Basis of EstimateSoftware Services

AACE Recommended Practice – Draft CE74

NESMA WG ESTIMATION

BackgroundNESMA 2020

Vision of expanding the playing field by collaborationAACE International

Association for the Advancement of Cost Engineering Internationalwww.aacei.org

NESMA interactive member session April 2012Vision of expanding the playing field by collaboration

=> WG Estimation

Functional SizingFSM Methods (ISO)

COSMIC, NESMA, IFPUG, FiSMA, Mark IIBenchmarking: ISBSG

International Software Benchmarking Standards Group=> ISO standard (based on other industries)

Business Needs, what to do with “points”BenchmarkingEstimation

Estimation: ???=> standard (based on other industries) Basis of Estimate: Best Practise 34R-05

Estimation ChallengesEstimation Process

ConsistentControllable

Estimation VerificationDefendableComparable

Estimation ValidationDefendableBenchmark

Purpose of Basis of EstimateDocument 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.

Content (I) – General PurposeEngagement Scope Description

Decomposes the solution into its constituent elements; the Product Breakdown Structure (PBS)

MethodologyPrimary estimating methodology (functional size based, expert based, analogy based, process metrics based, parametric)

Estimate ClassificationCost Estimate Classification System, AACE Practice 17R-97

Content (II) – Basis Design

Estimate deliverables (process); architectural documents

SizingUnits (e.g. Functional Size, Technical Size, Support Size)

EffortMethods (and tools) used to convert to size into effort

PlanningActivities, Milestones and Constraints

CostMethods and sources used for determining all unit, effort, subcontract, material and expenditures cost

Content (III) – Risks AllowancesAssumptionsExclusionsExceptions

Anomalies or variances to standard estimating practicesRisks and Opportunities

High risk or opportunity related to cost, duration, quality and/or safety

ContainmentsMeasures included to prevent and/or mitigate the identified risks

ContingenciesManagement Reserve

Content (IV)Reconciliation

major differences between the new or re-baselined estimate and the last published estimate

Benchmarkingcomparisons of overall estimate metrics, ratios, and factors with similar engagements, historical data, and industry data

Quality AssuranceEstimating TeamAppendices:

Estimate Deliverables Checklist Reference Documents

sizing report, requirements, designs, texts, notes, specifications Additional Attachments (optional)

reconciliation report, benchmarking report, risk analysis report

Schedule for publicationBase Document 31-08 readyReview (1) NESMA

[45 days] 01-0915-10 startedRework Version 0.5 16-1031-10Review (2) MAIN

[45 days] 01-1115-12Rework Version 0.8 16-1215-01Review (3) AACE International

[45 days] 16-0128-02

Rework Version 1.0publication AACE / MAIN 01-06

AcknowledgementWorking Group EstimationTon Dekkers (Chair) Galorath InternationalHans Bernink INGMartin Eisma CGIRay Sadal CapGeminiJelle de Vries Ordina

Who wants to join the review of the

Basis of Estimate – Software Services

ContactTon Dekkers

ton.dekkers@nesma.nl

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