Imate the Life Cycle Cost and Effort of Project Management for Technology Centric Systems...

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Systems Engineering and Project

Management: Similarities and

Differences for Cost Estimation

Dr. Ricardo Valerdi – Massachusetts Institute of Technology

Leone Young – Stevens Institute of Technology

COSYSMO Workshop

The University of Southern California (USC)

November 4th, 2010

The 25th Int’l Forum on COCOMO &

Systems/Software Cost Modeling 1



Workshop Agenda

• Introductions & Objectives

• Research Background

• Project Management Cost

Models and Feedback

• Survey

• Inputs & Discussion

2

1:30 – 1:35 pm

1:35 – 1:50 pm

1:50 – 2:05 pm

2:05 – 2:35 pm

2:35 – 2:50 pm



Objectives

• Discuss the similarities and differences between systemsengineering and project management

• Obtain feedback on a proposed project management

cost estimating model

• Conduct survey to determine the expected level ofproject management efficiency multipliers

• Obtain inputs on the appropriateness and adequacy of

the proposed project management cost model, its cost

factors and drivers• Provide an opportunity for participants to contribute their

expertise and perspective regarding project

management services and influence the direction of

future research3



4

Research Background:

Systems Engineering (SE) & Project

Management (PM)

•Cost Management – Project Air Force by Rand

–Development Management = Systems Engineering (SE) & Project

Management (PM)

–Defense Industry – US Air Force Programs (Stem et al., 2006)

» Development Management (100/%) = SE (50%) + PM (50%)

»SE/PM costs doubled since 1960s

SE/PM as a function of Integrated Logistics

Support (ILS) for a typical Air Force program

(Stem, et al., 2006)

Aircraft SE/PM Costs as a Percentage of Total

Development Cost for All Development

Programs, 1960s –1990s (Stem, et al., 2006)



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Management (PM)

•SE Costs – significant amount of research has beenconducted

–The International Council on Systems Engineering (INCOSE)

surveyed (Honour, 2004):

•52% of systems projects spent 5% or less of total systems development cost onSE tasks

–The Constructive Systems Engineering Cost Model (COSYSMO)

• As a SE cost estimating tool used by systems engineering, systems cost

estimators, etc (Valerdi, 2006)

•PM Cost Estimating?

–Methodology?

–Tools?



6

• Literature – limited information on PM related expenditures

or costs

• Organizations often do not identify or measure PM costs,

and a survey led by UC Berkeley (Ibbs and Kwak, 2000a, 2000b)

shows: – 80% of companies surveyed spend less than 10% of total project

cost (TPC) for PM services

– Average = 6% of TPC, Range = 0.3% ~ 15% of TPC

– Another survey indicated the average = 10% of TPC (Ibbs and

Reginato, 2002)

• Evidently, PM costs varies among organizations

– Influential PM Cost Factors: project type, size, # of projects, PMmaturity level (Archibald, 2003)



Management (PM)



• SE is “a methodical, disciplined approach for the design,realization, technical management, operations, and

retirement of a system. SE is the art and science of

developing an operable system capable of meeting

requirements within often opposed constraints. Systems

engineering is a holistic, integrat ive disc ipl ine , wherein

the contributions of structural engineers, electrical

engineers, mechanism designers, power engineers,

human factors engineers, and many more disciplines are

evaluated and balanced, one against another, to produce a coherent whole that is not dominated by the

perspective of a single discipline.” (NASA, 2007)



Management (PM)



8

• Project Management Institute (PMI) - ProjectManagement Body of Knowledge (PMBOK) guidebook

defines PM as “the application of knowledge, skills, tools

and techniques to project activities in order to meet or

exceed stakeholder needs and expectations from a

project ” (PMI, 2004)

• NASA defines PM as “the function of planning,

overseeing, and directing the numerous activities

required to achieve the requirements, goals, and

objectives of the customer and other stakeholders within

specified cost, quality, and schedule constraints” (NASA,

2007, 2010)



Management (PM)



9

The Overlapping Areas of SE & PM in a Project

(Kossiakoff and Sweet, 2003)



Management (PM)

Technical Skills Managerial Skills



10

The Roles of Program/Project Manager and Systems Engineer in the

Defense Systems Project Life Cycle Processes

(DOD, 2010)



Management (PM)



11

The Responsibility of Program/Project Manager and Systems Engineer

in the Defense Systems Project Life Cycle Processes(DOD, 2010)



Management (PM)



Research Model: PM Cost

Estimating Model

November 3rd, 2010The 25th Int’l Forum on COCOMO &


SE PM

Case 1

SE

Scenario 1:

PM effort = f(SE effort)

Scenario 2:

PM effort ≠ f(SE effort)

What is the dependency

between SE & PM?• how much SE effort do we

need to know before we

can determine PM effort

independently?

