Standard Estimating Gates
A customer recently asked us for a standard set of estimating points. And among us we didn’t have an answer off the top of our heads… We looked at PMI, ITIL, COBIT, etc. and found no standard. We deal with estimating gates all the time… So how come we didn’t have any standards. It struck me that the estimating points match many of the decision gates, the development gates. So one of our PMI certified Project Managers called the PMI offices. They said they don’t mandate estimation points or gates since they are so diverse among organizations. And they suggested where there is a key deliverable, one the project cant live without, that is generally a gate.
PMI’s PMBOK states “cost estimates should be reviewed and refined during the course of the project to reflect additional detail as it becomes available and assumptions are tested. The accuracy of a project estimate will increase as the project progresses through the project life cycle. For example a project in the initiation phase may have a rough order of magnitude (ROM) estimate in the range of -25% to +75%. Later in the project, as more information is known, definitive estimates could narrow the range of accuracy to -5% to +10%. In some organizations, there are guidelines for when such refinements can be made and the degree fo confidence or accuracy that is expected” In other words PMI remains silent on standard estimation points.
So.. Here is a proposed set of standard estimation points. These gates are often tied to how an organization funds money for projects. So they need to be tailored to the governance approaches being used:
Concept Level Estimate
Just a finger in the wind to see if the idea is worth exploring or is so expensive as to be impractical.
Business Case Estimate
Estimate in the decision making phase when a project has not yet been authorized, often as part of the business case analysis.
Project Charter and Plan Estimate
Estimate that goes along with a project definition or project statement and estimates scope, objectives and participants in a project as well at the primary roles and responsibilities.
Detailed Plan & Function Spec Estimate
Project planning level where the project team prepares th estimate of how it will move forward. In Agile projects this may be the overall project estimate rather than individual sprint estimates.
Construction / Deployment Estimate
An estimate to complete of a project that is underway to help keep the project on schedule and cost.
Post Deployment Estimate
This estimate provides information for estimators and others to used such as lessons learned, actual data for calibration, etc.
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page, call us at +1 310 414-3222 or click a button below to ask sales questions, sign up for our free library or schedule a demo.
Making The Best Decisions in IT and Cloud: Affordability Processes Applied to Cloud Computing
I have been spending a lot of time with cloud computing as well as with affordability processes. So it seemed a good match to do a presentation covering application of affordability processes to cloud computing. The bottom line is cloud computing can save a lot of money when used at in the right circumstances…. And cloud computing can be ineffective in terms of affordability in some situations.
This includes the 10 step affordability process as well as amplification of several process steps.
I go back and forth on combining steps 1 and 2… 1. Identifying Key Performance Parameters and 2. identifying figures of merit for affordability trade-offs but continue to keep the separate just to highlight the importance of knowing what the definition of success or failure are in step 1. In a few instances I used our SEER for IT model to illustrated trades between on-premises and cloud solutions. The is a quick and powerful way to determine affordability.
When I attended the recent cloud computing conference in Banff someone pointed out it is not cloud computing, but just computing… that we need not make the distinction so sharply but basically choose the computing approach that best fits the situation… I agree. Cloud is here to stay. It is not just a fad. And it can be extremely useful when appropriately applied.
One thing I didn’t point out in the briefing is some specific Galorath experience. For example, we hosted our SEER server on the Amazon cloud. Generally users host on their own internal servers for security reasons but this seemed like a good alternative. The process went well and we were happy… until we started performance benchmarking. We found the Amazon cloud IN THIS CASE performed an order of magnitude slower than VPN across half the world to corporate servers. Again this is just a single case… We could have tuned the Amazon Cloud or purchased more capacity. We will report performance improvements when we do. There are a myriad of options on the Amazon cloud. I hope we don’t just have to pick them by trail and error. We had an enterprise database running on the cloud, along with the application. Still, the good news.. We just need to move onto another cloud or beef up our Amazon cloud capability. Participants at this conference identified several that are more designed for rapid transaction processing. This is a whole lot better than the old days: buy a server(s); find out they aren’t fast enough; iterate. Long live the cloud ad affordability analysis.
PS the above graphic is a summary of a trade done between an on-premises and a cloud solution. While this shows a substantial cost reduction from the cloud THIS DOES NOT IMPLY ALL CLOUD SOLUTIONS ARE CHEAPER.
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page, call us at +1 310 414-3222 or click a button below to ask sales questions, sign up for our free library or schedule a demo.
Cloud Matters Canadian Cloud Council…. Costs & Benefits of Cloud
I had the privilege of presenting at the Canadian Cloud Council conference in Banff Canada. It was exciting to see and hear all the wonderful things people are doing or planning to do with cloud computing.
