On April 30, 2009.
My message will be that spending time on estimation and planning yields more successful projects and fewer project surprises. And I will go through the 10 step process. Additionally I will introduce Galorath’s estimation maturity model.
I am excited to speak along with Ed Yourdon, Larry Dribin, and CAI’s Bob Longhorn.
It should be a great event. I have participated in these with Larry and Bob in the past, and I am a lifetime fan of Ed.
I believe we will be doing the same genre in Toronto later in the year.
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page or call us at +1 310 414-3222.
Related Posts Computer Generated
Applying Earned Value Management to Software Intensive Programs Part 3
For paper with figures see Applying Earned Value Management To Software Intensive Programs Final
Â
Applying Performance-Based Earned Value (PBEV)
Â
Performance-Based Earned Value® (PBEV) is an enhancement to the Earned Value Management Systems (EVMS) standard[1]. PBEV overcomes the standard’s shortcomings with regard to measuring technical performance and quality (quality gap). PBEV  is based on standards and models for systems engineering, software engineering, and project management that emphasize quality. The distinguishing feature of PBEV is its focus on the customer requirements. PBEV provides principles and guidance for cost effective processes that specify the most effective measures of cost, schedule, and product quality performance.
Â
Program managers expect accurate reporting of integrated cost, schedule, and technical performance when the supplier’s EVMS procedure complies with the EVMS Standard.  However, EVM data will be reliable and accurate only if the following occurs:
·        The indicated quality of the evolving product is measured.
·        The right base measures of technical performance are selected.
·        Progress is objectively assessed.
Â
Using EVM also incurs significant costs. However, if you are measuring the wrong things or not measuring the right way, than EVM may be more costly to administer and may provide less management value[2]. Read more
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page or call us at +1 310 414-3222.
Related Posts Computer Generated
Twitter: Time Waster or Boon?
I have received a number of requests via a twitter account I setup but never used. One of my heroes, Ed Yourdon is very high on twitter.   From my glance Twitter is pretty much broadcast txt messages to people that “follow.”
But my own observation, as I participated in a Webex I couldn’t help but notice the regular, trivial, annoying comments on the presenter’s screen. I asked him what that was and found it was tweets from Twitter. Neither the audience nor the presenter could have cared less about the information (one was something about the sender getting ice cream or something as I recall.)  So I dismissed Twitter as an annoyance.
Then I started seeing people possibly useful information.  For example I was asked to provide a Tweet containing project management wisdom. The organizer has asked 140 people to provide 140 character or less twits. He believes the result will be a Twitter book.Â
And I have seen some information providers offering to be followed via Twitter.  I still haven’t started using my Twitter account. But I am having dinner with Ed Yourdon soon. Perhaps I will be converted afterwards.
What do you all think of tweets on estimating? Or project planning?Â
How about your project team being updated via tweets? (hold the ice cream)
Update June 2009
I have been using twitter for some time now. I have mixed feelings. On one hand I see a lot of interesting content I would otherwise miss. The most bizarre was a blog post from another of my blogs “Krav Maga from a novice” THe post came from some unknown Krav Maga student. It covered a topic I just wrote about so I was thrilled to open the blog and read it. What a surprise when I found the Krav Maga student had sent out a tweet about MY blog entry and pointed to my BLOG. I suppose I should be flattered that my content was being distributed as it was. But it was really only a draft.
Â
I find looking at it once per day keeps me from getting weighted down with the details people post.  ANd when we have a big earthquake I went to twitter to get the most up to the minute reports.
I think it is worthwhile but I can see it becoming a distraction if not managed.
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page or call us at +1 310 414-3222.