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Title: PERT REVIEW (last part of Ch 7)

1
TODAY
• PERT REVIEW (last part of Ch 7)
• CAPM Exam Details
• Time and Cost Estimation

2
PERT (Program Evaluation and Review Technique)
• Not supported by MS Project
• Gives you probabilities of completion of a
project by a certain time
• Calculates a standard normal random variate and
uses a probability table to find its probability

3
PERT INPUTS
• A most optimistic time
• M most likely time
• B most pessimistic time

4
PERT formulas
• Task mean (A 4M B)/6
• Task Std. Dev. (B-A)/6
• Project mean sum of all the task means of tasks
on the critical path
• Project std. Dev sum of all the task standard
deviations of tasks on the critical path

5
Beta Distribution
a m
b
6
PERT Homework Assignment
7
The CAPM
- The cost of joining PMI student member is
32/year (32 to renew). Therefore, joining PMI
first (using the on-line registration) will
reduce your examination costs and you will
receive all of the other benefits and discounts
available to members. - To apply for the CAPM,
you need to have A secondary degree (high school
diploma or the global equivalent) AND at least
1,500 hours of project experience OR 23 hours of
project management education by the time you sit
for the exam. - To apply for the PMP, you need to
have A four-year degree (bachelors degree or
the global equivalent) AND at least three years
of project management experience, with 4,500
hours leading and directing projects and 35 hours
of project management education. - The CAPM exam
is focused on the PMBOK Guide. It consists of 150
questions made up of 135 'scored' questions and
15 pre-test questions (3-hour exam). The pass
mark for CAPM is at 65. There are no minimum
requirements in each section. The CAPM
certification lasts for 5 years. At the end of
this period you either need to re-sit the
examination or more likely take your PMP
examination. - The structure of the CAPM exam is
• The CAPM Certification lasts 5 years
• Then you must re-take the CAPM exam or take the
PMP exam
• Joining PMI as a student costs 32/yr
• Joining gives you free access to PMBOK and other
ebooks
• Joining reduces the cost to sit for the exam

8
The CAPM Exam
• 150 Questions
• 15 pretest questions
• 135 actual exam questions over PMBOK
• 3 hour exam
• The pass threshold is 65

9
CAPM Exam Structure
10
Estimating Task Durations and Costs
11
Estimation An ART
• That made McDonnell (of McDonnell/Douglas
Aircraft) wealthy
• Accurate intelligence information is a help

12
Three types of cost estimates
• Five-ten year-out planning
• Ballpark estimatesbetter to over estimate
• Used to make decisions about which projects will
be funded when
• Two-year-out planning
• More refined estimates that consider current
costs
• Immediate execution estimates
• Used to drive execution

13
INPUTS 1. Activity list 2. Constraints 3.
Assumptions 4. Resource requirements 5.
Resource capabilities 6. Historical information
TOOLS 1. Expert judgment 2. Historical
data 3. Analogous estimating 4. Simulation
OUTPUTS 1. Activity duration estimates 2.
Basis of estimates 3. Activity list updates
14
The Cost estimation StorySteve McConnell
• You cant tell exactly what its going to cost
until you know exactly what IT is.
• (Which is why we spent so much time talking about
thorough product conceptualization and
definition)

15
The WBS as price estimating tool
• Provides the basis for effective and open
communication between functional management and
program/project management
• After pricing is complete the WBS forms the basis
of a communications tool by documenting the
performance agreed on in the pricing effort.

16
Differentiate Estimates from Targets and
Commitments
• We will have it done in three months
• Why three months???
• Because that is when the trade show happens

17
Is it better to overestimate or under estimate
Effect Cost Schedule
Underestimation
Overestimation
100
lt100
gt100
Target as a Percentage of Nominal Estimate
18
A Rule of Thumb
• The time to design, document and code a module
• equals the time to debug it (TEST IT)
• At least 45 of the total time devoted to testing
• According to Gildersleeve

19
Cone of Uncertainty
20
The Standish Groups Project Outcomes
21
Estimating Rules (Rakos)
• Never use inexperienced persons to estimate
• Get group estimates if possible
• Never force an estimate on a programmer
• Never take an average of different estimates
• Granularize down to FOUR or less weeks, roughly
• Always add for contingency
• Always quote a range when giving estimates

22
Rakos Conclusions to Estimating
• Our weakest talent
• Estimating is iterative
• Estimating is still an art

23
Review Project Time Management Processes
• Project time management involves the processes
required to ensure timely completion of a
project. Processes include
• Define activities
• Sequence activities
• Estimate Activity resources
• Estimate Activity durations
• Develop Schedule
• Control Schedule
• Which of these gets performed in the Planning and
Budgeting Stage??