• If possible, how early in LC

can we assess PM effort?

Or it must be done

Interdependently?

Many suggested both SE/PMare related, but their costs

and efforts were rarely

mentioned…




Estimating Model



SE

Case 2

SE

PM

Scenario 1:


Scenario 2:


• Is SE part of PM?

• Eisner’s view (2008) on

SE/PM• Is it common in industries?




Estimating Model



PM

Case 3

SE

SE

Scenario 1:


Scenario 2:


If PM is part of SE… • how much SE effort do

we need to know before

we can determine PM

effort?

This view is usually shared in

SE oriented communities &

gov’t entities…



15


Estimating Model

Model #1~ Synthesized via COSYSMO (Valerdi, 2005)

Where,PMNS = effort in Person Months (Nominal Schedule)

A = calibration constant derived from historical project data

k = {REQ, IF, ALG, SCN}

wk = weight for “easy”, “nominal”, or “difficult” size driver

Φk = quantity of “k” size driver

E = represents diseconomies of scale

EM = effort multiplier for the j th cost driver. The geometric product results in an overall

effort adjustment factor to the nominal effort.

14

1

,,,,,, )( j

j

E

k

k d k d k nk nk ek e NS EM www A PM

SE PM

Case A: PM = f(SE)



16


Estimating Model

Potential model parameters were predetermined through variousknowledge sources (e.g. books, scholar publications, research

whitepapers, dissertations, professional and government publications,

etc.)• Aerospace Engineering

•Civil Engineering

•Computer Science•Construction Engineering and Management

•Defense/Military

•Engineering Management

•Government

•Information Technology

•Management Information Systems•Professional Societies

•Project Management

•Risk Management

•Software Engineering

•Systems Engineering



17


Estimating ModelThe initial 18 PM effort multipliers are listed as following:

These initial PM cost

indicators were determinedto be possibly correlated to

factors that have effects on

SE/PM cost adjustment

factors (Akintoye, 2000;

Anderson and Brown, 2004;

Crawford et al., 2005; de

Wit, 1988; Hamaker andComponation, 2005;

Hartman and Ashrafi, 2002;

Honour, 2010; NASA, 2010;

Valerdi, 2005)

1. Scope Understanding

2. Scope Volatility

3. Scope Growth

4. Requirements Volatility

5. Requirements Growth

6. Budget Constraints7. Schedule Span

8. Project Complexities

9. Systems Complexities

10. Documentation Level

11. Level of Service Requirements

12. Stakeholder Cohesion13. Project Management Maturity

14. Project Management Experience/Continuity

15. Process Capability

16. Technology Maturity and Risk

17. Tool Support

18. Multisite Coordination




Estimating Model



PM SE System

Complexity

Project

Complexity

Is PM effort p roport ional to SE effort?

What if PM ≠ f(SE) ?

R h M d l PM C



19


Estimating Model

Model #2

Where,PMNS = effort in Person Months (Nominal Schedule)

A = calibration constant derived from historical project data

k = {REQ, PCR, CST, SCM, DCL}

wk = weight for “easy”, “nominal”, “difficult”, or “low”, “medium”, “high” size driver

Φk = quantity of “k” size driver

E = represents diseconomies of scale

EM = project management eff ic iency multiplier for the j th cost driver. The geometric

product results in an overall effort adjustment factor to the nominal effort.

5

1

,,,,,, )( j

j

E

k

k d k d k nk nk ek e NS EM www A PM

R h M d l PM C t



20


Estimating Model

Requirements

& Scope (REQ)

Project

Complexity &

Risk (PCR)

Constraints

(CST)

Stakeholder

Cohesion &

MultisiteCoordination

(SCM)

Document &

Comm Level

(DCL)

REQ

Efficiency: PPT

PCR Efficiency:

PPT

CST Efficiency:

PPT

SCMEfficiency: PPT

DCL Efficiency:

PPT

SE= PMNS

X

X

X

X

X

PPT = Project Management Capabi l i ty and Matur i ty on Peop le, Process & Too ls

Consolidated 5 Cost Factor Categories

R h M d l PM C t



21


Estimating Model

Cost Factor #1Requirements & Scope (REQ)

– How well understood is the project?•Scope of requirements

•Number of requirements•How well they are defined

•Statement of Work (SOW), Work Breakdown Structure

(WBS), etc

•Volatility/Rate at which they are changing

•Expect any new/additional requirements ~ Requirement

Creep?

