Keith Ciocco's blog

Keith Ciocco's blog

What Are We Missing in the Proposal Process to Win Business?

Major corporations spend millions of dollars each year writing proposals to win software and systems business. They typically have a team of people that spend hours or days in strategy meetings to write what they hope will be a winning bid. Usually these companies are responding to a “Request for Proposal” which is sent out to a number of competitors. It’s almost like a sporting event. Let the games begin! Our team versus theirs. Sometimes jobs are on the line. No one wants to have to lay off people because there is not enough business coming in the door.

As part of this process, a project plan will be created. Oftentimes the team will work out a plan based on some previous experience and the opinions of a number of subject matter experts. Usually the plan will include a detailed spreadsheet with a larger number of tasks and the hours that it will take to complete each task.

The fact is most people don’t have a way to validate whether or not the plan is reliable. They also can’t see what chance they have of achieving their overall promised schedule, quality, and budget goals. They don’t have an easy way to negotiate these proposal decisions internally or with the client.

What's missing? A top-down, empirically-based estimate. Running a top-down estimate allows the proposal team to generate a “big picture” estimate for cost, duration, risk, and quality based on historical data and time tested mathematical models. With SLIM-Estimate (shown below), the team can run an overall project level estimate, and sanity-check their proposal with industry trends to make sure that their numbers are competitive and realistic.

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Demand Management

How Can We Fix the Disconnect Between Software Vendors and Their Clients?

QSM is a leading demand and vendor management company. We have many years of experience working with outsource management professionals, evaluating software project vendor bids and monitoring the development progress of those bids for our clients. We are often hired to help them with their vendor management process because their past projects have failed to meet cost, effort, reliability, and duration expectations. 

It starts with the independent estimate and bid evaluation process. Our main clients are CIOs, PMO managers, purchasing managers, software project managers, and business stakeholders. Our clients will usually have a large software development or package configuration project pending. They are initially trying to figure out which vendor to hire. Vendor A will offer them a bid of 20 million dollars with a specified duration commitment and Vendor B will offer them a bid of 30 million dollars with a different duration commitment. How do we know which vendor to choose? Can Vendor A really finish with a lower cost and shorter schedule? Is the system going to work when it’s done?

The way it usually works is the client will make a decision based on their experience or gut feel. Or if they have already worked with a specific vendor in the past they will go with that vendor again based on some personal relationships that have evolved. Then the problems start. The work that was promised doesn’t get done within the promised time or the promised budget. The vendor then comes back and says they will add people to the project and everything will be ok. The client approves the revised project plan since they don’t have a way to confirm the accuracy of the revised proposal. Then even bigger problems start. More money is wasted, the schedule slips even more, and relationships sour.

Should Task Planning Occur Before Software Estimation?

I work for QSM, a leading software project estimation and demand management company. We focus on top-down estimation, meaning we figure out the total project duration and effort before any detailed planning occurs. We use SLIM-Estimate also known as the Putnam Model. Larry Putnam Sr. introduced SLIM in 1978. It is one of the leading software estimation tools in the world, validated with over 35 years of industry leading research and updated regularly with the latest technologies. 

Many people call us for help with team size software project estimation, they want to see how many people it’s going to take to deliver a specified amount of functionality within a certain duration and budget. At the time they call us they are often using task level planning tools to try to figure this out. 

The problem is that it’s tough to allocate people and the number of hours they will work when they haven’t figured out the specific requirements of each task and when they haven’t estimated the total duration and effort for the overall system. A manager could spend days creating a task level plan that doesn’t add up to the overall project duration and budget that is needed to deliver the functional requirements. When it doesn’t add up then re-planning has to take place costing more time and money. This is why QSM recommends estimating the big picture first, the scope level. 

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Estimation Process Improvement Sizing

Making Project Decisions Early is Risky Business

At QSM, we have one of the largest industry databases in the world of completed software projects. The data comes from our clients with their permission and this data has been the backbone of our software estimation business for over 35 years. We can see what is reasonable on software development projects as it relates to cost, team size, effort, duration, size, and reliability. Because of our experience we are often asked about risk factors and estimation accuracy early in the project lifecycle. We explain that increased accuracy comes with having historical data and good sizing information.

