Solution Based Estimation (SBE)

Transcription

1 Presented at the ICEAA 2017 Professional Development & Training Workshop - Solution Based Estimation (SBE) Estimating the costs of heterogeneous solutions Estimated training time: 60 minutes Slides are used with permission from CGI All rights reserved.

2 Presented at the ICEAA 2017 Professional Development & Training Workshop - Objectives Understand the link between architecture and estimation Introduction of Solution Breakdown Structure (SBS) From SBS to WBS Solution Breakdowns Structure and estimation 2

3 Presented at the ICEAA 2017 Professional Development & Training Workshop - Solution Architecture and Solution Costing

4 Presented at the ICEAA 2017 Professional Development & Training Workshop - Enterprise-level Solutions are Heterogeneous applications embedded systems infrastructure SOA implementation systems integration outsourced services... Metrics-based estimation techniques assume homogeneity

5 Solution Costing Models and responsibilities Presented at the ICEAA 2017 Professional Development & Training Workshop - 5

6 Presented at the ICEAA 2017 Professional Development & Training Workshop - Solution Based Estimation

7 Solution-Based Estimating Presented at the ICEAA 2017 Professional Development & Training Workshop - An approach to estimate heterogeneous solutions Break down solution into homogeneous components Use Solution Architecture as basis Strong involvement of Solution Architect in estimating process Document Solution Architecture in Costing View 7

8 Solution Based Estimation Challenges Presented at the ICEAA 2017 Professional Development & Training Workshop - Fuzzy scope / solution as input for the estimates Bespoke solutions instead of standard (repeatable) solutions Limited availability of capable solution architects / estimators Incompleteness of the estimate Complexity under-estimated Lack of historical data Balance between market price and actual costs Without a clear scope and solution you will not get an accurate estimate 8

9 Solution Based Estimation Recommendations Presented at the ICEAA 2017 Professional Development & Training Workshop - Clearly define the scope of the project Ensure tight scope control on delivery Day 1 (change management) Do not confuse cost and price (cost model; price model) Consolidate as early as possible all cost-related assumptions Review the solution and solution costing to identify and reduce risks Set realistic timelines for the project Be realistic on staffing ramp-up (hiring, offshoring) Verify the availability of key resources; lock down commitment Agree on acceptance criteria with the client If the solution has been defined, you can start with the estimate 9

10 Solution Based Estimation How it should not work Presented at the ICEAA 2017 Professional Development & Training Workshop

11 Solution Based Estimation Accuracy of estimates Presented at the ICEAA 2017 Professional Development & Training Workshop - Estimate class Primary characteristics Maturity level of solution definition (% of completion) End Usage Typical purpose of estimate Class 5 0 to 2% Screening or feasibility Class 4 1 to 15% Concept study or feasibility Class 3 10 to 40% Budget authorization or control Class 2 30 to 75% Control or bid/tender Class 1 65 to 100% Check estimate or bid/tender Secondary characteristics Methodology Typical estimating method Expected accuracy range Typical variation in low and high range ROM L: -20% to -30% H: +30% to +50% Unit costs; Parameters WBS; Unit cost; Parameters (high level) WBS; Unit cost; Parameters (assumptions) WBS; Unit cost; Parameters (detailed level) L: -10% to -20% H: +20% to +30% L: -5% to -15% H: +10% to +20% L: -5% to -10% H: +5% to +15% L: -3% to -5% H: +3% to +10% Based on: AACE International Recommended Practice No. 56R-08; Rev. December 5, 2012; TCM Framework: 7.3 Cost Estimating and Budgeting 11

12 Estimation In the project lifecycle Presented at the ICEAA 2017 Professional Development & Training Workshop - Scoping Due diligence Solution defined by architects First cost indication Collect and analyze actual data benchmark prices against market verification costs vs prices lean analysis on processes Maintain data as input for new estimates Solution Metrics collection EAS E&M Estimating Resourcing Risk management Project control Collection of actual data (solution elements, process) Re-estimation due to scope changes Engagement execution / control Solution based estimates Standard solution elements Fixed unit costs Parameter based costs WBS based estimates Effort, duration, quality, peak staff Probability Costs vs Market prices 12

13 Presented at the ICEAA 2017 Professional Development & Training Workshop - Estimating process Solution Targeted solution Architecture SBS Estimating Estimation Basis of Estimate (BoE) Delivery strategy WBS Schedule Capacity planning Project/Delivery Manager Engagement management 13

