ACHIEVE BUSINESS SUCCESS WITH ACCURATE SOFTWARE PLANNING

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1 ACHIEVE BUSINESS SUCCESS WITH ACCURATE SOFTWARE PLANNING SOFTWARE DEVELOPMENT ESTIMATION STRATEGIES Manage risk and expectations within your organization with credible, defensible estimates. Learn how Borland CaliberRM can help you to optimize the planning, execution, and management of software delivery across all roles, teams, and technology platforms. A Borland White Paper February 2005

2 TABLE OF CONTENTS Executive summary A new era of responsibility Understanding software project estimation and planning risks Borland solution for automating planning and estimation Conclusion About Borland

3 Executive summary As the world s top corporations lean more heavily on their IT departments for competitive advantages, the ability to quickly develop custom software becomes more of a necessity. But even the best programming teams with the sharpest, most logical minds can see their efforts derailed by the simple problem of poor communication, especially between a corporation s business executives and the software development teams. At many large enterprises, corporate executives and software development organizations often are in conflict. Executive staff is frustrated because development projects fail to meet expectations, impacting business objectives. At the same time, software development organizations point the blame at executive decision-makers, citing executives inability to prioritize or communicate business requirements, unreasonable scheduling pressure, and the rejection of responsible estimates as reasons for failure. What s the real cause of this conflict? A lack of effective communication and a need for processes that drive collaboration. Software product managers, program managers, and business analysts might have different goals and expectations for a development project. Change from either the business end (perhaps new features that need to be added) or the development end (a sudden reduction in resources) can make original plans outdated and indefensible. Without a common, understood method for managing expectations and mitigating development risks, conflicts can arise which can doom the success of a program and diminish the executive faith in the development organization. CHAOS research from analyst firm The Standish Group shows that the most common causes of project failure are a lack of skilled project management and executive support. However, with business success now increasingly dependent on successful software delivery, managing software development risk is now a requirement. To maintain a competitive edge, businesses must end the blame game and build software according to development processes that are rapid, responsive, and adaptive. This paper discusses how software managers and business analysts can take control of the estimation process and build confidence in the software organization. This approach allows stakeholders across the organization to build and support credible project estimates and emphasizes the alignment of business objectives with software strategies. Ultimately, it helps software managers and business analysts maximize the business value of software projects that they manage. This paper also highlights development best practices amid project uncertainty and introduces the Borland Software Delivery Optimization strategy and its breakthrough requirements management and project estimation solution, Borland CaliberRM. A new era of responsibility Risk management is practiced as a matter of course in almost all engineering disciplines. It is usually associated with collecting various metrics across production cycles and then analyzing them in order to identify potential risks. However, many software development organizations have not incorporated these techniques into their processes. This lack of rigor might be because of the relative newness of software development as an engineering discipline. Regardless of the cause, the result is project cancellations and failures, cost overruns, and schedule slippages. According to the 2003 Standish report, only 28% of applications come in on time and within budget, and 48% of projects do not have the required features at product release. What causes software projects to fail so often? In an effort to maximize value, software organizations are under pressure to optimize resources and do more with less. Changing requirements are the norm, as are increasingly aggressive software delivery cycles. In addition, the complexity of technologies and architectures has increased dramatically. The result is a development environment of semi-controlled chaos. 3

