COTS Risk Models: Basic Advice for Avoiding Pitfalls
This paper will discuss a few of the common pitfalls to cost risk estimating, especially those caused by junior estimators lack of familiarity with popular risk tools. None of these tips break new ground, apply fresh theories, or even offer advice that is outside of the “help” section of each tool’s operating manual. But nonetheless, these tips will help a new estimator achieve a new level of understanding and insight which will ultimately lead to higher quality and more reliable estimates. The intent is to educate users to understand their project needs and establish a Commercial Off The Shelf (COTS) risk analysis setup that will fulfill requirements and by avoiding pitfalls and following best- practices. Some COTS cost risk tools allows users to sidestep complicated, yet important, steps in order to be user-friendly. Point-and-click features of some models occasionally allow users to blindly make mistakes which reduces an estimate’s quality. Ultimately the paper will review 1) what we are doing wrong now by following default settings, 2) what needs to be changed, and 3) what results to expect when cost risk models are implemented correctly.
John Teal is an associate with Booz Allen Hamilton in Colorado Springs and works in the areas of cost analysis, life cycle cost estimating, business case analysis, cost risk analysis, and economic analysis. His four years of cost and finance experience have been on space and aircraft programs for the Air Force, intelligence agencies, DoD joint programs, and NASA. He is currently pursuing an MBA at Regis University and has a Bachelor of Science degree from the United States Military Academy at West Point. Mr. Teal is a Certified Cost Estimator/Analyst (CCE/A) and a Project Management Professional (PMP). He is a member of the Pikes Peak SCEA chapter where he serves as the Program Chair. He can be reached at email@example.com or 719-387-3757.