Integrating Homegrown CERs in a Single Commercial Estimating Toolset
Most organizations use a combination of commercial models, public models and proprietary CERS to develop confidence in their estimates. Homegrown CERs in the form of simple cost factors, equations, curves, and rules of thumb build confidence in estimates if they are derived from known, reliable data. However, most organizations have difficulty hosting, sharing and integrating their CERs with other estimating models. Homegrown CERs are commonly hosted in arcane Excel spreadsheets, and are not easily understood, audited or reused.
When there is no common framework, typical problems include:
– More cost research money is spent on application development than on actual CER development
– Usually only one expert knows how to operate the model
– Models are Excel-based and therefore difficult to distribute and collaborate
– Difficult to link to pricing systems, ERPs and other data sources
– Maintenance becomes more of a software effort than a operation research (managing upgrades, GUI, reports,)
– Models are not easily audited
Using real life examples, this paper will demonstrate how homegrown cost estimating relationships can be quickly modeled in a standard framework that enables their integration with commercially available models, internal systems and data sources. The paper will quantify the return on investment in this approach. And emphasize that the goal for any estimating organization is not to develop software; the goal is to establish a more efficient, reliable estimating process & system through speed, accuracy and confidence.
Anthony A. DeMarco
Mr. DeMarco is the President and Managing Member of PRICE Systems L.L.C., a privately held company in Mt. Laurel, New Jersey. PRICE is the world leader in Parametric Planning, Estimating, and Budgeting tools and services with clients in the North America, South America, Europe, and Asia. PRICE introduced the first commercially available Hardware and Software Cost Estimating Models in 1975 and attained its industry leading position through dedication to speed, quality and customer satisfaction.
Mr. DeMarco received a Bachelors degree in Mathematics from St. Joseph’s University in Philadelphia, Pennsylvania, and a Masters degree in Computer Science from the New Jersey Institute of Technology in Newark, NJ.
Since joining PRICE Systems in 1981, Mr. DeMarco’s accomplishments include the development of the PRICE electronics cost model (PRICE M), major enhancements to the PRICE hardware model (PRICE H), and the personal computer program XPERT/H. As PRICE Product Development Manager for several years, Mr. DeMarco led a team of operations researchers, logisticians and computer scientists in the development of parametric models and tools to serve the cost estimating and analysis community. During his tenure as the leader of PRICE Systems, PRICE migrated its tools to desktop and client/server computing platforms and has introduced several new services including professional services, tailored on-site training, the PRICE Knowledge Manager, and PRICE TruePlanning.
Mr. DeMarco is a recognized expert and frequent speaker on predictive cost modeling for optimizing planning, budgeting, and cost management. He has contributed over 20 papers on cost estimating, analysis and management and is cited on two U.S. patents for cost estimating techniques. In 1997, Mr. DeMarco received the highest honor bestowed by the International Society of Parametric Analysts (ISPA), the Freiman Award. In 2001, Mr. DeMarco served on the NASA International Space Station Management and Cost Evaluation Task Force (IMCE) to help address cost growth on the program. Mr. DeMarco works with many cost engineering societies and is the President of the National Defense Industrial Association (NDIA) Delaware Valley Chapter.
In 1998, Mr. DeMarco led the management buyout of the PRICE Systems business unit from the Lockheed Martin Corporation to form PRICE Systems, L.L.C. PRICE is now an independent employee-owned business dedicated to helping enterprises sustain profitable growth through faster, better planning, estimating and budgeting.