24
A Typical Task Duration Process
• Assign the task to a project player
• Ask the player how long it will take him or her
to complete the task (This gives the player
ownership in the planning)
• Player provides their best estimate
• The player understands that they will be required
to complete the task within their estimatetheir
feet will be held to the fire

25
Time Estimation Goldratt
• Claims team players add safety to their estimates
• What is safety??
• Can determine how much by asking the question,
How sure are you that you will finish your task
in the time you allotted?

26
Time Estimation--programmers
• Naïve programmers have a horrible reputation for
underestimating task durations and costs

27
Time Estimationmaking time for creativity SLACK
• Keep in mind that customers unintentionally put
projects under extraordinary schedule
pressuremore for less
• A consideration in schedule development is to
take the tasks requiring creativity and place
them on ____?!?

28
Too little time syndrome
29
Needed A Rule-based Expert System for adjusting
• IF ESTIMATER IS SEASONED (EXPERIENCED) AND IF THE
WORK PACKAGE REQUIRES CREATIVITY ON THE PART OF
THE ESTIMATOR, THEN LEAVE ESTIMATE AS IS.
• IF ESTIMATER IS NOT SEASONED AND ESTIMATE APPEARS
TO BE OPTIMISTIC, THEN INCREASE ESTIMATE BY 30.

30
ANOTHER AI RULE
• IF ESTIMATOR IS SEASONED AND ESTIMATOR ASSERTS
90 OR ABOVE CONFIDENCE HE WILL COMPLETE WORK
WITHIN HIS ESTIMATE AND IF WORK PACKAGE DOES NOT
REQUIRE SIGNIFICANT CREATIVITY, REDUCE ESTIMATE
BY 40 -- 50

31
Time Estimation
• What are the three approaches to time
estimation??
• Expert judgment
• History database
• Computer model or formula

32
Project Cost Management Processes
• Plan Cost Management
• Estimate Costs developing an estimate of the
costs and resources needed to complete a project
• Determine Budget allocating the overall cost
estimate to individual work items to establish a
baseline for measuring performance
• Control Costs controlling changes to the project
budget

33
Cost Estimating
• We need to speak the language and understand the
terminology
• ROI, IRR, NPV, Sunk costs
• Tangible and intangible costs
• Direct and indirect costs
• Learning curve theory
• Reserves ( included in a cost estimate to
mitigate cost risk also called contingency
reserves)

34
Cost Estimating
• An important output of project cost management is
a cost estimate
• There are several types of cost estimates and
tools and techniques to help create them
• It is also important to develop a cost management
plan that describes how cost variances will be
managed on the project

35
Proposal Pricing Strategies--Kerzner
• Type I Acquisition One of a kind project with
little or no follow-on opportunity
• win the project, perform well and make a profit
• Type II Acquisition New Program with potential
for large follow-on business or representing a
desired surge into a new market
• win the project, perform well and gain a foothold
in a new market segment, usually at a loss

36
Table 6-2. Three Types of Cost Estimates
37
• Program/project costs involve both direct labor
and indirect (OVERHEAD) costs
• Each team member should understand overhead rates
• If overhead rates are more than 50 of direct
regular time and not chargeable to overtime, then
overtime at 150 regular time may be cheaper
• Overhead rates in manufacturing can be 300-450

38
Elements of Overhead Rates (Indirect Costs up
to 90 of total costs)
• Building maintenance
• Building rent
• Cafeteria
• Clerical
• Consulting
• Corporate Salaries
• Depreciation of equip.
• Executive Salaries
• Group Health insurance
• Holidays
• Moving/storage exp.
• Personnel recruitment
• Retirement plans
• Sick leave
• Telephone/Utilities
• Vacation

39
Why are Overhead Rates of Interest to Project
Management???
• These rates must be included in any project cost
calculation!!!
• The contractor is going to pay both your direct
and your indirect overhead costs if yours is the
winning bid
• Where do the costs associated with bidding and
proposing go? Does anybody pay for them or are
they just a SUNK cost???