4 In a number of focus groups, IT executives told us that they first get their best estimate, multiply by two and then add half. Source: Extreme Chaos, The Standish Group International This chaos often results in a blame game between corporate executives and software development groups. Corporate executives fault the accuracy of the development group s planning and estimation. They also often look at a team s historic inability to predict reliability and cite the failure to set realistic expectations and foresee the impact of change on a project. In the eyes of corporate executives, the software development organization lacks credibility. Because it often fails to meet business expectations, the development team is one of the most problematic areas in the enterprise. The software development organization, on the other hand, often blames corporate executives who refuse to accept accurate and responsible estimations and instead reject the claims of the software group as sandbagging. In addition, development teams think corporate executives fail to communicate and properly prioritize business requirements. They see original plans and estimates becoming outdated as business executives add significant requirements in the middle of the project without having properly assessed the impact on the project schedule and resources. At the same time, software managers and business analysts are crippled by processes that limit their ability to build timely and defensible estimates. In the midst of this disorder is the reality that business success is increasingly dependent on successful software delivery. A new era of responsibility beckons where managing software development risk is considered a required business practice. This risk management must begin by establishing a shared, consistent vision of the project from the outset. When all stakeholders have a clear understanding of requirements and the impact of changes to the project, they are able to work more collaboratively and keep projects on track. By choosing technologies that facilitate the reconciliation between estimate and target dates, software managers and business analysts can manage this process and help their companies maximize the business value of development efforts. Understanding software project estimation and planning risks Successful software project estimation and planning is based on credible corporate expectation setting, where software development organizations can realistically state, up front, the necessary efforts in time, human and technology resources, and budget needed for successful project completion. The development organization also must rely on a history of delivering quality in its products for its estimations of needed resources to carry definitive weight. Expectation setting, however, faces serious challenges. Software development groups often lack full project definition information and therefore are unable to realistically define project scope. This knowledge gap leads to unreliable cost and schedule estimations, which in turn results in problems when estimating ROI and in business planning. Ultimately, incomplete knowledge of requirements leads to a high risk of low-quality projects that do not meet business objectives. Development groups attempting to set expectations also often lack historical information. The inability to leverage internal trending means that organizations are in the dark regarding their organization s past cost and schedule estimates and ability to meet targets. Access to industry trending for cost and rollout duration for similar projects also often are not available. In addition, development organizations face scope, schedule, and resource volatility. Project scope is often stretched by corporate executives without respect to schedule and assigned resources. As a result, original 4

5 estimates become outdated. In order to accelerate time-tomarket, quality is sacrificed. And, in today s highly competitive business climate, many organizations are cutting development resources to reduce costs. This reduction in resources, in turn, puts project quality and time-to-market at risk. These challenges, related risks, and consequences lead to indefensible project planning and estimation and, therefore, to poor corporate expectation setting. Because the development team and corporate executives have not truly reached agreement on project requirements, scope, schedule, and resources, development projects are doomed to failure before they even begin. What is needed are tools that enable the software development group to integrate traditional engineering rigor into the software delivery process. These tools would allow project teams to improve the definition of software projects and enable them to implement a repeatable and automation-assisted approach to estimation and prediction. This methodology would enable stakeholders across the organization to work collaboratively to create a shared, consistent vision of the project. The result is a reduction in risk and improved project quality. Borland solution for automating planning and estimation As part of its Software Delivery Optimization product vision and strategy, Borland provides a breakthrough solution, CaliberRM, for managing requirements throughout the software delivery process. CaliberRM is an integrated solution that includes functionality critical for the success of software managers and business analysts, including tools for formal scope management, project planning, project estimation, and impact analysis. CaliberRM gives development managers the tools they need to build a collaborative environment that optimizes the planning, execution, and management of software delivery across roles, teams, and technology platforms. CaliberRM is an enterprise-class requirements management solution that automates the definition, classification, prioritization, and propagation of requirements across various stakeholders throughout the software delivery cycle and enables managers and analysts to create credible and defensible project estimates. CaliberRM ensures that business and technical staff have access to an up-to-date snapshot of project requirements and can help managers communicate changes and properly analyze their impact on project scope, schedule, and resources. Borland designed the CaliberRM estimation capabilities to help organizations accurately assess software project costs, duration, and risk early in the software delivery process. In addition, the CaliberRM estimation capabilities can be used to ensure that projects are still on track at each stage in the development process, as well as to calibrate and reevaluate initial estimates if requirements change during the lifecycle. The solution helps software managers and executives make trade-offs and perform scenario-based analysis to optimize their project plans and reduce delivery risk. All this is delivered in an easy-to-understand, graphical format that quickly and powerfully delivers information that can be used by all stakeholders in the development process. Project estimation and planning start with collecting initial project requirements within CaliberRM. Users then define effort estimates for every new requirement entered. CaliberRM estimation is driven by the capture of three effort scenarios per requirement: high, likely, and low effort a banded, three-point estimate. Capturing this information provides the basis for predicting overall project duration. Once the project team has defined and entered initial project requirements, estimation can begin. The project staff first selects estimation capabilities from the CaliberRM toolbar. CaliberRM automatically assigns project scope based on the requirements gathered. 5