14 Solution Based Estimation Solution Breakdown Structure (SBS) Presented at the ICEAA 2017 Professional Development & Training Workshop - Estimating the solution requires a Solution Breakdown Structure The SBS is a deliverable-oriented hierarchical decomposition of the work to be executed Each component Should be clearly and completely defined Has a defined specification and validation approach Will have an assigned responsibility for fulfilling requirements (part of the scope) Has defined cost drivers and estimation approach Can have a different implementation approach Is delivered by a single organizational entity 14

15 Solution Based Estimation Solution Breakdown Structure (SBS) Presented at the ICEAA 2017 Professional Development & Training Workshop - Solution $ $ $ $ $ Infrastructure Tools Applications Maintenance Appl-1 $ Appl-2 $ Appl-3 $ Estimate the costs for each element in the SBS Activity based costs (WBS) Fixed unit costs Parameter based costs 15

16 Solution Based Estimation SBS => WBS Presented at the ICEAA 2017 Professional Development & Training Workshop - Development approach Processtep-1 Processtep-2 Processtep-3 Processtep-4 Processtep-5 Processtep-6 SBS-item-1 SBS-item-2 SBS-item-3 SBS-item-4 WBS SBS-item-5 SBS-item-n 16

17 Solution Based Estimation WBS principles Presented at the ICEAA 2017 Professional Development & Training Workshop - Solution items that need to be developed / set-up Processtep-1 Processtep-2 Processtep-3 Processtep-4 Processtep-5 Processtep-6 Solution items may require different processes / activities SBS-item-1 SBS-item-2 SBS-item-3 SBS-item-4 WBS SBS-item-5 SBS-item-n 17

18 Presented at the ICEAA 2017 Professional Development & Training Workshop - Package implementation example

19 Solution Costing Example: Package Implementation Presented at the ICEAA 2017 Professional Development & Training Workshop Configuration 2. Custom built functionality 3. Core module(s) / standard functionality 4. External interfaces 5. Internal interfaces 6. Data 19

20 Presented at the ICEAA 2017 Professional Development & Training Workshop - Solution Costing Example: Package Implementation SBS Package Implementation Configuration Custom built functionality Core modules External interfaces Internal interfaces Data Finance config Internal Clearing Finance Payments Finance Order Converted Ledger Order config Order Routing Order Mail Converted Catalog Fleet Converted Stock 20

21 Presented at the ICEAA 2017 Professional Development & Training Workshop - Solution Costing Example: Package Implementation WBS Product view Package implementation Requirements Build Test Deploy Configuration Build Test Custom built functionality Build Test Core modules Build Test External interface Requirements Build Test Internal interface Requirements Build Test Data Requirements Build Test Deploy Project view Package implementation Configuration Custom built functionality Core modules External interface Internal interface Data Requirements o Build Test Deploy Requirements document Workshops Document requirements Review requirements document Example breakdown till activity level Phases consist of deliverables (e.g. documents) and activities required to deliver the solution elements in the SBS. The level of detail depends on the required accuracy of the estimate and the type of project control 21

22 Presented at the ICEAA 2017 Professional Development & Training Workshop - SBE Fixed unit costs / Parameter based costs Estimation process Input (Solution Breakdown; Towers; #; Params) Estimation Tooling (Input; Historical data; Parametric models) Reporting (Effort, Duration, Costs, Probability, Labor, Quality) Standard components Parameters / Metrics Metrics process 22

23 Solution based estimation Overview Presented at the ICEAA 2017 Professional Development & Training Workshop - Streams Fixed unit costs / Parameter based costs SBS Processtep-1 Processtep-2 Processtep-3 Processtep-4 Processtep-5 Processtep-6 Development approach SBS-item-1 SBS-item-2 SBS-item-3 SBS-item-4 WBS SBS-item-5 SBS-item-n Activity based costs 23

24 Presented at the ICEAA 2017 Professional Development & Training Workshop - Summary of Key Points Architecture and estimation are strongly related SBE: structured way to link heterogeneous architectures to cost Benefits: Better scope definition more detailed underpinning of estimate Improved understanding impact of solution on planning & budget Enhanced traceability between cost and (non-)functional requirements Better consolidation of partial estimates Costing model, Financial model and Pricing are separate models The price can t be reduced by just reducing the costs Costs can be reduced by changing the solution or delivery model Healthy projects require transparency and traceability 24

25 Presented at the ICEAA 2017 Professional Development & Training Workshop - Thanks for attending this workshop Solution Based Estimation (SBE) Slides are used with permission from CGI All rights reserved.

26 Presented at the ICEAA 2017 Professional Development & Training Workshop - Questions Solution Based Estimation (SBE) Slides are used with permission from CGI All rights reserved.