But what happens on the early estimates when clients don’t have history and detailed sizing information? Can they still generate scope level estimates so they can make good business decisions? The answer is yes. Risk management techniques can be applied and project uncertainty can be calculated so organizations can plan effectively. This is very important because big business decisions are often made early. Decision-makers need to know if they should move forward with a project and they need to know how much time and effort to allocate.

We use SLIM-Estimate, which is a leading estimation tool that leverages the Putnam Model. It generates reliable estimates based on QSM’s time-tested forecasting models and historical data and it also provides scope level estimates when project information is hard to find. It will allow you to see the chance you have of hitting your project goals and it will allow you to factor in your uncertainty.

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Risk Management Estimation

The Best of Both Worlds: Leveraging Top-Down Estimation with Capacity Planning

Demand Management and Capacity PlanningSince I work for a software metrics and estimation company, many people ask me questions regarding capacity planning and demand management. Most of the project managers that I speak with are using project portfolio management tools for very detailed, task-level resource capacity planning. They spend a lot of time planning the person hours for each task and then these task-level plans are prioritized and viewed across the organization. These are useful tools and methods and they usually require a sizable investment.

The problem is that many of these project managers don’t have a good way to support demand management. That is to say that they aren’t able to accurately estimate the key drivers that go into their PPM tools.  They need to be able to answer key questions like: Should we commit to 6 months or 9 for the project duration? Do we need 10 software developers or 20 to finish in 9 months? How much is the overall project going to cost? What alternatives do we have? Has anyone ever achieved that duration in the past? Should we even go forward with this project; what is the risk?

Oftentimes the project manager comes up with this information informally based on experience. Unfortunately, when they don’t use a scientific approach to estimating, they leave out key factors that affect the estimate and project success, like project complexity, team efficiency, and overall project uncertainty.

Bottom-Up? Not So Fast...

One of the most common objections we hear from companies with regard to getting started with top-down estimation is that it’s not needed, because they already have a detailed planning spreadsheet in place. Customers will concede that their estimation practices are not perfect, but that they are working “OK.” But, when it comes to spending your company’s money on software projects is “OK” enough?  

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Estimating for the Business Plan

Having worked in sales and customer service at QSM for over 17 years, I speak to hundreds of professionals each year that are directly or indirectly involved with software development projects using many different development processes. One of the things that I hear from time to time is that estimating is not as important when working with more iterative development methodologies. Some of the reasons I hear most often are that “team sizes are smaller,” “work can be deferred until the next iteration,” “we are different,” and “we are agile.”

As I dig deeper though, I find that the fundamental questions that software estimates answer are relevant, no matter what development methodology is being used. Before committing to a project, executives and managers need to determine reasonable cost, schedule, and how much they can deliver. This is when not very much is known and before any detailed planning occurs.  Estimating helps mitigate risk early in the project lifecycle. Companies also need to have reliable information in order to negotiate with clients. How can we negotiate a schedule and a budget on any project without a defensible estimate? 

When looking at QSM research based on our database of over 10,000 industry projects, a common theme that we see in failed projects is that development team performance is often not the issue. When it comes to missed schedules and budgets, many of the problems occur when expectations are too high and when estimates are not a priority. If we don’t have a reliable estimate up front before the project starts, it’s tough to plan ahead. 

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Process and Tools Together

At QSM we offer Estimation Process Consulting Services and the SLIM-Estimate tool. In my 16 years at QSM, I have probably spoken with hundreds of project managers about the pain that they have in the estimation area. Many tell me that they want to finish implementing their process before they bring in a tool.

One of the things that I have learned over the years is that it can be extremely beneficial to bring in the tool while the process is being developed. A successful estimation process implementation is about getting the right project data in the right place for consistent collaboration and results. Implement both the process and the tool at the same time and you can save a ton of money in rework costs down the road. 

A good estimation tool provides a roadmap and a communication vehicle for a successful estimation process. The tool collects the core metrics that the process requires. It also streamlines the results to give the user exactly what they need to know: risk, size, duration, effort, reliability, and productivity.

Some will spend years writing and implementing their process. Why not get the estimation tool in place sooner to make things easier?

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