six truths you must learn about it estimation…€¦ · only 37% of software organizations believe...

Six Truths you MUST Learn About IT Estimation…

Tony Timbol, DCGKaren McRitchie, Galorath IncorporatedJanuary 13, 2009

Copyright Galorath Incorporated 2009 1

The Challenge Of IT Estimation

• IT requirements and priorities are ever changing and driven by many factors

• Business

• Technology

• Legislation/Regulation

• IT projects and initiatives cover a broad spectrum of activities

• servers, training, establishing processes, deploying software, etc.

• IT managers need estimates that are comparable, yet robust

• Estimation processes are often subjective and not repeatable

© 2009 Copyright Galorath Incorporated 2

Why bother to change?

• Despite the turmoil in the marketplace a survey of 220 CIOs indicates that process improvement remains a top priority.


Priority 1


Priority 2


Priority 3

Truth #1:

Having a solid IT Estimation process is aligned with current business priorities…

Why bother to change?

• Cutter study shows no improvement in estimation practices (www.cutter.com/press/081030.html)

… Only 37% of software organizations believe that their ability to estimate software projects has improved over the last three years, down from 51% in 2002.

…58% see no change (43% in 2002) and 5% actually see a decline in their ability to estimate (6% in 2002)

In the past 3 years, what percentage of your organization's software projects have been abandoned or

cancelled due to significant cost or time overruns?


IT Project Performance Revealed

• According to a 2007 survey - Tata Consultancy Services:


Truth #2:

Despite best intentions, poor planning and unrealistic expectations leads to challenges

and failures…

Why Bother To Change?

• Projects fail in two ways:

• A project that consumes resources but fails to deliver an acceptable Return on Investment (ROI), is terminated before completion, or is poorly scoped so resource allocation is insufficient. This results in low adoption, or produces insufficient value and no learning lessons.

• A project that consumes resources but fails to deliver as proposed, exceeds budget exceeds time, and doesn't meet specifications.

• Setting realistic expectations based on objective analysis crucial to managing projects toward success

Truth #3: Establishing realistic expectations will require moving toward

proven and mature practices


Napkins, Guts and Spreadsheets

Three basic estimation tribes describe IT project cultures…

• The Napkins – Ad-hoc, hero driven group of estimators whose past successes are legendary and whose napkin scribbling is taken as gospel

• The Guts – Feeling and experience oriented group of project managers and workers whose years of experience, good and bad, makes them trusted prognosticators of what will happen regardless of actual results (tenure benefits of being a survivor)

• The Spreadsheets – Former and current Napkins and Guts members who believe that translating their tribal knowledge onto MS-Excel spreadsheets bestows mathematical accuracy and empirical integrity on home-grown estimation algorithms.


The Trouble With Napkins And Guts

• Tribal estimation knowledge can and does work

• However, it comes with high risk and cost

• Rarely repeatable,

• Consistency is sporadic,

• Heroic energy is kept in reserve used to mitigate risk

• Knowledge almost never institutionalized outside of personal knowledge and desktop PC files

Truth #4: While Napkin and Guts cultures can work for

a while, they will fail eventually


Spreadsheets Maybe Look A Little Better But…

• Spreadsheets make Napkin and Guts estimates believable

• Very difficult to manage quality of output

• Inhibit collaboration

• Become personalized by the authors

• Increasing complexity complicating adaptability and increasing risk of error

Truth #5: Spreadsheets often propagate the basic

unreliability of Gut and Napkin approaches and do not scale to meet Enterprise needs


Institutional Memory Lasts Forever

• Converting tribal knowledge is crucial

• Creating a repository of IT projects that have succeeded accelerates exponentially future successes

• Capturing a repository of lessons learned from failed projects decelerates the downward spiral of repeat failures