40
Estimation in GeneralCOST or TIME
• History data base
• Expert judgement
• a model like COCOMO

41
Cost Estimation Tools and Techniques
• 4 basic tools and techniques for cost estimates
• Analogous or top-down use the actual cost of a
previous, similar project as the basis for the
new estimate
• Bottom-up estimate individual work items and sum
them to get a total estimate, as is done with the
WBS
• Parametric use project characteristics in a
mathematical model to estimate costs
• Computerized tools use spreadsheets, project
management software, or other software to help
estimate costs

42
Constructive Cost Model (COCOMO)
• Barry Boehm helped develop the COCOMO models for
estimating software development costs
• Parameters include source lines of code or
function points
• COCOMO II is a computerized model available on
the web
• Boehm suggests that only parametric models do not
suffer from the limits of human decision-making

43
Factors Impacting COCOMO Cost
44
Cost Realism
• A term widely used in the IT project management
real
• Not an exact prediction
• Cost realism is about the system of logic, the
assumptions about the future, and the
reasonableness of the historical basis
• The more preliminary and less studied the
estimate, the more It should over-state the
actual cost

45
Lets REVIEW What are the Major Cost Components?
• Salary structure
• Overhead structure (Indirect labor costs)
• 50 at TTU
• Direct Labor hours required times average hourly
rate
• Cost of materials and support

46
Cost of Materials??
• Required Software
• Diet coke, pizza

47
Stop herewill not test you on anything else
48
STOP!!!
• Stop
• Stop
• Stop
• Stop
• Stop
• Stops

49
Lefkons Methodology
1.  Divide the software project into as many
possible. 2. Predict the level of effort required
to complete each task and multiply that
prediction by 2. 3.  Add up the numbers and
multiply by 2.0 again to account for testing and
debugging. 4.  Take the total and multiply by
1.25 to account for meetings, administration, and
paperwork. 5. Multiply this level of effort by
your companys magic number for labor costs.
50
Lefkons Methodology
• 6. Present this to management as a range. Take
the cost as predicted above and present the range
as 10 percent and 25 percent.
• 7.  Stand your ground and remind management that
you did not arbitrarily come up with these
numbers and they cannot be adjusted arbitrarily.
You may have to suggest reducing scope and cost
if management does not agree with your estimate.
• 8. Revise your project budget as you undertake
and complete the project.

51
Typical Problems with IT Cost Estimates
• Developing an estimate for a large software
project is a complex task requiring a significant
amount of effort. Remember that estimates are
done at various stages of the project
• Many people doing estimates have little
experience doing them. Try to provide training
and mentoring.
• IT People have a bias toward underestimation.
Review estimates and ask important questions to
make sure estimates are not biased
• Management wants a number for a bid, not a real
estimate. Project managers must negotiate with
project sponsors to create realistic cost
estimates

52
Table 6-3. Business Systems Replacement Project
Cost Estimate Overview
53
Table 6-4. Business Systems Replacement Project
Cash Flow Analysis
54
Cost Budgeting
• Cost budget involves allocating the project cost
estimate to individual work items and providing a
cost baseline
• For example, in the Business Systems Replacement
project, there was a total purchased costs
estimate for FY97 of 600,000 and another 1.2
million for Information Services and Technology
• These amounts were allocated to appropriate
budgets as shown in Table 6-5

55
Table 6-5. Business Systems Replacement Project
Budget Estimates for FY97 and Explanations
56
Designing the Baseline
• One of the most crucial inputs to the pricing
decision
• Baseline design should be started early so its
cost estimates can be included in the proposal
• Effective pricing should begin a long time before
proposal development
• Gives management an opportunity to terminate a
bid initiative before too many resources get
committed to proposal development, presentations,
negotiations, etc..

