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COMP3120_09_Cost_Management_2010_v1

COMP3120_09_Cost_Management_2010_v1 - MANAGING SOFTWARE...

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MANAGING SOFTWARE DEVELOPMENT COMP 3120 COST MANAGEMENT Chris Johnson, Elisa Baniassad, Mark Grundy
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Agenda Motivation Cost drivers PMBOK Estimate Costs Process Cost estimation techniques Cost estimation models PMBOK Determine Budget Process Cost budgeting PMBOK Control Costs Process Earned Value Management
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Motivation
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Cost Drivers Product-related Process-related Development Team-related Environmental-related
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Cost Driver Examples PRODUCT Scope change Requirements, design and construction errors and omissions Late defect detection, and resulting rework and retest PROCESS Stakeholder involvement, oversight, and dispute overheads Delays - decisions, approvals, delivery, start work, review, acceptance, payment, resulting wait time or wasted time Document and information distribution, document reviews DEVELOPMENT TEAM Staff costs, proficiency, productivity, turnover, staff availability ENVIRONMENTAL Environment, tools and facilities costs and availability
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Cost Estimation Estimates the costs of the resources (products, staff, equipment, tools, facilities) needed to perform the project activities Estimates should evolve as a project progresses and more detail is known and certainty increases Rough Order of Magnitude: -25 to +75% Budget Estimate: -10 to +25% Definitive Estimate: -5 to +10% Accuracy
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PMBOK Estimate Costs Process Inputs: Scope Baseline Project Schedule Human resource Plan Risk Register Enterprise Environment Factors Tools & Techniques Expert Judgement Analogous, Parametric, Bottom-up, Three-point, Reserve analysis Cost of quality Estimation Software Vendor Bid Analysis Outputs: Activity Cost estimates Basis of estimates Project documentation Updates
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PMBOK Estimate Costs: Inputs Scope Baseline Product description, acceptance criteria, key deliverables, project boundaries, assumptions and constraints, WBS, WBS dictionary Will the project budget direct costs only (e.g. labour), or indirect costs too (e.g. Program Office costs) Project Schedule Resources, time Depends in part on estimates Human Resource Plan Staffing, rates, performance bonuses Risk Register Risk impacts can affect cost/time Enterprise Environment factors E.g. Market conditions, labour costs Organisational Process Assets E.g. estimation policies, templates, historical estimation knowledge, lessons learned
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Cost Estimation Techniques Analogous: Compare against historical data on similar activities or expert judgment Parametric: Cost = (total effort required / established productivity rates) x notional hourly/daily cost rates Adjusted: Cost adjusted for inflation, currency conversions, risk Three point: Best/Worst/Expected cases Bottom up: Aggregate detailed effort and resource costs for individual components Reserve allocation: Assignment of contingencies where there is uncertainty (time and funds)
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Estimation Models Parametric:
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