Truth #6: Enhancing tribal knowledge with

mathematical and statistical methods that are empirically based creates

forward-benefit institutional memory to facilitate on-time and on-budget

performance


SEER-IT Provides Total Costs Of IT Systems & Support

ProjectOngoing Support

IT Infrastructure

IT Services

SEER for IT


Comprehensive Estimation With SEER-IT• Life Cycle Phases

• Labor/Role

• Functional Areas

ProjectOngoing Support

Manager Analyst Architect DeveloperAdministrat

orTechnician Test/QA Tech Writer Trainer

Software/Database Services

End User Services

Infrastructure Services

Application Development

Service Desk

Training

Facilities

Documentation

Purchased Items/Other

Analysis Design Procurement Construction Test Training Distribution


A View Of The SEER-IT Solution

1

2

3

4


1 – WBS Element Menu

• Insert WBS elements by clicking on an element choice

• (or from the edit menu or toolbar)

• Projects generally have multiple elements

• Some elements estimate labor• Software/Database Services Facilities

• End User Services Service Desk

• Infrastructure Services Training

• Documentation

• Some elements allow you to enter labor or purchased costs

• Purchased Hardware Purchased Software

• Application Development Additional Items


2- Work Breakdown Structure

• Elements can be organized in any way

Choose from many element types

to create a project WBS© 2009 Copyright Galorath Incorporated 18

3 - Parameters

• Each element has a set of parameters used to drive calculations

• Most parameters are expressed as least, likely and most inputs

• Each parameter can be annotated to keep track of the assumption behind the input


4 – Reports And Charts

• Choose from several report and chart types to view results

• The reports displayed will be for the selected WBS element

• If the selected element is a rollup, the result will be a summary figure


From Tribal Knowledge To An Estimation Process

• Many SEER-IT features are the cornerstone of a solid estimation process

• Flexible WBS oriented organization of costs

• Parametrics to drive estimates

• Ability to calibrate estimates fosters improvement over time

• Robust reporting

• Built in risk analysis

• Several SEER-IT features allow you to capture tribal knowledge and incorporate that knowledge into

• Scenarios (WBS patterns)

• Knowledge bases (parameter patterns)

• Parts and labor catalog © 2009 Copyright Galorath Incorporated 21

Estimation With Parametrics


Descriptive inputs drive effort, cost

and schedule estimates

Scenarios

• Pre-configured WBS patterns may be stored as a “scenario”

• Scenarios may be configured with options for the user to select which elements to include

• The WBS structure will be loaded with the user’s tailoring

• Scenarios can be generated proactively or incidentally

• Deliberately defining a standard estimation WBS pattern

• Turning an exemplar estimate into a WBS pattern© 2009 Copyright Galorath Incorporated 23

Loading Scenarios –Parameter Queries


Calibrating SEER-IT

• Calibrations allow you to capture your cost history

• Knowledge bases may also include calibration factors

• Calibrations factors make adjustments to the parametrics used by SEER-IT

• You may adjust all aspects of an estimate, or a very specific estimate component


Parts and Labor Catalog

• Configurable database for storing purchased items cost for hardware, software and even labor tasks


Reporting

• Results are reported…

• For each WBS element

• At any rollup or summary level

• Outputs may also be exported to support non-standard formats


SEER For IT Report Examples


Report Preview, Print And Export


SEER-IT Estimates Allow You To…

• Build a robust and repeatable estimation process

• Incorporate your history into the estimation process

• Tie costs drivers to requirements

• Look at a project from different angles

• Organizational (marketing vs. engineering)

• Functional (network services vs. data center)

• Physical (headquarters vs. field office)

• Business requirement

• Organize estimates by

• Phase (requirements vs. design vs. distribution)

• Role (administrators vs. technicians)

• Cost category (in-house vs. contractor)

• Time phased (monthly vs. annual)

• Evaluate risk© 2009 Copyright Galorath Incorporated 31

For A SEER-IT Demonstration…

Galorath Incorporated

www.galorath.com/

Corporate Headquarters:

Americas

Phone: +1 (310) 414 3222

E-mail: [email protected]

International Headquarters

Europe, Asia, Australia & Africa

Galorath International Ltd.

United Kingdom

Phone: +44 (0) 1252 724 518

Mobile: +44 (0) 7764 685 332


David Consulting Group

www.davidconsultinggroup.com/

Corporate Headquarters:

Phone: +1 (610) 644 2856



http://www.galorath.com/

http://www.davidconsultinggroup.com/

mailto:[email protected]

six truths you must learn about it estimation…€¦ · only 37% of software organizations believe...

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