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Systems Cost Engineering – Program Affordability Management and Cost Control

Methods Track

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Cost estimating for major engineering hardware, software, service and IT projects is critical for ensuring a realistic evaluation of the project or program, to assess its affordability, and for managing the ongoing costs realistically. Traditional cost engineering methods are time consuming, expensive and occasionally irrational. Organizations are increasingly turning to parametrics as a means of managing cost and program affordability.

This paper is based on 25 years of personal experience and many years of joint experience within the PRICE Systems team of the application of cost engineering principles in large engineering and aerospace projects and IT / Business transformation projects in financial services. This paper will explore different applications of parametrics, based on real-life case examples and provide attendees with a detailed guide to the rationale and value of these applications.

Systems Cost Engineering will help cost engineers, the project and program directors, and champions that support them, to understand and apply parametrics to ensure that their programs:

• offer a credible analysis of alternative cost options;
• are never initiated with insufficient funding because of inaccurate estimates of cost or quantification of risks;
• are never diverted from their objective because of a lack of credible cost management;
• share and communicate knowledge of realistic and dynamic cost and productivity metrics amongst the program team;
• are never derailed by surprise cost overruns or schedule delays.


Dale Shermon
Dale Shermon is a Senior Executive Consultant responsible for Training, Customer Support and Consultancy in Northern Europe. He reports to Grahame Jones (PRICE Systems Manager, Northern Europe). Dale has presented courses in hardware estimating, software estimating, life cycle cost, Cost Estimating Relationships, Information Technology, risk analysis and supplier assessment in the UK, Italy, USA, Australia, Taiwan and Germany. He has conducted consulting assignments in UK, Italy, Australia and the Netherlands. He was responsible for the development of the “PRICE HL Questionnaire” within the PRICE Estimating Suite.
Dale was previously working as a Cost Forecaster within Pricing and Forecasting Group (PFG) a support group of the Defence Procurement Agency (DPA) part of the UK Ministry of Defence (MOD). He headed a cell studying submarine platform Whole Life Cycle (WLC) Costs that supported DPA project approvals. He has been parametric cost estimating since 1987.
Dale has held estimating positions in various defence and aerospace companies including. Matra Marconi Space, British Aerospace (Space Systems) Ltd, British Aerospace (Dynamics) Ltd. and Rolls-Royce Ltd. Military Engine Group. During this career he has participated in numerous proposals and studies in engineering fields as varied as satellites, missiles and aero-engines. During his period in the MOD he performed High Level Studies covering all of the armed services.
Dale has presented papers to the European meeting of Space System Cost Analysis Group (SSCAG) in Toulouse, France; the PRICE Symposium in Nice, France, Cambridge and London UK also at the ISPA Conferences in San Diego, California; Frascati, Italy; Denver, Colorado; Seattle, Washington and Orlando, Florida. This final paper “If a little bit of Knowledge is dangerous… what is a lot of Knowledge?” presented with the UK MOD was awarded Best Applications Track Paper for the conference. At ISPA, Seattle the paper entitled “Creating True Concepts, a methodology, not a model” was awarded Best Hardware Track Paper 2006.
He has had articles published in the “Project” magazine of the Association for Project Management, “The Cost Engineer” the journal of the Association of Cost Engineers and the “Defence Management Journal” (DMJ) the management journal for the United Kingdom (UK) Ministry of Defence (MOD)
Dale was the first European to become an International Society of Parametric Analysts (ISPA) Certified Parametric Practitioner in 2003. He has been the tutor for the “Cost Estimating Relationships” session of the ISPA Professional Development Training at the 2004, 2005, 2006 and 2008 conferences
Dale has a Bachelor of Arts Degree from the Open University and is a member of The Association of Cost Engineers (ACostE) and The Association of Project Management (APM). Dale has a Certified Diploma in Accounting and Finance from the Association of Chartered Certified Accountants (ACCA).