More Software Project Failure / Challenge Information From CAI
Bob Lawhorn of CAI, one of my favorite speakers, had a list of recent software project failure information.
- Poorly defined applications (miscommunication between business and IT) contribute to a 66% project failure rate, costing U.S. businesses at least $30 billion every year (Forrester Research)
- 60% – 80% of project failures can be attributed directly to poor requirements gathering, analysis, and management (Meta Group)
- 50% are rolled back out of production (Gartner)
- 40% of problems are found by end users (Gartner)
- 25% – 40% of all spending on projects is wasted as a result of re-work (Carnegie Mellon)
- Up to 80% of budgets are consumed fixing self-inflicted problems (Dynamic Markets Limited 2007 Study)
Bob also listed reasons why projects fail including:
Requirements Issues: Unrealistic project goals, uncontrolled scope creep with no allowance for such in the plan.
Estimating Issues:Inappropriate schedule, no process to re-estimate when the project changes, no reasonableness chekcks.
Quality issues: Trying to test in quality rather than a process that implements quality throughout
Poor Team Productivity: High rework (doing the same thing multiple times due to issues with the initial work)
Project Management Issues: (Lack of planning, earned value, impact of changes and issues… No estimates so no earned value)
Cultural Issues: Hiding the bad news
Bob also touched on how their automated project office product can help with many of these issues and can integrate with Galorath’s SEER-SEM for estimation.
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.
The Estimate Maturity Model Can Improve Project Success
Dan Galorath briefed the Galorath estimate maturity model, a method of evaluating where the organization is in estimation practice and where it wants / needs to go.
This paper discusses poor estimates and their impact on projects as well as how to improve estimate maturity as a means to more successful projects.
The presentation concludes:
- Estimation and estimation process are core for successful software projects
- Improving estimate maturity can improve your project success rate
- Gartner says even SEER use improves estimate vs. actual variance by 50%
- A good guess is not a substitute for a viable estimate
- Looking at total ownership cost can change project prospective
- Much of the industry is at level 1 in estimation maturity
- Process initiatives like CMMI require:
- Estimation & planning, monitoring & control, measurement & analysis
- IT Infrastructure and IT Services are significant costs and must be estimated in addition to software development and maintenance
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.
Manufacturing Revolution, Product Development, And Cost Analysis
Jim Ryan of Computer Aid pointed out, during the SEER / Tracer alliance conference,  that the manufacturing revolution was able to provide continuous cost reductions and dramatically  lower costs.  He had examples of:
- Steel 8 hours / ton vs. 25
- GM: 28 hours per car vs. 100
- GE: Constant stream of 10% per year cost reductions
- Motorola, Et Al: Six sigma 3.4 failures per million
The way this was achieved:
- Measure like crazy
- Establish aggressive targets
- Use data to make decisions
- Recognize and reward accomplishments and progress
- Create a learning culture
- Treasure every cycle of learning
Jim points out that all these approaches apply directly to information technology but… we have not seen the revolution occur. Â He showed how IT productivity has remained flat or slightly declining over the years.
Jim also pointed out that productivity between the 1st and 4th quartile is about 6 times higher than the first quartile
The core principals of the IT revolution are:
- Defined Standard Repeatable Processes
- Process, Performance Product Metrics
- Quality Focus (Quality checks early, not just checklists at the end… code reviews, design reviews)
- Standard cost model…
- End to End process management
- Metrics
- Continuous Improvement
Jim has seen a 50% cost reduction in the work using these approaches within Computer Aid. Â These are supported by Tracer.
I (Dan) will be speaking on estimate maturity and how Similar results can be achieved by focusing on estimating process maturity. Â Estimating process maturity should be part of a mature project management process.
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.
Cost Growth In Weapons Systems Circa 1982
There is often a lot that can be learned from history. Â I ran across a 1982 paper entitled Cost Growth in Weapons System: Recent Experience And Possible Remedies cost growth for projects in all agencies reported as of September 30, 1981, was 82 percent; that for defense projects was 79 percent. Â Reviewing the recommendations for containing growth could be of interest to those looking at the new acquisition reform (WSARA)
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.
Accounting Definitions For Setup
Thanks to Galorath’s Joe Falque for providing these definitions for setup:
Setup Accounting Definition
Expenses incurred each time a batch is produced. It consists of engineering cost of setting up the production runs or machines, paperwork cost of processing the work order, and ordering cost to provide raw materials for the batch.
Production Setup
Production setup activities support an operation’s need to manufacture a diversity of products on the same equipment. Since setups are non value added, firms should seek to minimize their impact on manufacturing capacity and flexibility. World class manufacturing calls for heavy focus on setup reduction activities to support inventory reduction, capacity debottlenecking, and manufacturing flexibility. One-time portion of a production cycle in which a specific machine, work center, or assembly line is ‘made ready’ to switch from production of the last good piece of the last lot to the first good piece of the new lot, also known as change over.
Manufacturing Definition
Setup Cost
Setup costs include the labor and material to ready a machine for production. They may include the processing of work orders or a first-article inspection. Gathering of all required equipment hand and automated, tools, work orders, materials etc. which are needed to perform the manufacturing process.
Setup Cost Calculation
Setup costs are treated as a one time occurrence and that cost is divided or amortized over the batch size to be produced during the batch cycle. Each unit of the batch carries an equal share of the set up time and materials cost which are added to each unit run time and materials to calculate a total per unit cost. This cost curve on the part cost figure is high when batches are small and rapidly decreases with increasing batch quantity.
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.
Considerations for CMMI Level 4 for Systems/Software product development and deployment
From Galorath’s Dr. Denton Tarbet:
CMMIis a model that can be applied to effect a change in the way an organization (or company) performs on specific projects. The Levels of CMMI:
- Process unpredictable, poorly controlled and reactive
- Process characterized for projects and is often reactive
- Process characterized for the organization.
