Project Parametric Estimating

1. Project Parametric Estimating Techniques for developing an Estimating Model That Works Presented by: Creg Schumann & Joseph Kestel

2. Agenda • Review Estimating Concepts and Terminology • Estimating Methods • Estimating Tools • Inputs • Outputs • Developing a Parametric Model • MQ & FA • (Many Questions & Few Answers)

3. Estimating Concepts and Terminology • Top Down • Start with a high level budget (effort, duration, etc.) Break down to the detail of “what” can be done • Bottom Up • Determine “what” must be built. Roll up the effort to higher level tasks/activities/phases • Comparative • Compare to similar projects and extrapolate (Niku 6, Primavera, MS Project Central, PM Office, Artemis, etc.) • Expert • Expert judgment methods such as Delphi, Wideband Delphi, Round Robin

4. Estimating Tools • Parametric Model • http://www.ispa-cost.org/ • Models that define at a low level what must be built/accomplished/etc. and how that low level is translated into an estimate of effort, duration, cost, and schedule. • Simplistic example: Five widgets must be produced, the team can produce 2.5 widgets in one day, one widget costs $1,000 to build (labor and material), two widget machines are available, 50% of construction time is added for machine maintenance. • 3 days effort (1 for maintenance), 1.5 days duration, $5,000 cost

5. Estimating Tools • COCOMO Model • http://sunset.usc.edu/research/COCOMOII/index.html • Takes size of work to be done, applies formulas with risk factors (scaling factors and effort multipliers) to determine person months of effort. Also can be used to determine potential duration and staffing models. • Function Point Model • http://www.ifpug.org/ • Method of providing size as input to other estimation models/tools (SEER/SEM, Cost Xpert, Construx Estimate, Estimate Pro, COCOMO, various Parametric Models, etc.)

6. Inputs to Estimating Tools • Requirements • Data (if available) • Corporate • Effort • Breakout • Industry • Effort • Breakout • Risk Factors • Effort Multipliers • Scaling Factors

7. Outputs from Estimating Tools • Completed Work Breakdown Structure • Updated Requirements • Updated Risk Assessment • Revised Capability Assessment • Initial Resource Cost Estimates (Budget)

8. Developing a Parametric Model Our Goal: • To develop a (parametric) model that would reduce the time to estimate project effort based on initial high-level project requirements

9. ProjectProfile WBS Developing a Parametric Model Our Objectives: • Shorten the process from high-level requirements definition through to WBS generation • Estimate-to-Plan in nothing flat! • Utilize corporate and industry data to drive accuracy of the model • Keep it simple! • Users should be able to easily understand it and adjust it!

10. Developing a Parametric Model • Identify Parametric Opportunity • Design a Preliminary Parametric Model • Calibrate and Validate the Model • Incorporate With Organizational Policies and Processes • Maintain and Improve the Model Identify Design Calibrate Incorporate Maintain

11. Identify Design Identify Parametric Opportunity Calibrate Incorporate Maintain • Where is Parametric Estimation Applicable? • Where processes are reliable and repeatable • Where sufficient historical data exists to draw parametric relationships • Where sufficient industry data exists to draw parametric relationships • Where an organization is large enough to be able to take frequent advantage of such a model and promote maintenance of the model

12. Identify Design Design a Parametric Model Calibrate Incorporate Maintain Our Process: • Tie high-level requirements definition as input to estimating model • Assure that inputs are base on your business practices and nomenclature • Assure that input criteria are understood and well documented ProjectProfile Estimating Model WBS

13. Identify Design Design a Parametric Model Calibrate Incorporate Maintain The Project Profile: “Identify the What” • What are some typical inputs for your industry? • Software Development • Financial Services • Retail • Construction • Utility/Telecom • Government • Please document inputs on the Breakout Session sheets

14. Identify Design Design a Parametric Model Calibrate Incorporate Maintain Our Project Profile:

15. Identify Design Design a Parametric Model Calibrate Incorporate Maintain

16. Identify Design Design a Parametric Model Calibrate Incorporate Maintain Our Process: “Build the Bridge” • Create an estimating model that will feed tasks within the standardized WBS template • Establish relationships between estimate inputs and each deliverables-based task within your high-level WBS • Many-to-One relationships • One-to-One relationships ProjectProfile Estimating Model WBS

17. Identify Design Design a Parametric Model Calibrate Incorporate Maintain Our Process: “Build the Bridge” • Account for the variables: • Establish initial base hours or percentages of grouped hours to accomplish individual tasks ProjectProfile Estimating Model WBS

18. Identify Design Design a Parametric Model Calibrate Incorporate Maintain Our Estimating Model:

19. Identify Design Design a Parametric Model Calibrate Incorporate Maintain

20. Identify Design Design a Parametric Model Calibrate Incorporate Maintain Our Process: “Create the Plan” • Utilize and update corporate WBS template • Adjust for time reporting and earned value calculations (Develop a High-Level Stage/Activity WBS that eliminates confusing detail!) • Make the WBS deliverables-based! • Manage the details in a detailed WBS outside of this WBS as a detailed checklist or task-list • This High-Level WBS should only be used for time reporting and earned value calculations ProjectProfile Estimating Model WBS

21. Identify Design Design a Parametric Model Calibrate Incorporate Maintain Our WBS:

22. Identify Design Design a Parametric Model Calibrate Incorporate Maintain

23. Identify Design Calibrate and Validate the Model Calibrate Incorporate Maintain Our Process: • Establish and readjust the relationships between: • Conduct variance analysis and adjust the estimating tool as necessary • Test and revise as new projects are conducted and as data is gathered IndustryData CorporateData ProjectProfile Estimating Model WBS

24. Identify Design Incorporate into Organization Calibrate Incorporate Maintain Our Process: • Establish Schedule • Based on duration calculations as well as forward and backward paths, critical paths, and dependences, etc. • Establish Cost • Based on effort estimates (hours only) by generalize resource listing and the percentage of work they will be expected to perform • Include blended rates (or specific rates if necessary) based on groupings of expertise/dollars • Establish Staffing Models • Based on duration and loading model calculations • Make it real by looking at skill sets, dependencies, and availability

25. Identify Design Incorporate Into Organization Calibrate Incorporate Maintain Our Process: • Create instructional documentation that directs repeatable and reliable use when: • Completing the Project Profile • Adjusting theEstimating Model components • Tailoring the WBS • Roll-out and train when and where necessary

26. Identify Design Maintain Calibrate Incorporate Maintain Our Process: • Add risk weighting factors in the future to account for this element within estimating model • Continue to test and revise as new projects are conducted and data is gathered • Report variance (estimates-to-actuals) on: • Duration • Effort • Cost • Size • Staffing

27. Many Questions / Few Answers