Presentation for the Russian Managers Association in Moscow on October 15, 2013.

1. Frank Vogelezang
Manager Pricing Office – Ordina
MPC Member – COSMIC
Parametric Estimation
for reliable IT Project Estimates

2. Introduction
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Frank Vogelezang
120 km new railway
Extending the support
for the method by
by targeted guidelines
and improved
documentation
Pricing Office
- Setting commercial price
for our service offerings
- Challenging internal estimates
with parametrics

3. Agenda
Parametric Estimation for reliable IT Project Estimates
 Estimating
Getting a grip on IT cost and schedule
 Functional Size
Translating requirements to manageable numbers
 The power of parametrics
Building on proven reference data
for cost and schedule estimation
from internal or external sources
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4. Estimating
Getting a grip on IT cost and schedule

5. Estimating IT projects
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Two essential routes
Parametrics
Objective
Size
Effort
The Expert
Schedule & Cost

6. Definition of an estimate
Getting grip on IT cost and schedule
An estimate is
 an analytical and unbiased prediction
 of how long it takes
 and what it will cost
The bias comes from the interplay with targets, commitments and plans
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7. Viable estimation = Reliable estimates
Getting grip on IT cost and schedule
Analytical
 Can you verify in some way what your experts tell you?
Unbiased
 Will an expert give the same answer twice?
Prediction
 100% certainty costs too much time and resources!
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8. 2.7M
Functional Size
Translating requirements to manageable numbers

9. Functional Size : Function Point Analysis
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Translating requirements to manageable numbers
 FPA stands for Function
Point
Analysis
 What the software should be able to do (functionality)
expressed in a number
based on an objectively described method
Function
Point
Analysis
 Something intangible like functionality becomes a physical number that can
be used for calculations
 Five ISO/IEC standards: COSMIC, FiSMA, IFPUG, Mk II & NESMA
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10. COSMIC Function Point Analysis : ISO/IEC 19761
Translating requirements to manageable numbers
Entry (E)
Exit (X)
Write (W)
Read (R)
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11. The power of parametrics
Building on proven reference data

12. Parametric reality check
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Effort / Cost
Building on proven reference data
Paul Masson’s
Law
Minimal time
Parkinson’s
Law
Realistic
Productivity
Optimal effort
Brooks’
Law
Schedule

13. How much certainty do you need
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Probability
Building on proven reference data
75% for fixed price projects
90% for safety critical systems
Schedule / Cost
50/50 median result, for a balanced portfolio
First likely option, overly optimistic

14. Keep track of the actual project
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Where will it end?
Time Variance
Budget Variance
Schedule Variance
Cost Variance
Actual cost
Earned value

15. Forecast of the outcome with parametrics
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Building on proven reference data for cost and schedule estimation
Cost
Overrun
Schedule
Slippage
Actual cost
Earned value
Total cost (forecast)
Total value (planned)

16. The power of parametrics
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Viable estimates and cost-effective projects
 Estimate & Plan
 Create a baseline parametric estimate
Estimate
&
Plan
 Develop a Project Plan
 Monitor and Control
 Document actuals
 Create forecast based on parametrics
Monitor
&
Control
Experience &
Knowledge
 Re-estimate and establish new baseline
 Measure and Analyse
 Establish variances for the whole project
Measure
&
Analyse
 Determine parametric parameters
 Incorporate this knowledge in future estimates and plans
Baseline(s) vs
Final Actuals

17. www.cosmicon.com
ThePriceofIT.blogspot.com
@FrankVogelezang
FrankVogelezang
frank.vogelezang@ordina.nl
www.linkedin.com/in/frankvogelezang
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