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Systems Engineering and Project Management: Similarities and Differences for Cost Estimation

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Systems Engineering and Project Management: Similarities and Differences for Cost Estimation Dr. Ricardo Valerdi Massachusetts Institute of Technology – PowerPoint PPT presentation

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Title: Systems Engineering and Project Management: Similarities and Differences for Cost Estimation


1
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

1
2
Workshop Agenda
  • Introductions Objectives
  • Research Background
  • Project Management Cost Models and Feedback
  • Survey
  • Inputs Discussion

130 135 pm 135 150 pm 150 205
pm 205 235 pm 235 250 pm
3
Objectives
  • Discuss the similarities and differences between
    systems engineering and project management
  • Obtain feedback on a proposed project management
    cost estimating model
  • Conduct survey to determine the expected level of
    project 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 research

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,
1960s1990s (Stem, et al., 2006)
5
Research Background Systems Engineering (SE)
Project Management (PM)
  • SE Costs significant amount of research has
    been conducted
  • The International Council on Systems Engineering
    (INCOSE) surveyed (Honour, 2004)
  • 52 of systems projects spent 5 or less of total
    systems development cost on SE 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
Research Background Systems Engineering (SE)
Project Management (PM)
  • 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, PM maturity level (Archibald,
    2003)

7
Research Background Systems Engineering (SE)
Project 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, integrative discipline, 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)

8
Research Background Systems Engineering (SE)
Project Management (PM)
  • Project Management Institute (PMI) - Project
    Management 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)

9
Research Background Systems Engineering (SE)
Project Management (PM)
Technical Skills
Managerial Skills
  • The Overlapping Areas of SE PM in a Project
  • (Kossiakoff and Sweet, 2003)

10
Research Background Systems Engineering (SE)
Project Management (PM)
  • The Roles of Program/Project Manager and Systems
    Engineer in the Defense Systems Project Life
    Cycle Processes
  • (DOD, 2010)

11
Research Background Systems Engineering (SE)
Project Management (PM)
  • The Responsibility of Program/Project Manager and
    Systems Engineer in the Defense Systems Project
    Life Cycle Processes
  • (DOD, 2010)

12
Research Model PM Cost Estimating Model
  • 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/PM are related, but their
    costs and efforts were rarely mentioned

Case 1
SE
PM
SE
Scenario 1 PM effort f(SE effort) Scenario
2 PM effort ? f(SE effort)
13
Research Model PM Cost Estimating Model
  • Is SE part of PM?
  • Eisners view (2008) on SE/PM
  • Is it common in industries?

Case 2
PM
SE
SE
Scenario 1 PM effort f(SE effort) Scenario
2 PM effort ? f(SE effort)
14
Research Model PM Cost Estimating Model
Case 3
  • 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 govt entities

SE
PM
SE
Scenario 1 PM effort f(SE effort) Scenario
2 PM effort ? f(SE effort)
15
Research Model PM Cost 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 Fk quantity of k
size driver E represents diseconomies of
scale EM effort multiplier for the jth cost
driver. The geometric product results in an
overall effort adjustment factor to the nominal
effort.
SE
PM
Case A PM f(SE)
16
Research Model PM Cost Estimating Model
  • Potential model parameters were predetermined
    through various knowledge 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
Research Model PM Cost Estimating Model
The initial 18 PM effort multipliers are listed
as following
  • Scope Understanding
  • Scope Volatility
  • Scope Growth
  • Requirements Volatility
  • Requirements Growth
  • Budget Constraints
  • Schedule Span
  • Project Complexities
  • Systems Complexities
  • Documentation Level
  • Level of Service Requirements
  • Stakeholder Cohesion
  • Project Management Maturity
  • Project Management Experience/Continuity
  • Process Capability
  • Technology Maturity and Risk
  • Tool Support
  • Multisite Coordination

These initial PM cost indicators were determined
to 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 and
Componation, 2005 Hartman and Ashrafi, 2002
Honour, 2010 NASA, 2010 Valerdi, 2005)
18
Research Model PM Cost Estimating Model
Is PM effort proportional to SE effort?
What if PM ? f(SE) ?
19
Research Model PM Cost 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 Fk quantity of k size
driver E represents diseconomies of scale EM
project management efficiency multiplier for the
jth cost driver. The geometric product results in
an overall effort adjustment factor to the
nominal effort.
20
Research Model PM Cost Estimating Model
Consolidated 5 Cost Factor Categories
PPT Project Management Capability and Maturity
on People, Process Tools
21
Research Model PM Cost Estimating Model
  • Cost Factor 1
  • Requirements 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
22
Research Model PM Cost Estimating Model
  • Cost Factor 2
  • Project 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
23
Research Model PM Cost Estimating Model
  • Cost Factor 3
  • Constraints (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 related to SE
24
Research Model PM Cost Estimating Model
  • Cost 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

25
Research Model PM Cost Estimating Model
  • Cost 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,
    status reports, etc
  • Amount and complexity of required communications
  • Cubical/office noise
  • Solving project issues
  • e. g., number, length and frequency of meetings,
    etc

26
Research Model PM Cost Estimating Model
5 PM Efficiency Multipliers (PPT)
PPT Project Management Capability and Maturity
on People, Process Tools
27
Research Model PM Cost Estimating Model
  • Project Management Efficiency Multipliers
  • Capability Maturity of People, Process Tools
    (PPT)
  • People Capability PM Attributes
  • 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

28
Research Model PM Cost Estimating Model
  • Project Management Efficiency Multipliers
    (contd)
  • Capability Maturity of People, Process Tools
    (PPT)
  • Process Maturity
  • PM process maturity (CMMI, The Berkeley PM
    Process Maturity Model)
  • Organization PM maturity (PMI-OPM3)
  • Initial
  • Repeatable
  • Defined
  • Managed
  • Optimized
  • Tool Support
  • Level of tool automation
  • Very few primitive tools
  • Basic/Micro tools
  • Extensive/Few Integrative tools
  • Moderately integrated environment

29
Survey
  • Please take some time to answer each question
  • Feel free to ask questions

30
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?

31
Additional Questions?
  • Suggestions?
  • Comments?
  • Thank You Very Much for Your Time!!!
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