Basis of Estimate for IT Services


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Based on a recommended practice from AACEi the NESMA has produced a framework for estimating IT Services.

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Basis of Estimate for IT Services

  2. 2. Background NESMA 2020 Vision of expanding the playing field by collaboration AACE International Association for the Advancement of Cost Engineering International NESMA interactive member session April 2012 Vision of expanding the playing field by collaboration => WG Estimation
  3. 3. Functional Sizing FSM Methods (ISO) COSMIC, NESMA, IFPUG, FiSMA, Mark II Benchmarking: ISBSG International Software Benchmarking Standards Group => ISO standard (based on other industries) Business Needs, what to do with “points” Benchmarking Estimation Estimation: ??? => standard (based on other industries) Basis of Estimate: Best Practise 34R-05
  4. 4. Estimation Challenges Estimation Process Consistent Controllable Estimation Verification Defendable Comparable Estimation Validation Defendable Benchmark
  5. 5. Purpose of Basis of Estimate Document the overall engagement scope. Communicate the estimator’s knowledge of the engagement by demonstrating an understanding of scope, quality and duration as it relates to cost. Alert the stakeholders to potential cost risks and opportunities. Provide a record of key communications made during estimate preparation. Provide a record of all documents used to prepare the estimate. Act as a source of support during dispute resolutions. Establish the initial baseline for scope, quantities, effort, duration and cost for use in engagement control. Provide the historical relationships between base-lined estimates throughout the project lifecycle. Facilitate the review and validation of the estimates.
  6. 6. Content (I) – General Purpose Engagement Scope Description Decomposes the solution into its constituent elements; the Product Breakdown Structure (PBS) Methodology Primary estimating methodology (functional size based, expert based, analogy based, process metrics based, parametric) Estimate Classification Cost Estimate Classification System, AACE Practice 17R-97
  7. 7. Content (II) – Basis Design Estimate deliverables (process); architectural documents Sizing Units (e.g. Functional Size, Technical Size, Support Size) Effort Methods (and tools) used to convert to size into effort Planning Activities, Milestones and Constraints Cost Methods and sources used for determining all unit, effort, subcontract, material and expenditures cost
  8. 8. Content (III) – Risks Allowances Assumptions Exclusions Exceptions Anomalies or variances to standard estimating practices Risks and Opportunities High risk or opportunity related to cost, duration, quality and/or safety Containments Measures included to prevent and/or mitigate the identified risks Contingencies
  9. 9. Content (IV) Reconciliation major differences between the new or re-baselined estimate and the last published estimate Benchmarking comparisons of overall estimate metrics, ratios, and factors with similar engagements, historical data, and industry data Quality Assurance Estimating Team Appendices:  Estimate Deliverables Checklist  Reference Documents sizing report, requirements, designs, texts, notes, specifications  Additional Attachments (optional) reconciliation report, benchmarking report, risk analysis report
  10. 10. Schedule for publication Base Document 31-08 ready Review (1) NESMA [45 days] 01-09 15-10 started Rework Version 0.5 16-10 31-10 Review (2) MAIN [45 days] 01-11 15-12 Rework Version 0.8 16-12 15-01 Review (3) AACE International [45 days] 16-01 28-02 Rework Version 1.0 publication AACE / MAIN 01-06
  11. 11. AcknowledgementWorking Group Estimation Ton Dekkers (Chair) Galorath International Hans Bernink ING Martin Eisma CGI Ray Sadal CapGemini Jelle de Vries Ordina
  12. 12. RequestWho wants to join the review of the Basis of Estimate – Software Services Contact Ton Dekkers