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.
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Affordability Analysis: The Role of Process, Cost & ROI
This is the short version of my new brief on Systems and Software affordability and affordability process. This version is oriented towards Department of Defense software. I have another, more comprehensive version that covers commercial software. One key point is the use of parametrics in the affordability process to make lots of trades quickly… then after analysis of alternatives, drilling down on the chosen one or few alternatives.
Here is the abstract:
Affordability Analysis: The Role Process, Cost and ROI Modeling In Improved Program Performance
Affordability analysis as part of decision making may be the biggest edge of the decade for both commercial organizations and DoD / government organizations.
In an IT context companies struggling to increase profits often view IT as a necessary evil: one that consumes resources rather contributes to the bottom line. However, IT can be a significant contributor when IT decisions are made after modeling affordability in terms of the cost and return.
In a DoD context affordability as “should cost” and “will cost” are the bywords of the times: attempting to replace past cost / performance failure due to inflexible user requirements or over-specified contractor requirements is being replaced by realistic trades of cost, schedule, performance and other key performance parameters.
As people go forward in affordability analysis it is important to recognize that tools are important and that repeatable process is essential to success.
A complete affordability analysis determines the risk adjusted Total Cost of Ownership and return on IT investment along with its consistency with long-range investment and business strategy of an organization measured against risk and key technical and performance parameters.
Both existing systems and new developments will be addressed. Additionally risk and tradeoffs between functionality, quality, security and other system goals will be covered.
Process steps include: 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, 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.
“The Wisdom of Crowds” In Estimating
WRONG: “No one in this world, so far as I know, has ever lost money by underestimating the intelligence of the great masses of the plain people.” -H. L. Mencken
I am in process going through the book “The Wisdom of Crowds.” The book’s point is that large groups of people are smarter than the elite, most brilliant few, at solving problems, making good decisions, stimulating innovation, and predicting the future.
This counter-intuitive point has significant ramifications in estimation, planning and control.
Of course the “crowd” needs to be people who understand the domain and issues of whatever needs to be estimated, such as the size or parameters in a SEER estimate, and they must be motivated to achieve the right answer, not the politically correct, self serving, or wished-for answer, but the truth.
Answering questions such as: Why is the line in which you’re standing always the longest? Why are there traffic jams? What’s the best way to win money on a game show?
I find this interesting on many levels as well as pointing out why our estimate by comparison function works so well when a team provides the answers.
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.
Estimating Best Practices
The following are the bullet points from Dan’s paper on estimating best practices. Using these best practices can increase project success dramatically.
- Decide Why You Want An Estimate
- Map Estimation Goals To Estimate Process Maturity & Develop Plan To Achieve The Maturity
- Have A Documented, Repeatable Estimation Process
- Evaluate Total Ownership Cost; Not Just Development
- Estimate A Range And Pick A Point For The Plan
- Re-estimate The Program When It Changes
- Avoid Death Marches: Programs With Unachievable Schedules Are Likely To Fail And Drain Morale
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.
Issues in Software Measurement & Estimation ISMA 2010
Measurement is a wonderful thing. However measurement without standards and definition can be worse than no measurement at all. This paper which I will be presenting at the 2010 ISMA conference begins the attack, highlighting the need and proposing that additional work commences in standards for estimation and measurement. Software Estimation and Measurement 2010
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.
Heuristics for Systems Engineering Cost Estimation
Dr. Ricardo Valerdi of MIT sent me a pre-publication copy of his upcoming IEEE article. Here is the abstract:
“Engineering cannot wait until all phenomena are explained. Engineers may work effectively, often for centuries, with heuristics. This paper provides thirty one heuristics that have been inspired by the development and application of a systems engineering cost estimation model. The objective of this paper is to present such heuristics in a simple manner so that they can benefit systems engineering researchers and practitioners that develop, calibrate, and use cost models.”
I enjoyed the article (as I do with pretty much everything Ricardo produces). Such simple truths. A few heuristics quoted from the paper follow:
“Don’t assume the original statement of the problem is necessarily the best, or even the right one.”
“Let the available data drive the application boundaries of the model.”
“Design the rating scale according to the phenomenon being modeled.”
The full article is available, as provided by Ricardo here: “Heuristics for Systems Engineering Cost Estimation.”
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.
Live From UK Williams Formula 1: Ford Motor Company Europe Uses SEER for Software and IT
This morning Ford Motor Company’s European operation presented their development process, how estimating is improving their developments and how they tie IT infrastructure and IT services into the estimate with SEER to see the complete costs, make trade-offs and produce successful solutions. They have several gates where estimates are required and a lessons learned post mortem. In an excellent talk the speaker pointed out that even when the requirements are known, there is requirements growth. This is modeled with the SEER “requirements volatility” parameter.
The presentation will be available at www.galorath.com in the next few days.
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.
Viable Software Estimation Modeling: A Key Component Of Software Risk Management
I spoke with someone recently who explained the reason they use SEER is for risk management. They pointed out that not only can they determine the risks of schedule, effort and reliability, but the whole of SEER allows them to do risk reduction. A process improvement: no problem, a quick trade off is performed by setting the appropriate SEER parameters for process improvement, process experience, development tools and practices and they can see exactly what to expect, both good and bad. Then when asked to justify the result he can state explicitly: this includes reduction of team experience with processes, the process improvement going on during this project, any tools being deployed in the process improvement effort and the anticipated cost / benefit.
And for projects that are not challenged with new and different challenges, knowledge bases do the job without needing to concentrate on parameters.
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 Contractor Estimating Systems Deficiencies Can Withhold 10%
A draft rule for business systems has been posted by the Government�allowing the withholding of 10% of payments for each of six systems, with a maximum of 50% withholdings. These systems include contractor business systems including 1) estimating, 2) purchasing, 3) accounting, 4) earned value, 5) property and 6) material management.
In 2009 the congressionally chartered Commission on Wartime Contracting stated in its June 2009 interim report to Congress that:
“Weak control systems increase the risk of unallowable and unreasonable costs on government contracts”
Comments will be accepted until March 16, 2010. Email to dfars@osd.mil with subject DFARS Case 2009-D038.
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
