Schedule As an Independent Variable
There has been much talk given, in some development circles, of CAIV, cost as an independent variable (you can request my software CAIV briefing via comment on this BLOG.) This means what it costs should be a key criterion just like other key criteria such as functionality and performance. In a CAIV analysis there is a balance: what you get and how much it costs. This is a good thing since functionality only has a certain value, and spending more on it causes other things to suffer.
Schedule as an Independent Variable (SAIV) has significant merit as well. Getting it done when I need it, perhaps with less functionality than what I think I need (the Agile community points out a third of software functionality developed is rarely used or doesn’t add significant usefulness.) In an outsourced environment there are several main elements to SAIV:
- Incentives for positive contractor performance
- Penalties for poor contractor performance
- Clear definition of the minimum acceptable capability
- Pay the bonus ONLY for major completion, not time phased
Of course, an impossible date will help no one. A minimum time schedule as SEER provides and many iterations are key to success.
SAIV is applicable to computer projects (until Brooks law kicks in) and has been used successfully in construction. F0r example: the Santa Monica freeway repair following the 1994 North-ridge earthquake is an example of a successful SAIV project. Contractors wre informed that that if work completed after the date they would e penalized $200,000 per day and they would receive a bonus of $200,000 per day for each day they beat the schedule.
The winning contractor, made schedule (SAIV) a key criterion. Repairs were completed 74 days early: a $14.5 million bonus. Because the state of California estimated that the freeway’s closure cost Los Angeles’ economy $1 million a day, the speediness of completion may have saved the state as much as $34 million. And as a Los Angeles resident I can attest to the community morale improvement provided by SAIV.
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Related posts:
- 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...
- NASA Study on Cost Schedule Growth Very interesting paper covering cost schedule growth at NASA. http://www.lpi.usra.edu/pss/presentations/200806/15freaner.pdf This describes what really happens and why cost schedules grow....
- Why We Estimate Schedule & Cost I stumbled across a working draft of an excellent document on my hard drive, produced, I believe, by a gentleman...
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