Summary

Estimate effort and cost for work products and tasks based on estimation rationale.

Description

Estimates of effort and cost are generally based on results of analysis using models or historical data applied to size, activities, and other planning parameters. Confidence in these estimates is based on rationale for the selected model and the nature of the data. There can be occasions when available historical data do not apply, such as when efforts are unprecedented or when the type of task does not fit available models. For example, an effort can be considered unprecedented if the organization has no experience with such a product or task.

Unprecedented efforts are more risky, require more research to develop reasonable bases of estimate, and require more management reserve. The uniqueness of the work is documented when using these models to ensure a common understanding of any assumptions made in the initial planning phases.

Example Work Products



  1. Estimation rationale
  2. Effort estimates
  3. Cost estimates


Subpractices



1. Collect models or historical data to be used to transform the attributes of work products and tasks into estimates of labor hours and costs.

Many parametric models have been developed to help estimate cost and schedule. The use of these models as the sole source of estimation is not recommended because these models are based on historical work data that may or may not be pertinent to the planned work. Multiple models and methods can be used to ensure a high level of confidence in the estimate.

Historical data should include the cost, effort, and schedule data from previously executed work and appropriate scaling data to account for differing sizes and complexity.



2. Include supporting infrastructure needs when estimating effort and cost.

The supporting infrastructure includes resources needed from a development and sustainment perspective for the product.

Consider the infrastructure resource needs in the development environment, the test environment, the production environment, the operational environment, or any appropriate combination of these environments when estimating effort and cost.

 

Examples of infrastructure resources include the following:
  • Critical computer resources
  • Tools with which service teams will be equipped
  • Facilities, machinery, and equipment



3. Estimate effort and cost using models, historical data, or a combination of both.

 

Examples of effort and cost inputs used for estimating typically include the following:
  • Estimates provided by an expert or group of experts (e.g., Delphi Method)
  • Risks, including the extent to which the effort is unprecedented
  • Critical competencies and roles needed to perform the work
  • Travel
  • WBS
  • Selected work lifecycle model and processes
  • Lifecycle cost estimates
  • Skill levels of managers and staff needed to perform the work
  • Knowledge, skill, and training needs
  • Service agreements for call centers and warranty work
  • Direct labor and overhead
  • Level of security required for tasks, work products, hardware, software, staff, and work environment
  • Facilities needed (e.g., for developing and maintaining the service system and for service delivery)
  • Service and service system requirements
  • Product and product component requirements
  • Service strategy
  • Size estimates of work products, tasks, and anticipated changes
  • Cost of externally acquired products
  • Capability of tools provided
  • Capability of manufacturing processes