57
Pricing Process
• This activity schedules the development of the
work breakdown structure and provides management
with two of the three operational tools necessary
for the control of a system or project
• The third tool is the WBS

58
The WBS as price estimating tool
• Provides the basis for effective and open
communication between functional management and
program/project management
• After pricing is complete the WBS forms the basis
of a communications tool by documenting the
performance agreed on in the pricing effort.

59
Organizational Input Requirements
• After the WBS and activity schedules are
established, an organizational meeting is called.
• The WBS is described in depth
• Responsibilities are clarified
• Costing information is solicited and collected
from the responsible parties
• A short time fuse is usually involved in
estimating/pricing which makes it all the more
risky
• RFPs sometimes require a response within 30 days
of their submittal

60
Labor Distributions
• Functional units supply their input in the form
of man-hours
• See Figure 14-2
• Man-hours submitted are often over-estimated
• Man-hours are converted to dollars by multiplying
by the labor rates
• Rates are only averages
• Base rates are then escalated as a factor,
based on past experience

61
Labor Distributions--Conflict Resolution
• The reduction of man-hours is often the source of
heated discussions between project and functional
management
• Most common solution rests with the project or
program manager
• This becomes the usual turf-fight
• How would you resolve all such conflicts???

62
A Proposal Manager
• Integrates the activities of the program and
functional managers
• Insures that a robust proposal gets submitted to
the REQUESTER on time

63
• Program/project costs involve both direct labor
and indirect (OVERHEAD) costs
• Each team member should understand overhead rates
• If overhead rates are more than 50 of direct
regular time and not chargeable to overtime, then
overtime at 150 regular time may be cheaper
• Overhead rates in manufacturing can be 300-450

64
Elements of Overhead Rates (Indirect Costs)
• Building maintenance
• Building rent
• Cafeteria
• Clerical
• Consulting
• Corporate Salaries
• Depreciation of equip.
• Executive Salaries
• Group insurance
• Holidays
• Moving/storage exp.
• Personnel recruitment
• Retirement plans
• Sick leave
• Telephone/Utilities
• Vacation

65
Why are Overhead Rates of Interest to Project
Management???
• These rates must be included in any project cost
calculation!!!
• The contractor is going to pay both your direct
and your indirect overhead costs if yours is the
winning bid
• Where do the costs associated with bidding and
proposing go? Does anybody pay for them or are
they just a SUNK cost???

66
Lets REVIEW What are the Major Cost Components?
• Salary structure
• Labor hours required
• Cost of materials and support

67
Cost of Materials??
• Required Software
• Diet coke, pizza

68
Materials Support Costs
• Are submitted by month for each month of the
project
• An escalation factor for material costs must be
applied

69
Pricing out the WorkSTEPS (from Kerzner, p. 738)
• Provide a complete definition of the work
requirements
• Establish a logic network with checkpoints
• Develop the work breakdown structure
• Price out the WBS

70
Pricing out the Work--STEPS, Contd
• Review WBS costs with each functional manager
• Decide on the basic course of action
• Establish reasonable costs for each WBS element
• Review the base case costs with upper-level
management

71
Pricing out the Work--STEPS, Contd
• Negotiate with functional managers for qualified
personnel
• Develop the linear responsibility chart
• Develop the final detailed and PERT/CPM schedules
• Establish pricing cost summary reports
• Document the result in a project plan

72
Smoothing out Department Man-hours
• Ramp-up at project initiation and Ramp-down at
project completion cause step functions in
manpower requirements, as shown in Figure 14-8
• Functional managers attempt to SMOOTH this out
• QUESTION?? Does the department have sufficient
resources to fulfill the requirements?

73
Smoothing out Department Man-hours
• ANOTHER QUESTION?? Can the departments ramp-up
fast enough?

74
The Pricing Review Procedure
• Based on Kerzners work
• Remember only 30 days to get the proposal out and
this is one of 13 steps
• Many contractors require the actual team members
to be identified in the proposal
• What solution comes to mind?