My talk touched on the analysis of the business case for cloud computing and pointed out that sometimes cost savings are attributed to the cloud when they are really do to factors such as development environment. The point was that each cloud development needs to estimate costs and business value and make the right decision for the business.
I have several more comprehensive briefings on cloud costing available if requested. And have included the summary of Cloud costs, benefits and ROI.
My key points were:
- Use an estimation process to identify costs, schedule, risk and benefits
- Make decisions based on value to business
- Attribute costs and cost savings to their root causes rather than just lumping them all to “cloud”
It is exciting to see the evolution of cloud computing.. And sometimes disturbing when organizations cast their distributed applications as cloud applications just to get on the cloud bandwagon.
Banff…. Doesn’t get much more beautiful than this..
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page, call us at +1 310 414-3222 or click a button below to ask sales questions, sign up for our free library or schedule a demo.
Understanding Cost & Affordability Using SEER as a Common Benchmark, Driven By Facts
I was pleased to present at the joint CAST / Galorath event. My paper, “Understanding Cost & Affordability Using SEER as a Common Benchmark, Driven By Facts,” covers use of parametrics as a common language for describing estimation problems and solutions. It also points out how parametrics can be the basis of affordability trade-offs even when the final cost may be produced bottoms-up. Additionally it illustrates how SEER parametrics combine with data and provide traceability and confidence by the facts of prior systems. The following graphic illustrates the savings in time as well as the potential number of affordability analyses that can be done with SEER versus manually:
This briefing also touches on the Carter DoD “Better Buying Initiative” and affordability analysis to provide “will cost” analysis.
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page, call us at +1 310 414-3222 or click a button below to ask sales questions, sign up for our free library or schedule a demo.
The Future of Software Analysis and Measurement : Expert Panel Questions & Answers
Here are some of the questions that were answered after the webinar with Bill Curtis, David Herron, and Dan Galorath. They were answered on Cast software’s Facebook page.
What about aerospace component level software and how would you apply a cost factor their complexity factors?
What is IFPUG Back Fired Points, how does it help?
Daniel Galorath Backfiring means counting lines of code then using a number of lines per function point to approximate function points. I think it is much better than nothing for a finger in the wind. Many others in the industry object strongly to it.
Another question – What type of information is needed to start using a software analysis and measurement tool?
Bill Curtis First you need to know how you want to use the results. That will help you establish criteria for evaluating which of the various tools best meets your needs. The Goal-Question-Metric paradigm is a good guide for determining what your measurement needs are.
Here’s another question from the webinar – Would like to understand how we can improve our ability to capture metrics (defect density either using effective loc and or functional point) for applications that rely heavily on database’s where the logic resides – e.g to map biz rules existing in table rows/columns etc?
Daniel Galorath Generally you would count the work involved in building the database, not the entry of the data into the database itself. SEER will provide estimates of defect density, etc. From my understanding CAST can provide measurement of this.
What is the panel’s opinion on LLOC to FP translation such as QSM language by language table which they developed from their database.
Do you have to have a technology inventory?
How do you extend the IT governance to software suppliers? what requirements to pose to them?
Bill Curtis Customers are starting to write measurable quality targets such as robustness or security targets into their outsourcing contracts as the equivalent of service level agreements. They then establish a Quality Gate where all software received is measured and evaluated before being put in operation. If the supplier’s software falls below the quality target they must remediate the code or face a financial penalty.
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page, call us at +1 310 414-3222 or click a button below to ask sales questions, sign up for our free library or schedule a demo.
The Future of Software Analysis Measurement Webinar Featuring Bill Curtis, David Herron and Dan Galorath
We have some exciting events coming up this month with the first: The Future of Software Analysis and Measurement on October 12, 2011. I am really excited to share the virtual podium with Bill Curtis, Senior VP and Chief Scientist of CAST Corporation and with David Herron, David Consulting Groups VP of Knowledge Solution Services as moderator.
Bill and I both spoke at a software engineering conference last year and I got very excited about his work in software analysis with CAST. Besides Bill being an engaging speaker his content was very illuminating, covering issues of existing software, its complexity and reliability. He ev!–more–
en showed the number of latent defects in software of various languages. I have greatly summarized some of the a href=http://www.galorath.com/wp/software-defects-in-fielded-software-cast-analysis.phpsoftware defect conclusions /aelsewhere on this BLOG and CAST has been instrumental in recognizing and quantifying the a href=http://www.galorath.com/wp/500-billion-it-debt-for-deferred-maintenance.phptechnical debt/a
And with David Herron, one of the most knowledgeable people in the measurement community, this should be a do not miss event.
