Lviv PMDay 2016 S Олег Мізьов: Smart Proposal for your Fixed Price Deal
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Олег Мізьов: Smart Proposal for your Fixed Price Deal
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Lviv PMDay 2016 S Олег Мізьов: Smart Proposal for your Fixed Price Deal
- 1. Smart Proposal For You Fixed Price Deal by Oleg Mizov PMO Competence Manager omizov@softserveinc.com
- 3. • Standalone document • Clearly defines project scope, timeframes and costs. • Has all necessary legal sections • In most cases should have a detailed description of chosen development approach, risk and change management strategies, etc. Project Proposal
- 4. • Solution Description • Architecture Overview and Solution Design • Integration Approach and Deployment Aspects • UI/UX Approach • Non-Functional Requirements and QAS • Project Scope and Out-Of-Scope • Assumptions. Limitations. Dependencies • Deliverables • Schedule and Milestones • Project Cost Project Objectives
- 5. Risks Management – is the only instrument in arsenal of Project Manager how to proactively influence on a project future. Statements: • Risks identification and assessment sessions (part of Management Process) • Risks monitoring and control activities • Risks communications • List of already identified risks and mitigation strategies Risks Management
- 6. Change management is a systematic approach to dealing with change both from the perspective of internal and external changes. Statements: • Types of changes • Change Control Board • Change flow • Change management system Change Management
- 7. • Definition of Done • Acceptance definition • Acceptance terms and period • Defects classification • Defects fixing obligations and SLAs • Acceptance scenarios Work Acceptance
- 8. Creation Flow for a Smart Proposal
- 9. Proposal Creation Flow 1 Define Scope 2 Architecture WBS 3 DEV estimates QC estimates Other efforts estimates Finalize assumptions 4 Determine duration constraints 5 Determine Team and Resources 6 Create initial schedule 7 Finalize Risks Plan Risk responses Add reserves 8 Calculate costs Determine budget
- 10. Proposal Creation Flow PM BA Architect Define Scope Architecture WBS Estimates, Assumptions Determine Duration, Team Create Initial Schedule Identify Risks, Plan Responses, add reserves Calculate Costs and Budget
- 11. Estimations
- 12. Estimation approach Category Examples of the Technique Analogy-based estimation Formal estimation model ANGEL, Weighted Micro Function Points WBS-based (bottom up) estimation Expert estimation Project management software, company specific activity templates Parametric models Formal estimation model COCOMO, SLIM, SEER-SEM, TruePlanning for Software Size-based estimation models Formal estimation model Function Point Analysis, Use Case Analysis, SSU (Software Size Unit), Story points-based estimation in Agile software development Group estimation Expert estimation Planning poker, Wideband Delphi Mechanical combination Combination-based estimation Average of an analogy-based and a Work breakdown structure-based effort estimate Judgmental combination Combination-based estimation Expert judgment based on estimates from a parametric model and group estimation Estimation Techniques
- 13. Pert Technique
- 14. PERT Technique Pros: • Shows uncertainty • Allows to calculate probability of hitting Cons: • Won’t help if uncertainty is not high (1o-2m-3p • Need to train people
- 15. For high-level estimation or estimates validation: • Analogous estimation by historical database For project planning and budgeting use a combinations of several techniques • Step 1: Bottom – Up WBS decomposition • Step 2: PERT for development tasks • Step 3: Parametric estimates for non-development activities (like bugs-fixing, automation testing, manual QC, etc.) • Step 4: Statistics-based reserves calculations Best Practice in Estimation
- 16. Team
- 17. • Team composition is determined by a Project Manager based on : • A project scope statement, Gant chart; • Project constraints; • List of purchases; • Technology stack; • Existing team availability; • Architecture recommendation. Team Composition
- 18. • Team location is determined based on : • Staffing urgency; • Cost baselines; • Available resource in pools. Team Location
- 19. Team Release Plan • Release Plan is: • Developed during the project planning and updated throughout all phases • Communicated to the project team • Communicated to a Client
- 20. Reserves
- 21. Expected Monetary Value = Likelihood (%) * Consequence ($) Contingency Reserves
- 22. Management Reserve • Is an amount of a total allocated budget. • Is stated as 5%-15% from total budget depending on a type of a program. • Is established in the last turn after full scope and budget are in place.
- 23. Typical (Known) Reserves Reserve Name Percentage from dev estimate Agile Ceremonies 5%-20% Sprint Stabilization 10% Release Stabilization 0,25 - 1 months Dev Estimate Risk buffer 10% Sprint 0 0,25 -0,5 months Communication 5%-15% Management 5% Reserves to be considered during dev estimation: Manual/Automation QC estimates Unit Testing Code Reviews Bug Fixing 20% - 70% 0% - 20% 5% - 10% 15% - 40% Hand Off 0,5 months
- 24. Schedule vs Budget Reserves • Project Duration < 3 months. • Only schedule reserves are added. • Budget buffers do not make sense due to lack of time to increase and train a team. • Project Duration > 3 months. • Both cost and schedule reserves are added. • Reserve sizes are calculated based on qualitative risk analysis
- 26. Determining Budget. Slow (Ideal) Approach
- 27. Determining Budget. Fast (Realistic) Approach • Step 1. Calculate Full(!) Team Cost per one month • Step 2. Team Cost * Project Duration • Step 3. Add budget for Team Ramp up and Project Acceptance phases • Step 4. Add budget for Procurements • Step 5. Add Bonuses & Team Buildings • Step 6. Add Business trips • Step 7. Allocate Contingency and Management reserves
- 29. Questions?