- Process measured and statistically controlled
- Emphasis on continuous improvement in the process with a goal of more fully meeting the cost/performance objectives of the organization.
Key activities for CMMI Level 4 include:
- Set the organizational Process Performance goals and establish a Quantitative Project Management methods to ensure processes are measured and statistically controlled.
- Select processes that support the organizational goals. If as in most companies goals include developing products on time and on budget in order to increase customer satisfaction and improve profits
- You need a valid estimating process that provides a confidence based project plan
- You need to measure cost and schedule at team task level
- Predict future project performance (actual estimate based on past performance not a belief that the project performance will improve with no external action)
- Take optimal corrective actions early
- Develop organizational baselines that can be used to monitor project predictions based on past performance and enforce corrective action when baselines are breached, ie establish the upper and lower control limits that force project corrective action.
- Use a predictive model such as a Performance Based Earned Value Model to predict the project future performance
- Take corrective action to mitigate risks, improve performance, prevent issues, and optimize project performance.
The question regarding level 4 and the application of SEER models for Process Performance Modeling has been addressed in the SEER for Software suite with the addition of Project Monitoring & Control (PMC) option. PMC is a primary tool in support of step 2, 3, and 4 above. In a paper presented at the June 2009 ISPA conference, Optimized Project Management of Systems and Software Projects we discussed the concepts of developing an estimate using a parametric model such as SEER SEM so that the project has a confidence based project plan that can be. We demonstrated the use of the PMC option to SEER SEM as a tool to analyze project metrics indicating performance against project plan. PMC is a key tool for the Key Process Area Quantitive Project Management (QPM) providing a method to support statistically controlling the project by using the process metrics to analyze and predict future project performance as a function of past project performance. When the predicted performance is not within an acceptable tolerance, process modifications should be made.
At that point we then use SEER-SEM to provide a quantitative assessment of the process alternatives possible to improve project performance. We have used the SEER-SEM tool in that mode for more than 5 years in support of a major DoD program providing on going assessment of project performance and recommendations of best process improvements from among the alternatives considered.
Applying a parametric model, reflecting the organizations processes, you can develop an executable project plan to a defined confidence level Continued use of the SEER parametric model’s PMC capability will provide a basis for an Organizational Process Performance (OPP) analysis process and the Quantitative Project Management QPM) approach to provide the statistical control of the project.
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.
MIT Interns Bust Brooks Law?
Interesting article on slash dot discussing how a startup hired 20 interns for a month and actually got something done… The article intimated that Brooks Law (rate at which staff can be added to a project) was busted. The startup did the following:
Hired only the best and the brightest: They hired MIT students (could increase productivity by a factor of 10 even with Brooks Law)
Implemented only loosely coupled projects, and small ones at that: They chose projects that “lie around the edges of our core technology.” Congratulations to them. Remember Brooks Law is applicable primarily on individual programs by an individual team.
Specified completely before bringing in the interns: So the project(s) were well started when the 20 interns appeared. They don’t say how much time or staff it took to do the specification. A small team working early to define and a larger staff for construction is within Brooks Law.
A very short duration: Unclear whether they could keep up such a pace over a longer project.
Bottom line: This was quite an accomplishment. Hats off to this team. But while this is of great interest, I don’t believe Brooks Law is busted.
PS I wish I watched Mythbusters on TV more often. I could then have used their terminology.
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.
SEER-SEM Effort Increases When Schedule Is Stretched Too Far
I am always surprised when I see�old or misinformation�floating around about SEER for Software (SEER-SEM). SEER�products get regular updates including math.� I recently saw a presentation (not one of ours) where it was stated that SEER continues to reduce effort…to the point of absurdity when the schedule is stretched unreasonably long.� SEER deals with minimum time, optimal schedule, and sub-optimal schedule.
Of course there is a point where the inefficiencies of elongated schedule cause people to gold plate, etc.� And SEER for Software does start increasing costs when that point is reached.
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.
Acquisition Reform (WSARA) And History
In addition to the webinar Bob Hunt will give on Acquisition Reform, the history interview by Dr. McNichol is definitely worth a read.
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.
Personal Capabilities & Other Non-Technical Parameters Can Make a Big Difference in Estimating
Thanks to Galorath’s Sam Sanchez for these insights on non-technical parameters:
When I first started with Galorath, I used to wonder about the usefulness of having parameter inputs like Developer Experience or Development Tools and Practices” within our electronic models. Like many engineers, I didn’t like these types of qualitative inputs, preferring to use more concrete entries like frequency of board, number of IC’s/IO and others. However, as the years have progressed, I’m amazed at how critical these qualitative parameters continue to be. Like I heard mentioned in one of my SEER H classes, There are A teams, B teams and believe it or not even D teams. More importantly, the impact of these variations can cause dramatic differences in a projects level of effort.
Common reasons for poor team efficiency could be longevity of the individuals in the given technologies, recent mergers, bad chemistry, poor communication practices and others. It’s important to note that we look at this parameter as an overall assessment of the team.
To help reduce confusion with this input, SEER-IC looks at the following criteria: Accomplishment Metric, Configuration Control, Communications, Adv Skills and Tool Experience. Specific measures within these major sections help users to come up with a reasonable range input. Also, this is definitely one parameter that should have a different entry for least likely or most. Â In other words, there is always some level of risk here.
In SEER-H, swings in Development Experience individually can swing costs by as much as 30%. Development Tools and Practices by as much as 50%. We tend to look at common variations. In reality, at times, the variations may be orders of magnitude.
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.
Project Prediction Infographic