Related& Depends on SE

R h M d l PM C t



22


Estimating Model

Cost Factor #2Project Complexity & Risk (PCR)

– How much risk is there?•What is the level of risk for the project?

•What is stakeholders’ risk attitude – risk adverse?•How difficult is it to assess the risk?

•How complex is the project?

•Project Complexities

•organizational, technological/product

•e.g. PM related integration, coordination, etc

•Number of known project complexity and risks

Related& Depends on SE

R h M d l PM C t



23


Estimating Model

Cost Factor #3Constraints (CST)

– How tight are the constraints?•Schedule Span

•Time constraints•Deliverable date

• Amount of slack time allowed

•Budget Constraints•Money/Cost constraints

•Resource Constraints•Human Resources

•Function/Feature•Minimum acceptable features

•Quality

•Minimum acceptance by customers

Partially relatedto SE

R h M d l PM C t



24


Estimating ModelCost Factor #4

Stakeholder Cohesion & Multisite Coordination

(SCM)

– Amount of external PM work to be done

•Number of stakeholders•Diversity of stakeholders

•e.g., have opposing goals/objectives, have different world

views

•Communication challenges

•external clients, internal clients, contractors,languages, time zone difference, etc

R h M d l PM C t



25


Estimating ModelCost Factor #5

Documentation & Communication Level (DCL)

– Amount of internal PM work to be done• Amount and complexity of required documentation

•e.g., project plan, resource management plan, statusreports, etc

• Amount and complexity of required communications

•Cubical/office noise

•Solving project issues

•e. g., number, length and frequency of meetings, etc

R h M d l PM C t



26


Estimating Model

Requirements

& Scope (REQ)

Project

Complexity &

Risk (PCR)

Constraints

(CST)

Stakeholder

Cohesion &

MultisiteCoordination

(SCM)

Document &

Comm Level

(DCL)

REQ

Efficiency: PPT

PCR Efficiency:

PPT

CST Efficiency:

PPT

SCMEfficiency: PPT

DCL Efficiency:

PPT

SE= PMNS

X

X

X

X

X

PPT = Project Management Capabi l i ty and Matur i ty on Peop le, Process & Too ls

5 PM Efficiency Multipliers (PPT)

R h M d l PM C t



27


Estimating ModelProject Management Efficiency Multipliers

Capability & Maturity of People, Process & Tools (PPT)

People Capabil i ty – PM Attr ib utes*•Communication skills

•PM experience

•Information sharing willingness

•Delegates appropriately•Well-organized

•Supports and motivates project team

•Open-minded and flexible

•Provide constructive criticism

•Positive attitude

•Technical competency

•Team builder & player• Ability to evaluate and select project resources

•Goal oriented

•Courage and conflict solving skills

•Problem solver

•Take initiative

•Creativity

•Integrator (team, PM activities, etc)

•Decision making skills

R h M d l PM C t



28


Estimating ModelProject Management Efficiency Multipliers (cont’d)

Capability & Maturity of People, Process & Tools (PPT)

Process Matur i ty**•PM process maturity (CMMI, The Berkeley PM Process Maturity Model)

•Organization PM maturity (PMI-OPM3)

•Initial•Repeatable

•Defined

•Managed

•Optimized

Too l Suppo rt**

•Level of tool automation•Very few primitive tools

•Basic/Micro tools

•Extensive/Few Integrative tools

•Moderately integrated environment

•Fully integrated environment

*Adapted from Software Development Cost Estimating Guidebook (USAF Air Logistics Center, July, 2009) & Essentials of Project and systemsEngineering Management (Eisner, 2008)

**Adapted from Software Development Cost Estimating Guidebook (USAF Air Logistics Center, July, 2009)



Survey

• Please take some time to answer each question

• Feel free to ask questions

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Questions for Discussion

• In industry, if the same person who performs both

SE/PM functions, how do you estimate such effort?

• Which case and effort function scenario do you think is

more realistic? Why?

• How do industry corporations and government estimate

PM cost & effort?

• What type of tool & method do they use?

• How can the propose model become more practical and

applicable for industry use?

• What is missing in this research?

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Additional Questions?

Suggestions?

Comments?

Thank You Very Much for Your Time!!!

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