75
Systems Pricing
• The project pricing model (also called the
strategic planning model) acts as a management
information system
• Also provides management with an invaluable tool
for performing perturbation analysis on the base
case costs

76
Developing the Supporting/Backup Costs
• Some proposals require backup support
• When required backup support must be included in
the pricing
• An issue is the type of contract

77
Types of contracts
• Fixed-price (developer assumes all of the risk)
• Cost-plus (contractor pays for every hour
invested and thus assumes all the risk)
• An infinite array in between these

78
The Low-Bidder Dilemma
• The price of your contract will definitely affect
the viability of your proposal
• A low price on cost-plus type proposals is
suspect
• A low price on fixed-price contracts may be
perceived as impossible and undoable, or if
accepted will lead to a disaster

79
The Price on the Proposal is always relative to
• the competitive prices
• the customer budget
• the bidders cost estimate
• IN ANY CASE, LOW PRICING WITHOUT MARKET
INFORMATION IS MEANINGLESS

80
If its a new market for the Developer
• Cost sharing may be an effective strategy
• Bidding below your actual costs is commonplace
• Contractors objectives might include system life
cycle cost or unit production cost

81
The Bottom Line on Price
• THE LOWEST BIDDER IS NOT NECESSARILY THE
AUTOMATIC WINNER
• Makes project a risky image regarding cost,
performance or schedule
• The ability to perform under contract is a
definite consideration
• A compliant, technically and managerially sound
proposal based on past experience, with
realistic, well-documented cost figures, is often
chosen over the lowest bidder

82
Special Problems
• Pricing must include an understanding of cost
control--how costs are billed back to the project
• There are three situations
• Work is priced out at the department average, and
all work performed is charged to the project at
the department average, regardless of who
performed the work
• Work is priced out at the dept.. average, but all
work performed is billed back to the project at
the actual salary of the employees who performed
the work
• Work is priced out at the actual salary of those
employees who will perform the work, and the cost
is billed back the same way.
• This is the ideal situation

83
This is as far as we will go with these
slidesignore the remainder
84
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85
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86
Estimating Pitfalls
• The buy-in decision is the most serious pitfall
because it means that the project will be
under-funded
• If the customer initially defines the
requirements and you (the developer) further
refine them and the customer doesnt understand
what youve done, whose fault is it?

87
Estimating High-Risk Projects
• Validity of historical estimates determine the
difference between high-risk and low-risk
projects
• Estimating high-risk projects is commonly done by
means of the rolling wave or moving window
approach
• For a 12-month project the first six months are
estimated to level 5, while the last six months
are estimated to level two only.
• As the project proceeds more and more of the last
six months is estimated to level 5
• See Figure 14-13, Kerzner

88
Project Risks
• RISKS--Factors that increase the probability that
the projects goals of time, cost and performance
will not be met
• See Figures 14-14, 14-15 and Table 14-13
(Especially useful)

89
Common Risks include
• Poorly defined requirements
• Lack of qualified resources
• Lack of management support
• Poor estimating
• Inexperienced project manager

90
Tools to Aid in Risk Identification
• Decision Support Systems
• Expected value measures
• Trend analysis/projection
• Independent reviews and audits

91
Six steps to risk management are
• Identification of the risk
• Quantification of the risk
• Prioritizing the risk
• Developing a strategy for managing the risk
• A contingency plan
• Project sponsor/executive review
• Taking action

92
The Disaster of Applying the 10 Solution to
Project Estimates
• 10 is taken from every on-going project to
create a budget out of thin air
• The result is havoc on top of chaos
• Most high-level executive committees do not
realize the impact of adopting the 10 solution
• A REDUCTION IN BUDGET MUST BE ACCOMPANIED BY A
TRADEOFF IN TIME OR PERFORMANCE

93
The Disaster of the 10 Solution, Contd
• 90 of the budget generates 10 of the desired
service or performance levels and the remaining
10 will generate the last 90 of the desired
service or performance
• If there is FAT, i.e., padding, it may, however,
be possible to sustain a cut in the project
budget without major consequence
• Most projects do not have FAT

94
Cost vs. Performance
• I much prefer the word performance to quality
here
• A 10 reduction in cost can be expected to
produce much greater than a 10 reduction in
performance