6 At this stage, users can perform statistical analysis for the project. CaliberRM runs an analytical algorithm that offers thousands of possible simulated outcomes for schedule and effort needed to complete the project. Using these combinations, the solution can statistically predict the project s planning curve, which provides an approximation of man-months required to complete the project for any feasible schedule. For QA managers, the solution also computes the likely mean time to defect (MTTD) profile for the project, which can be used to predict the quality and reliability of the project as a function of the schedule. Finally, the solution also provides an absolute determination of most-likely project schedule, cost, and staffing. Once the initial project estimation is done, the project manager or executive can perform a second iteration, this time using a set of constraints and priorities. The constraints that can be specified include schedule deadline, maximum cost, maximum staff, and minimum MTTD allowed. They also can specify a preference for least cost or best schedule or fewest defects as a priority for planning. Using the set of constraints and priorities, CaliberRM predicts whether it is possible to execute the project given the current scope of requirements. In some cases, CaliberRM might report that it is not possible to implement a project given its current scope. In such cases, it is recommended that development first consider either delaying a given schedule, or modifying allocated resources. If none of these options is possible, then the only other choice is to reduce the project s scope of requirements. CaliberRM enables users to define multiple scenarios, each of which is associated with a different scope, to analyze the impact of scope reduction on schedule and cost. The ability to set constraints based on project cost, schedule, staffing, and quality levels can help software managers and corporate executives work together to evaluate trade-offs and alternatives. An executive might try to force constraints based on business considerations. With the information provided by CaliberRM in hand, the project manager can immediately point out the potential impact and implementation feasibility. Executives are then able to clearly see the impact of their decisions on the project. When this approach is performed interactively, the planning and estimation process becomes a collaboration between business and software staffs, each of which contributes valuable information that is used to optimize the process. Moreover, the more CaliberRM is put to use, the better its future project projections. The solution helps drive internal trending and software measurement programs. Historical data from similar projects completed within the organization can be entered to drive more realistic and accurate estimations tailored by actual results. As with any discipline, execution improves over time. The usage of actual corporate data (perhaps augmented with that from the industry at large) drives a measure of accuracy and precision into the process that enables teams to more reliably predict project performance earlier and earlier in the project lifecycle. Conclusion Executive support of software development organizations is largely dependent on the ability to ascertain the necessary effort in time, human and technology resources, and budget needed for successful project completion. Failure to accurately predict resources opens the gates to unrealistic demands that place projects on the course to failure adding to a loss of credibility and trust in the ability of the software development organization to successfully deliver business value through software initiatives. Software development executives and managers typically have lacked the tools and information to set the right expectations at a corporate level, leaving project plans indefensible. Borland CaliberRM gives development teams powerful tools to manage both risk and expectations, allowing corporations to build a collaborative environment that optimizes the planning, execution, and management of software delivery across roles, teams, and technology platforms. 6

7 About Borland The Borland Software Delivery Optimization vision and product strategy, proven solutions, and best practices are based on more than 20 years of experience in understanding enterprise software development issues. Borland offers a best-of-breed solution set that automates the project estimation and planning process, ensuring constructive collaboration among key stakeholders within the planning process, including corporate executives, line of business managers, and software managers. For more information on CaliberRM, or to request a trial, please visit Made in Borland Copyight 2005 Borland Software Corporation. All rights reserved. All Borland brand and product names are trademarks or registered trademarks of Borland Software Corporation in the United States and other countries. All other marks are the property of their respective owners. Corporate Headquarters: 100 Enterprise Way, Scotts Valley, CA Offices in: Australia, Brazil, Canada, China, Czech Republic, Finland, France, Germany, Hong Kong, Hungary, India, Ireland, Italy, Japan, Korea, Mexico, the Netherlands, New Zealand, Russia, Singapore, Spain, Sweden, Taiwan, the United Kingdom, and the United States

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