- 1. Estimating IT projectsFrank VogelezangManager Pricing
Office
2. 2 AgendaEstimating IT projects What is estimating How good is
your estimate The only certainty is uncertainty Cost drivers for IT
projects Reliable estimation 3. 3 Who is@Frank VogelezangOrdina-
System Integrator- Netherlands, Belgium, Luxemburg- close to 3,000
employees- Manager Pricing Officewww.ordina.comCOSMIC- Functional
Size Measurement- 23 countries- Open Source- President &
Measurement Practiceswww.cosmicon.comNesma- Software Metrics
Association- Based in the Netherlands- About 80 member
organisations- Counting Practices Committeewww.nesma.orgIWSM-
International Conference- In 7 countries since 1991- Academics and
Industry- Conference Chair 2014www.iwsm-mensura.org 4. What is
estimatingAnd why is estimating IT projects so difficult 5. IT has
a bad track-record in project estimatingWhat is estimating5For a
critical analysis of the Chaos reports see: www.cs.vu.nl/~x/chaos
6. IT has a bad track-record in project estimatingWhat is
estimatingAny idea where this bad track-record comes from? No clear
project objective Start with an inadequate budget Too little time
and/or resources No use of benchmarking No idea what an estimate
is6We can doublethe estimate . . . . but then it willultimately be
fourtimes as expensive!on estimating 7. Definition of an
estimateWhat is estimationHow would you define an estimate?An
estimate is an analytical and unbiased prediction of how long it
takes and what it will costThe bias comes from the interplay with
targets, commitments and plans7 8. Target, estimate, commitment and
planWhat is estimation Target Desirable business objective When and
what Estimate Analytical prediction With an uncertainty range How
and what Commitment Promise to deliver Defined functionality and
quality What and when Plan Bridging the gap between estimate and
commitment and mitigating the risk involved When and how8 9. A
typical estimateWhat is estimation9ProbabilitySchedule / CostFirst
likely option50/50 median result 10. A good estimateWhat is
estimationA good estimate is a prediction that provides a clear
enough view of the project reality to allow the project leadership
to make informed decisions about how to control the project to hit
its targets.Know where you come from, where you are and where you
are going10Software Estimation: Demystifying the black art:
www.SteveMcConnell.com 11. How good is your estimateA simple quiz
with unexpected questions 12. A simple quizHow good is your
estimateThe rules You get 10 questions, about anything but IT
Answer each question with an upper and a lower boundary The answer
should be within these bounds with a 90% chanceThe objective To
finish the quiz with 90% correct answers So 9 answers to the
questions are within the boundaries12 13. A simple quizHow good is
your estimate131. What is the surface temperature of the sun in C2.
What was the total throughput of the Port of Rotterdam in 2012 in
metric tons3. World-wide box office receipts of the Lord of the
Rings trilogy in US$4. What is the total area of the Asian
continent in km25. What is the year of birth of Alexander the Great
according to Christian calender6. The number of book titles in the
Library of the Congress since 1776 in millions7. How heavy was the
heaviest blue whale ever recorded in metric tons8. How many Euro
bills were in circulation at the end of 2009 in billions9. What is
the highest point in the kingdom of the Netherlands in m10.What is
the total length of the coastline of the Pacific Ocean in km 14. A
simple quizHow good is your estimate1. Surface temperature of the
sun 6,000 C2. Throughput of the Port of Rotterdam in 2012 441
million ton3. Box office receipts of the Lord of the Rings trilogy
2.91 billion US$4. Area of the Asian continent 44.4 million km25.
Year of birth of Alexander the Great 356 BC6. Book titles in the
Library of the Congress since 1776 22 million7. The heaviest blue
whale ever recorded 190 ton8. Euro bills in circulation at the end
of 2009 13.6 billions9. Highest point in the Netherlands (Mt
Scenery on Saba) 877 m10.Coastline of the Pacific Ocean 135,663
km14 15. Estimating psychologyHow good is your estimateHow well did
you do this quiz? The average score is around 3, in line with the
CHAOS reports We are conditioned to believe that narrow ranges are
more accurate We feel that wide ranges make us appear ignorant or
incompetent In real projects estimates are often biased by
knowledge about the targets15 16. Beating the estimating
psychologyHow good is your estimate If the objective is unclear,
the answer cannot be precise IT suppliers want to do customers a
favour by promising they can deliver,although they have no idea
whether it is realistic. Is that a favour? There are no bad
suppliers, but enough substandard customers*16* Joep Brcker (KPN) :
www.sogeti.nl/evenementen/2010/succesvol-aanbesteden-van-ict 17.