95
More on the 10 Solution
• 10 reduction solutions should be undertaken only
after a careful impact study has been completed
• A far better choice is for the executive
committee to cancel or de-scope some projects in
order to release funds

96
14.19 Life-Cycle Costing (LCC)
• These are the total costs to the organization for
the ownership and acquisition of a product over
its full life
• Especially appropriate for in-house software
development projects, but is used in some
(outhouse) contracted projects as well

97
Life-cycle cost breakdown
• R D Costs (Definition, Analysis)
• Production cost (Design)
• Construction cost (Programming and testing)
• Operation and maintenance cost
• Product retirement cost

98
Life-cycle costing process
• Define the problem
• Define the requirements of the cost model being
used
• Collect historical data-cost relationships
• Develop estimates and test results

99
Successful applications of LCC will
• Provide downstream resource impact visibility
• Provide life-cycle cost management
• Influence RD decision making
• Support downstream strategic budgeting

100
Estimating Methods for LCC
• Method choice is based on the problem context,
operational considerations, etc.
• Informal estimating methods
• Judgment based on experience
• Analogy
• SWAG method, ROM method
• Rule-of-thumb method
• Formal estimating methods
• Detailed (from industrial engineering standards)
• Parametric

101
Figure 14-18
• For every 12 DOD puts into RD, 28 are needed
downstream for production and 60 for operation
and support
• After Conceptual definition and
demonstration/validation, 85 of the lifecycle
decisions are made and cost reduction
opportunities are down to 22

102
14.20 Logistics Support
• A frequent occurrence in software development
where the developer is paid to provide
after-market support in the form of operation and
maintenance on the product (deliverable)
• Recall that after the design phase 85 of the
deliverables life-cycle cost has been committed
and the majority of the total life-cycle cost is
still ahead gtgt 60

103
Performance metrics for Products requiring
Logistics Support
• Suppportability--the ability to maintain or
acquire the necessary human resources to support
the system
• Readiness--measure of how good we are at keeping
the product performing as planned and how quickly
we can make repairs during a shutdown

104
Ten elements of logistics support
• Maintenance planning
• Manpower and personnel
• Supply support
• Support equipment
• Technical data
• See page 765
• Training and training support
• Computer resources support
• Facilities
• Packaging, handling, storage and transportation

105
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106
Estimating --
• An iterative process
• Definition, Analysis, Design
• After Definition, 50-100 off
• After Analysis, 25-50 off
• After Medium level design--within 10
• A good WBS is absolutely essential to do
estimating

107
Estimating Techniques
• Professional Judgment
• Developer estimate
• History (database)
• Formulas

108
Use of Professional Judgment
• Based on WBS, an expert judgment estimate is made
for each work package
• Amazingly accurate when experts are available
• Often, however experts arent available

109
Developer Estimate
• The programmer assigned to the work package will
make every effort to complete the task in the
time he estimated it would take

110
Use of History Database
• For this to work, your firm must keep a history
database
• The database should record how long each task
took and who did the task
• Break new projects up into tasks that have a
history database
• 8 to 1 productivity ratio between best to worst
professional

111
Questions, Contd
• How much of the total time does Brooks devote to
Definition, Analysis and Design?
• 1/3
• How much time to coding?
• 1/6 to Coding
• How much time to testing?
• 1/4 to component test and early system test
• 1/4 to total system test
• So how much time are you going to devote to
testing in your projects?????

112
Use of Formulas
• COCOMO--project cost, effort, schedule, staffing
for each of the phases
• Preliminary design
• Detailed design
• Code and unit test
• System test
• COCOMO was developed by Barry Boehm in
1981--COnstructive COst MOdel

113
Inputs to COCOMO
• Monthly cost of staff involved
• Factors indicating the general level of
complexity of the software
• Programming practices and tools used
• Experience of staff
• Lines of LOSC--rendering COCOMO unusable

114
Function Points
• A user input
• User display
• Peripheral I/O
• Restructuring data
• Condition checking
• Calculation
• Branching

115
Function point approach--BEFORE YOU LEAP
• Vendor is Gordon Group
• It must know how many LOSC are required for each
function point.
• It calculates LOSC based on function points it
knows about and feeds this into the COCOMO
algorithm

