Possibilistic Versus Probabilistic Estimates

I was in a cost task force meeting this morning, looking for ways to improve cost analysis in outsource environments, both from the customer and the offerer sides.  These have been interesting meetings in many regards.  Today the discussion focused on outsourcers who provide a low estimate, looking for the best case to win the business rather than the most probable cost.

One of the panel members pointed out that some outsources bid “possiblistic” prices rather than probabilistic prices.  Possibilistic estimates are possible, if everything goes right, but everything going right is not probable.

That is one of the reasons SEER provides a range in addition to likely costs & schedule.

We recommend planning for the probable, not just the possible.

Related posts:

1. Lines of Code Versus Functon Points Versus Use Cases For Sizing I, along with many others, have written about the virtues of one size metric versus another.  Some attempt to make...

Comments

Leave a Reply

Name (required)

Email Address(required)

Website

• Subscribe to this Blog

  Enter your email address:

• Twitter

  Follow Dan Galorath on Twitter.

• Galorath Library

  Galorath maintains a rich library of webinars, presentations, whitepapers, and demos. Register to read our entire library.

• Recent Posts

  • Galorath / Reifer Team To Provide Large Project Success Via Risk Assessments
  • The 6 Characteristics of Effective Metrics
  • FPGA Sticker Shock
  • 2012 Defense Strategic Guidance Summary
  • Cost Readiness Level (CRL) Establishing Cost Risk Based On Engineering Decisions
  • APMP Cost Task Force Industry / Government Questions & Responses
  • New SEER Labor Rate Calculator: A Leap Forward in “Should Cost” & “Will Cost”
  • Frank Vogelezang Pricing Vs Costing & Proof That IT Systems Can Be Estimated
  • APMP Cost Taskforce November 2011: Helping Calm the Storm of Budget Cuts Via Cost Analysis
  • CMMI and SEER Applicability: Estimation, Planning & Control Processes and SEER Integration

• Categories

  • APMP
  • business value
  • CEO
  • Conferences
  • Cost Estimating
  • costiq
  • Design for Manufacturing Estimating
  • earned value
  • Estimating
  • Estimation Process
  • General
  • Hardware Electronics Systems Estimating
  • IC Estimating
  • IT Estimating
  • Lists
  • measurement
  • Presentations
  • Project Management
  • Risk
  • Software Estimating
  • Software Sizing
  • Systems Estimating
  • Systems of Systems Estimating
  • Ten Step Project Estimation Process
  • Thoughts

• Recent Comments

  • Real Estate Agent on Evaluating the Benefits of Service Oriented Architecture: SEER in support of SOA Implementation Decisions
  • Henry H on Software Project Failure Costs Billions.. Better Estimation & Planning Can Help
  • Dean on Packaged Applications – The Hidden Cost of Snake Oil
  • Lee Fischman on FPGA Sticker Shock
  • Implementing ERP more effectively – Part 3 « The Manticore blog on Software Project Failure Costs Billions.. Better Estimation & Planning Can Help

• Galorath Company

  • Galorath International
  • Galorath.com

• SEER sites

  • SEER for Hardware, Electronics & Systems Project Management
  • SEER for IT – IT Project Cost Estimation
  • SEER for Manufacturing – Project Estimation
  • SEER for Software – Software Estimation

• Project Prediction Infographic

  > click to view <

• Meta

  • Log in
  • Entries RSS
  • Comments RSS
  • WordPress.org