Basis of EstimateNew recommended practice standard by AACEi
andGeneral aspectsBasisRiskMitigation17RECOMMENDED
PRACTICEEstimationpurposeEngagementScopeDescriptionEstimatingmethodology(FP,
expert,etc.)EstimateClassification(1,2,3,4,5)Design
Basis(Componentslists, units, etc.)Sizing
BasisRequirementsFunctionaltechnicalEffort
Basisdeliveryconstraints,service levelsPlanning BasisWorking
timestandbyLevel of detailStage, Dealsize/type, fixedprice/TMCost
Basismethods andsources ,
unitsAssumptionsinternal,externalAllowancesNot in the
BasisExclusionsNo costsincluded forExceptionsanomalies orvariances
onstandardRisks andOpportunitiesassumptionsContainmentscost
elementsfor
mitigationContingenciesUncertainty,unforeseeableelementsManagementReservechanges
inscope, effortReconciliationChanges
topreviousestimationBenchmarkingComparisons
tosimilarengagementsEstimateQualityAssuranceReviewsAttachments
Attachments Attachments Attachments 18. Coffee break 19. 19
AgendaEstimating IT projects What is estimating How good is your
estimate The only certainty is uncertainty Cost drivers for IT
projects Reliable estimation 20. The only certainty is
uncertaintyMost IT projects deliver something else than initially
intended 21. Managing the devils triangleBalancing between cost,
time and scopeCost21TimeScopeRisk 22. Managing the devils
triangleBalancing between cost and time for a given size22Paul
MassonsLawParkinsonsLawBrooksLawMinimal timeOptimal
effortTimeEffort / CostRealisticProductivity 23. The devil is in
changeTraditional fixed price, fixed date
projectsCost23TimeScopeRiskRiskRisk 24. DoubtLets make room for
changeThe uncertainty in agile projectsCost24TimeScopeRisk 25. Cost
drivers for IT projectsSizing and estimating 26. Estimating IT
projectsTwo essential routes26ObjectiveSizeEffortCost 27. 27 Effort
estimationEstimating IT projects Sizing by analogyHave we done
something similar before? 28. 28 Effort estimationEstimating IT
projects Ask the experts to estimate using Delphi techniques
Original Delphi:Individual estimates | Distributed by a facilitator
| Several rounds Wideband Delphi:Group discussion | Individual
estimates | Consensus on large variation Delphi PERT:Use Delphi to
establish lower bound, higher bound and most likely valueCalculate
the estimate by the formula (Lo + 4 * ML + Hi) / 6 Planning
Poker:Estimate effort to produce a work item, related to a standard
work itemUse cards with a Fibonacci (like) scale to reflect
uncertainty for larger items 29. Estimating IT projectsThe second
route29ObjectiveSizeEstimating &BenchmarkingEffortCost 30. 30
Size estimationEstimating IT projects Sizing by proxyDefine
repeatable elements Experience data per proxy element Technical
elements: Lines of CodePrograms / ModulesScreensData files /
ViewsInterfaces Logical elements: User Stories / Use CasesProcesses
in the Data Flow DiagramFunctional Size Measurement 31. 32 Size
estimationFunctional Size Measurement
COSMICeXitWriteEntryeXitReadReadTransaction oriented 32. Size
estimationFunctional Size Measurement COSMICCounting COSMIC
function points Establish Functional Processes Determine the data
movements # Entries # Writes # Reads # eXits Each data movement is
scoredEntry 1 CFPWrite 1 CFPRead 1 CFPeXit 1 CFP A data movement
can be identified alone33 33. 34 Size estimationFunctional Size
Measurement Function Point Analysis FPA stands for
FunctionPointAnalysis What the software should be able to do
(functionality) Functionexpressed in a number Pointbased on an
objectively described method Analysis Something intangible like
functionality becomes a physical number that canbe used for
calculations 34. 35 Size estimationFunctional Size Measurement
Function Point AnalysisExternal InputExternal OutputExternal
InquiryInternal logical filesExternal input filesData oriented 35.
Size estimationFunctional Size Measurement Function Point
AnalysisCounting function points Based on established criteria each
element isclassified: Each classification has its own
scoresInternal files 7 10 15External interfaces 5 7 10External
input 3 4 6External output 4 5 7External inquiry 3 4 6 A function
point never travels alone36SimpleComplex 36. Reliable
estimationTranslating size into effort 37. Estimating IT
projectsTranslating size into effort38SizeEffortCostObjective 38.
39 Translating size into effortProject size as a cost driverSize
Early On time Late Failed10 FP 11% 81% 6% 2%100 FP 6% 75% 12%
7%1.000 FP 1% 61% 18% 20%10.000 FP