116
Estimacs from CA (Computer Associates)
• Can take into account modern code generation
tools
• Determines effort, but also
• Hardware required
• financial break-even analysis
• risk analysis
• maintenance costs
• Expensive gt 20K

117
Estimating Programming Function Points
• D C ( G J)
• D is the task duration in person-days
• C is the complexity of the task
• G is the assigned persons general experience
• J is the assigned professionals job knowledge
factor

118
Complexity
• Must break task down into its smallest possible
repeatable functions
• Then add up the complexity of each function
• User input, user display, peripheral I/O,
restructuring data, condition checking,
calculation, etc.
• Repeatable functions are called function points.
• Function points are graded as SIMPLE, COMPLEX and
VERY COMPLEX

119
Productivity
• Your average programmer gets a productivity
factor of 1 for G
• Slower programmers get factors gt 1
• Faster programmers get factors lt 1

120
Formula method conclusions
• Will work if you develop accurate factors
• Can be used for any task from building a house to
developing software
• Depends on how well you granularize

121
Estimating The Analysis Phase
• Interviews
• Analyze Existing Documents and Systems
• Prepare Functional Specification
• Presentation

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RATIOS
• PHASE PERCENTAGE
• Definition phase -- 10
• Analysis phase -- 20
• Design phase -- 10
• Programming -- 20
• System test -- 17
• Acceptance -- 7
• Operation -- 16

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This breaks down to
• PLAN -- 40
• BUILD -- 20
• TEST -- 40

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Another Rule of Thumb
• The time to design, document and code a module
• equals the time to debug it
• According to Gildersleeve

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Can you use RATIOS for Forecasting?
• Suppose you found that it took 20 days to do
definition.
• How long, based on ratios will it take to do the
project?

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Estimating Rules
• Never use inexperienced persons to estimate
• Get group estimates if possible
• Never force an estimate on a programmer
• Never take an average of different estimates
• Granularize down to one week or less
• Always add for contingency
• Always quote a range when giving estimates

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Conclusions to Estimating
• Our weakest talent
• Estimating is iterative
• Estimating is still an art

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Scheduling --
• Also assists with estimating, especially when PM
software is used

129
PM software supports
• WBS
• Gantt
• PERT
• Calendar(s)
• Resources and their assignments

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PERT
• Use activity on node approach
• doesnt require dummy activities
• Understand what float is--it is slack
• Critical path is the longest path
• shows precedent activities, relationships
• doesnt show what will be done when, by whom

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Resource allocation
• Assign tasks to individuals whose skill level
• Assign similar tasks to the same person
• Assign time-critical tasks to your most reliable
people
• Assign tasks that communicate to the same
individual to minimize peoples interaction
• Dont assign too many different tasks to any one
individual

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• Add 20 direct time for each additional member on
a professional team
• If it takes 10 person days for one person, it
will take 12 person days for two people, 14.4
person days for three people, etc.

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Cost effects of adding resources
• More resources, gets the project done sooner,
USUALLY
• But it also costs more
• The PM must come up with the best balance,
depending on the priorities set by management or
the user

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Shortening the duration of projects
• Fast tracking
• Crashing
• Adding resources to the critical path
• Allowing your current CP teams members to work
overtime

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Crashing projects
• Crash tasks on the critical path only, only as
long as no other path becomes critical
• If other paths become critical, the analyst must
crash those as well

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Gantt Chart
• a time bar chart
• Invented by Henry Gantt in 1910
• Determine the units of time
• Mark all known calendar events at bottom
• Schedule each activity from PERT

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Use three sets of Gantts
• one for yourself alone, with all float and
contingency visible
• second for the individuals involved--their
resource Gantt, contingencies hidden
• third for distribution to upper
management--contingencies hidden
• Include a 10 contingency into all estimates

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Conclusions to Scheduling
• Use PM software--worth every penny
• Do at least one PERT and one GANTT manually, just
to get a feel for the process

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Recitation
• What is the probability of completing a project
by its estimated completion time??
• What is the formula for calculating the
completion time for a PERT network?
• What is the formula for calculating the standard
deviation of the completion time for a PERT
network?
• Name some processes that are part of project
integration management

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