- 31. Schedule Performance Index • The Schedule Performance Index tells you how efficiently you are actually progressing compared to the planned progress • Schedule Performance Index = (Earned Value)/(Planned Value) 0.8 0.8 0.9 1.1 1.1 1.0 1.0 0.9 1.0 1.0 0.0 0.2 0.4 0.6 0.8 1.0 1.2 Sprint 1 Sprint 2 Sprint 3 Sprint 4 Sprint 5 Sprint 6 Sprint 7 Sprint 8 Sprint 9 Sprint 10 Schedule Performance Index Schedule Performance Index
- 33. Cost Performance Index • The Cost Performance Index helps you analyze the efficiency of the cost utilized by the project. • Cost Performance Index = (Earned Value)/(Actual Cost)
Editor's Notes
- Have you ever considered that risks can and should be also estimated? If not, I recommend reading about Expected Monetary Value. In brief, this technique converts risk into a number, so that the latter can be added into contingency reserve. Let’s see a table with analyzed risks. Columns mean the probability the risk happens and rows stand for impact of corresponding risk. Now, you as a manager should be looking in the red zone, where both probability and severity are high. The monetary value of the risk is the multiplication of both. For example, a risk with a probability to happen equal 80% and the cost of consequence equal $5K will have a value $4K. Does this makes sense? If it does, your next step is to identify risk values of all risks in red zone and sum them. The total number will be your contingency cost reserve.
- Have you ever considered that risks can and should be also estimated? If not, I recommend reading about Expected Monetary Value. In brief, this technique converts risk into a number, so that the latter can be added into contingency reserve. Let’s see a table with analyzed risks. Columns mean the probability the risk happens and rows stand for impact of corresponding risk. Now, you as a manager should be looking in the red zone, where both probability and severity are high. The monetary value of the risk is the multiplication of both. For example, a risk with a probability to happen equal 80% and the cost of consequence equal $5K will have a value $4K. Does this makes sense? If it does, your next step is to identify risk values of all risks in red zone and sum them. The total number will be your contingency cost reserve.
- Have you ever considered that risks can and should be also estimated? If not, I recommend reading about Expected Monetary Value. In brief, this technique converts risk into a number, so that the latter can be added into contingency reserve. Let’s see a table with analyzed risks. Columns mean the probability the risk happens and rows stand for impact of corresponding risk. Now, you as a manager should be looking in the red zone, where both probability and severity are high. The monetary value of the risk is the multiplication of both. For example, a risk with a probability to happen equal 80% and the cost of consequence equal $5K will have a value $4K. Does this makes sense? If it does, your next step is to identify risk values of all risks in red zone and sum them. The total number will be your contingency cost reserve.
- Have you ever considered that risks can and should be also estimated? If not, I recommend reading about Expected Monetary Value. In brief, this technique converts risk into a number, so that the latter can be added into contingency reserve. Let’s see a table with analyzed risks. Columns mean the probability the risk happens and rows stand for impact of corresponding risk. Now, you as a manager should be looking in the red zone, where both probability and severity are high. The monetary value of the risk is the multiplication of both. For example, a risk with a probability to happen equal 80% and the cost of consequence equal $5K will have a value $4K. Does this makes sense? If it does, your next step is to identify risk values of all risks in red zone and sum them. The total number will be your contingency cost reserve.
- Have you ever considered that risks can and should be also estimated? If not, I recommend reading about Expected Monetary Value. In brief, this technique converts risk into a number, so that the latter can be added into contingency reserve. Let’s see a table with analyzed risks. Columns mean the probability the risk happens and rows stand for impact of corresponding risk. Now, you as a manager should be looking in the red zone, where both probability and severity are high. The monetary value of the risk is the multiplication of both. For example, a risk with a probability to happen equal 80% and the cost of consequence equal $5K will have a value $4K. Does this makes sense? If it does, your next step is to identify risk values of all risks in red zone and sum them. The total number will be your contingency cost reserve.
- Have you ever considered that risks can and should be also estimated? If not, I recommend reading about Expected Monetary Value. In brief, this technique converts risk into a number, so that the latter can be added into contingency reserve. Let’s see a table with analyzed risks. Columns mean the probability the risk happens and rows stand for impact of corresponding risk. Now, you as a manager should be looking in the red zone, where both probability and severity are high. The monetary value of the risk is the multiplication of both. For example, a risk with a probability to happen equal 80% and the cost of consequence equal $5K will have a value $4K. Does this makes sense? If it does, your next step is to identify risk values of all risks in red zone and sum them. The total number will be your contingency cost reserve.
- Have you ever considered that risks can and should be also estimated? If not, I recommend reading about Expected Monetary Value. In brief, this technique converts risk into a number, so that the latter can be added into contingency reserve. Let’s see a table with analyzed risks. Columns mean the probability the risk happens and rows stand for impact of corresponding risk. Now, you as a manager should be looking in the red zone, where both probability and severity are high. The monetary value of the risk is the multiplication of both. For example, a risk with a probability to happen equal 80% and the cost of consequence equal $5K will have a value $4K. Does this makes sense? If it does, your next step is to identify risk values of all risks in red zone and sum them. The total number will be your contingency cost reserve.
- Have you ever considered that risks can and should be also estimated? If not, I recommend reading about Expected Monetary Value. In brief, this technique converts risk into a number, so that the latter can be added into contingency reserve. Let’s see a table with analyzed risks. Columns mean the probability the risk happens and rows stand for impact of corresponding risk. Now, you as a manager should be looking in the red zone, where both probability and severity are high. The monetary value of the risk is the multiplication of both. For example, a risk with a probability to happen equal 80% and the cost of consequence equal $5K will have a value $4K. Does this makes sense? If it does, your next step is to identify risk values of all risks in red zone and sum them. The total number will be your contingency cost reserve.