Portfolio Management: A Parameter Approach
My paper outlines one high level method of managing a portfolio of future projects from pre-concept into acquisition phases and examines current practices and tool set requirements at the same time; examines the limitations of the current toolset and the possibilities of inclusion of probabilistic risk calculations via use of individual program risk registers.
My paper delves into the requirements for a tool set and management process which could provide a real alternative solution to the challenges posed when attempting use of very large complex spreadsheets for the same purpose given constraints on typical IS/IT, the method requires no writing of code (visual basic) and no creation of macros thus obviating the need for extensive validation and verification activity on a large spreadsheet and allows reviewers to concentrate instead on program data and analysis.
The technique proposed utilises proven parametric techniques to provide high level forecasts of ‘rough order of magnitude (RoM) or better costs of individual future systems as an integrated process suitable for Capability based decision making. The tool set permits grouping into User or organisational Sectors (Air, Land, Sea, Space etc).This allows rapid changes to scope and timescales to obtain a revised estimate; includes uncertainty and rapid re-estimation based on the changes (Analysis of Alternatives (AoA)) and permits comparison with previously allocated budgets. Importantly the toolset permits the overall driver effects to be seen in both cost and schedule results – not obtainable using spreadsheet methods which are normally divorced from parametric and bottoms up program models and work on ‘big ticket’ items rather than true drivers.
The paper makes use of results obtained from a quick analysis of a public domain “live” dataset. I will set out to show how future programs and budgets can be managed more effectively across time from ‘blue skies’ to acquisition with increasing certainty using better methods. I will also consideration changes to organisational process related to budget formulation and how that may be included.
Andy is a Principal Consultant with PRICE Systems (UK) and is responsible for parametric and costing consultancy and training delivery to customers in the UK, Europe and Australia.
Andy joined PRICE in 2010 after a 37 year career in UK MoD Procurement Costing organisations and was latterly based at Abbey Wood, Bristol where he managed the Software and Electronic Systems Team responsible for forecasting costs of future Electronic Systems and Software; duties included review and generation of costing policy, methods and process development as well as in 2008, initiating the involvement of and providing background information to the Gray Study team which helped directly in provision of approximately £45M of additional funding to restructure and develop the UK MoD costing organisation through 2014.
Andy became involved with cost estimating responsibilities in 1983 after being responsible for deep repair of rotary wing avionics. He has prepared hardware and software cost estimates for navy sonars of all types, torpedoes,data highway, radars (air & ground) and other electronic systems, communication equipments and travelling wave tubes. Andy was PRICE (parametric) trained in 1989 and shortly afterwards took over as manager of the underwater weapons Life Cycle Cost cell to develop ‘in service’ costing methods and processes. From 1994 to 2010 Andy headed a team responsible for developing and providing cost forecasts of future electronic and software intensive systems across all defence sectors. He represented UK costing views on a number of international collaborative programmes and was a member of the tri-lateral SISAIG group concerning ‘system of systems’ estimating challenges.
Andy’s duties also included policy development and provision of software advice to the MoD community and developed an agreed Software MSc syllabus, provided occasional lecturing support to internal UK MoD project management and cost estimating training courses and at Cranfield University on their short course in Cost Engineering. He wrote the first edition of the Cost Forecasting Guide. He is SCEA qualified as a Certified Cost Estimator and Analyst and has reached the re-certification point.
He has also presented many papers at the European and North American Price Symposia, SCAF, EACE, CEC, ISPA and SCEA; on the way a couple of ISPA/SCEA “best paper” awards have been achieved. Andy was European Price “Parametrician of the Year” in Madrid 2001. An ISPA member, he was elected in 2005 to the ISPA Board of Directors and served until June 1011 and is now a member of the SCAF Board.
Interests outside work include a life-long interest in amateur radio, astronomy and reading.