Details of the event follow as does a link to signup. Hope you can make it.
blockquotestrongThe Future of Software Analysis and Measurement/strong
October 12, 2011 8:00am Pacific, 11:00am Eastern, 4:00pm London
a href=http://www.castsoftware.com/news-events/event/future-of-sam?gad=glrClick this Webinar Link to sign up/a
Join us on October 12th to hear from an exciting lineup of experts on the Future of Software Analysis and Measurement: Dan Galorath, President CEO of Galorath Inc and Bill Curtis, SVP Chief Scientist, CAST will have an engaging discussion moderated by David Herron, VP, Knowledge Solution Services, David Consulting Group.
These industry veterans will share experiences with their client’s software development processes and discuss how Software Analysis and Measurement tools coupled with Parametric Estimation models can impact organizational performance through increased ROI, customer satisfaction and business value.
The panel will provide insightful and actionable steps that will make an immediate impact on your strategy including how to:
• Drive organization value by fueling Estimate and Measurement practices within an enterprise
• Build the funding rationale through proven economic impact models
• Establish the ROI from Estimate and Measurement practices and process/blockquote
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page, call us at +1 310 414-3222 or click a button below to ask sales questions, sign up for our free library or schedule a demo.
Computing the Value of Incomplete Software
IBM’s Murray Canter published an interesting article in the communications of the ACM covering calculating and improving the ROI in software systems. Murray shows how to compute the “investment value” of incomplete software and illustrates why it does have value showing how to compute the net present value and the return on investment of this in process work, using Monte Carlo simulation. Murray states two axioms:
- Costs and benefits occur over time, so their present values are found through NPV equations
- The future values of costs and benefits are random variables, described as a statistical distribution
I should note this requires a subscription to ACM digital content.
Its abstract states:
“Constrained by limited budgets, most enterprises find it essential to apply unprecedented business discipline to the business function of software and system delivery (SSD) across entire software and system life cycles. For this reason, the CIO, CTO, or VP of software or systems development may be under increased scrutiny from the corporate chief finance office (CFO). When conversing with the CFO, money talks, so only one of two sorts of conversations can take place: software and systems as cost center or software and systems as value-creation center.”
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page, call us at +1 310 414-3222 or click a button below to ask sales questions, sign up for our free library or schedule a demo.
Measurement and Providing Value to the Business ISMA Keynote 2011
Here is a copy of my keynote talk at the 2011 ISMA measurement conference, Measurement and Management and Business Value. The real point is the IT and measurement personnel have the information, knowledge and skill set to provide value to the business, far beyond the costs generate. But the information needs to be communicated in terms leaders can understand rather than the techie language we all think and speak in… AND if IT starts showing how it contributes to the business and becomes a profit center instead of a cost center IT will get more money to apply to more valuable things.
UPDATE: Someone also asked for a reference communicating the language of management. I believe this publication on business case analysis to be helpful in that regard.
PS In my talk I referred to software and measurement people as geeks. To many the term geek is a source of pride. One person in the talk was offended by being called a geek. My sincere apologies. However modern vernacular often defines a geek as a lover of technology, a software developer or someone with an intense love of mathematics. I consider myself a geek. And my friend Paul Glen makes his living by “leading geeks.”
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page, call us at +1 310 414-3222 or click a button below to ask sales questions, sign up for our free library or schedule a demo.
Establishing the ROI on Software Through Examination of Total Ownership Costs
I get so excited when an organization does a true business case and evaluates cost versus benefits of a software / IT system along with the risks. . Part of the key is thinking and analysing and communicating like a C llevel person rather than like a technical person. Here is a link to the PowerPoint I did a webinar on this topic during July 2011 Establishing the ROI on Software Through Examination of Total Ownership Costs. The full recorded webinar is available on the ITMPI site as well.
One might say that business case analysis is finance 101 and I would agree… Sometimes uncommon success is achieved by doing common things uncommonly well.
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page, call us at +1 310 414-3222 or click a button below to ask sales questions, sign up for our free library or schedule a demo.
DoD $150B Reinvestment of Efficiencies Savings
Secretary of Defense Gates announced design efficiencies that should reduce overhead costs, improve business practices and trim some defense programs.
“This Department simply cannot risk continuing down the same path – where our investment priorities, bureaucratic habits, and lax attitudes towards costs are increasingly divorced from the real threats of today, the growing perils of tomorrow, and the nation’s grim financial outlook.”
Tough decisions for tough times make cost estimating and analysis a key component. Gates stated his goal to have every defense dollar invested in the smartest manner. The efficiencies continue a process to reshape and re-balance the defense budget that has already saved the nation $300 billion.
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page, call us at +1 310 414-3222 or click a button below to ask sales questions, sign up for our free library or schedule a demo.
Project Prediction Infographic
