Make or Break: Why Accurate Cost Estimation Is Key
A recent article from executivebrief.com sent to me By Dr. Ricardo Valerdi of MIT discusses how the accuracy of the cost estimation process can make or break a project’s success.
“When it comes to controlling costs, it is a critical first step to make appropriate estimations at the outset of a project. Being able to control costs is largely a matter of adhering to established guidelines, oftentimes by learning from previous projects and reacting to current circumstances efficiently and effectively.”
It is amazing to me how simple this concept is, yet how many CEO’s don’t even know it is possible. Accurate estimates (of course with risk and uncertainty factored in) yield viable project plans which can then be successfully monitored and controlled. In fact the application of techniques such as earned value management, as powerful as they are, crumble when the baseline plan is unachievable.
Estimating Weight Impact of Thanksgiving Dinner
This is in a bit of a different vein than most of what is written in estimating here but it may be (and should be) on people’s minds in the US and other countries where thanksgiving is celebrated next week.
Looking at calories (which after all is the most correct measure of weight gain / loss):
The average 200 pound man burns about 2000 calories per day just living
A typical thanksgiving is at least 3500 calories to 5,000+ calories
The after dinner half hour stroll (1 – 2 miles per hour) for that 200 pound man can burn about 115 calories
Then, because of the walk, one might consume a leftover turkey sandwich about 500 calories
A pound of fat takes about 3500 calories…
Bottom line… You can gain over a pound of fat without thinking on just Thanksgiving Day.
5 top IT Spending Priorities In Tough Times
Infoworld identified the 5 top spending priorities in tough times.
1. Storage: Disks and management software
2. Business intelligence: Niche analytics
3. Virtualization: Optimizing resources
4. Security: Data and end points
5. Cloud computing: Business solutions
Dan’s 2 Papers At CMMI Conference In Denver Nov 18 & 19
Dan will be giving two papers at the CMMI conference in Denver and will be available for consultation during the Tuesday and Wednesday Nov 18 and 19.
1. Improving Project Planning and Control: A 10-Step Process Within CMMI or other Process Orientations Click Here
2. CMMI’s Role in Reducing Total Cost of Ownership: Measuring and Managing New and Legacy Software Click Here
Effectiveness Measurement At Galorath Still Focusing On the Positive
I was in an ISO review today at Galorath Inc. I saw customer satisfaction scores that were through the roof (in a good way.) I saw compliments (from the ISO compliments file) that were flattering. I asked about the complaints file (also an ISO requirement) I was told we had no complaints since the past review. I personally appreciate the compliments but learn more from complaints. When pressed I found nothing was reported as complaints. But there certainly had been some areas where we could have done better.
Process improvement is about finding where things could be better, not about painting rosy pictures. We are in the business and even we like to concentrate on the good and minimize the bad.
We are probably better than most in this regard. Process improvement and improvements in customer satisfaction is important. And to achieve these we have to identify and stress where we can do better.
The Mistake of Measuring Everything
I recently participated in a seminar with Larry Dribin of Pearl Street Group. Larry did a beautiful job with a talk called something like “You Get What You measure” Afterwards I added the corollary “If you measure everything you get nothing”
I have seen a number of organizations that just start measuring everything. They figure they will do something with the measurements sometime. Measurement becomes a burden with no ROI. And people can’t respond by doing the best job on what they are measured against. Read more
Correction to DACS Article and Apology To Capers
In a recent article published in the DACS journal I incorrectly gave credit to Herb Krasner for work done by Capers Jones. My apologies to Capers and Herb. The DACS article will be corrected electronically in the next few days to give Capers credit.
This BLOG will contain the corrected article ASAP as well.
Update: the reference should have read:
Jones, Capers; Software Quality - a Survey of the State of the Art; Software Productivity Research LLC, Narragansett, RI; 2008; (data updated annually).
Development Teams Using Note Cards: 20th Century Here Today
Lee Fischman, Galorath Guru attended the PMI conference last week. He sent an email during the confernce concerned about note cards as a project management approach. Lee sent the following for publication:
“These Agile teams that use note cards claim all sorts of wonderful
benefits from them, like seeing the entire project’s status on a wall,
and solid ownership of tasks. In fact, case tracking systems like JIRA
and Fogbugz do all that too, plus lots more such as sorting, metrics,
etc. I guess one reason people like note cards is that they are so
tangible. But using them reminds me of people who print out their
emails - soooo 19th century. Note cards are even worse, because they
are hand-written. Agile proponent Alistair Cockburn called these
“Information Radiators” but there doesn’t seem to be strong theoretical
support for the idea of using note cards over online systems. It’s not
that the entire Agile community feels like they have to do these things
by hand, because Rally, VersionOne, XPlanner and other vendors do offer popular tools to automate project management. Apparently other people agree with the notion that note cards are, uh, not optimal”
Bad Assumptions Invalidate Business Value and ROI Analysis
I recent email announced “ROI estimates in business fail primarily because managers give too much attention to the “payout” odds and too little attention to measuring and managing “probability” odds. A good risk and sensitivity analysis of the assumptions behind the predictions allows you to do both. ”
This is so true. Inappropriate or unlikely assumptions looking for payout based on the absurd (such as assuming that saving 1 minute per day of employees filling in their time card has a huge savings in a year) and a myriad of other traps cause business value and ROI to be appropriately produced using sound business case analysis.
In the same vein, absurd assumptions can cause cost and schedule estimates to be low. SEER evaluates the viability of assumptions, helping produce estimates that can actually be deployed.
Audits Improve Processes
I know not many people like an audit. Brings up thoughts of people trying to show you made a mistake.
But I just received a notice of our upcoming ISO 9001:2000 audit and I am thrilled. While we deal with processes each day, it is productive to take some time and ensure we are doing out best and to look for ways to do things later.
Part of proper management is reducing waste, seeing things that are done that don’t add value and eliminating them.
Another part of such an audit is seeing where people are doing well and making sure the whole company uses that best practice.
Initially the goal is just to have a process, even if it isnt the best. Then to refine the process(es) to reflect best practices.
At yesterday;s best practice seminar someone discussed waste, and looking to eliminate waste within the organization. I look at some of the simplest things many organizations do that are waste and can be eliminated… Pens handed out at conferences (do we think people don’t show up with writing implements, or that the cheap pens are going to win any gratitude.) Whether you are dealing with CMMI, ISO 9000, ITIL, or whatever process approach.. look for ways to eliminate waste. And remember “the enemy of the best is the good”
