[comp.software-eng] design to cost

gbeary@uswat.uswest.com (Greg Beary) (02/05/91)

In the January '91 issue of IEEE's Software magazine, Barry Boehm
has an interesting article on Risk Management. He makes very brief
mention of a technique called "design to cost". If anyone is familiar
with additional information on this technique/process/lifecycle I'd
appreciate it. 

We're having some difficulties in that we are trying to apply "normal
software business" lifecycles to in-house development. What happens is
that a internal client has the concept for a product. They "pitch" the
idea to a funding board. The funding board allocates $x to use to build
the product. We now begin to gather detailed requirements, estimate the
effort- $y, and architect the product. In no case has $x >= $y. What 
your are left with is a client that never has the dollars for the
functinality they want and a development organization that always "comes
up short" in the eyes of the client. 

I believe this is due to applying a build-to-suit lifecycle to what
essentially is a build-to-cost situation. It's rather like hiring a taxi
driver in California, telling them you want to go to New York, and oh
by the way... I only have $100 to give you for gas. The driver can
either refuse your offer, drive you as far as $100 goes, or hope that
when they have you in god-knows-where Nebraska - you'll "find" some more
money to get yourself out of there. 

Does anyone have a description of a Lifecycle or process that addresses
this type of situation? The Spiral model is lots closer to this approach
than the normal waterfall, but not really a total fit. 

Thanks,
Greg Beary

--
Greg Beary 				|  (303)889-7935
US West Advanced Technology  		|  gbeary@uswest.com	
6200 S. Quebec St.         		| 
Englewood, CO  80111			|

pcooper@eecs.wsu.edu (Phil Cooper - CS495) (02/06/91)

In article <15038@uswat.UUCP> gbeary@uswat.uswest.com (Greg Beary) writes:
>
>We're having some difficulties in that we are trying to apply "normal
>software business" lifecycles to in-house development. What happens is
>that a internal client has the concept for a product. They "pitch" the
>idea to a funding board. The funding board allocates $x to use to build
>the product. We now begin to gather detailed requirements, estimate the
>effort- $y, and architect the product. In no case has $x >= $y. What 
>your are left with is a client that never has the dollars for the
>functinality they want and a development organization that always "comes
>up short" in the eyes of the client. 
>

    Forgive my ignorance, but how in the world can your funding board
allocate a sum of money for a particular software development effort
before any requirements are known or estimation done? I don't see how
they could possibly hope to be accurate in their forecast of the cost
of the project.  It seems to me that if the in-house client wants a
particular software application developed badly enough, they can foot the
bill for at least a preliminary estimation of the scope and cost before
requesting funding from the board.  Just $.02 worth from a future
(hopefully) software engineer. 

Phil Cooper

heron@mars.jpl.nasa.gov (Vance Heron) (02/12/91)

In article <1991Feb06.102233.19301@eecs.wsu.edu> pcooper@yoda.UUCP (Phil Cooper - CS495) writes:

>    Forgive my ignorance, but how in the world can your funding board
>allocate a sum of money for a particular software development effort
>before any requirements are known or estimation done? 

By figuring what the finished product will be worth to the organization -
if it will cost $1M to develop software that will make/save the company
$100/year, the $1M wont be allocated (most of the time)

Vance

alan@tivoli.UUCP (Alan R. Weiss) (02/14/91)

In article <1991Feb06.102233.19301@eecs.wsu.edu> pcooper@yoda.UUCP (Phil Cooper - CS495) writes:
>In article <15038@uswat.UUCP> gbeary@uswat.uswest.com (Greg Beary) writes:
>>
>>We're having some difficulties in that we are trying to apply "normal
>>software business" lifecycles to in-house development. What happens is
>>that a internal client has the concept for a product. They "pitch" the
>>idea to a funding board. The funding board allocates $x to use to build
>>the product. We now begin to gather detailed requirements, estimate the
>>effort- $y, and architect the product. In no case has $x >= $y. What 
>>your are left with is a client that never has the dollars for the
>>functinality they want and a development organization that always "comes
>>up short" in the eyes of the client. 
>>
>
>    Forgive my ignorance, but how in the world can your funding board
>allocate a sum of money for a particular software development effort
>before any requirements are known or estimation done? I don't see how
>they could possibly hope to be accurate in their forecast of the cost
>of the project.  It seems to me that if the in-house client wants a
>particular software application developed badly enough, they can foot the
>bill for at least a preliminary estimation of the scope and cost before
>requesting funding from the board.  Just $.02 worth from a future
>(hopefully) software engineer. 
>
>Phil Cooper

Right.  In large corporations such as Unisys and IBM with formal
process models (Phase Review and Plan of Record, respectively),
little experiements are often funded during Phase 0 and Phase 1
without a lot of paperwork.  At some predefined point, a "stake in
the ground" is planted and the experimenter has to bring their project
under the process.  In doing so, they have to justify the project and
request additional funds.  This can occur at the exit of Phase 1
(Requirements) or Phase 2 (Specifications).  Phase 3 is Development,
Phase 4 is QA and Manufacturing, Phase 5 is Support, Phase 6 is Death
(this is from Unisys' process, which was lifted, er, gleaned from
IBM's process).

I am supportative of internal customer-supplier types of business
models, or even internal market structures such as capital funding
and transfer pricing schemes.  However, I have yet to have heard of
any software development organization who has employed internal markets
successfully.  Anyone else in net.land?


_______________________________________________________________________
Alan R. Weiss                           TIVOLI Systems, Inc.
E-mail: alan@tivoli.com                 6034 West Courtyard Drive,
E-mail: alan@whitney.tivoli.com         Suite 210
Voice : (512) 794-9070                  Austin, Texas USA  78730
Fax   : (512) 794-0623
_______________________________________________________________________



"Quality is never an accident.  It is always the result of high intention,
sincere effort, intelligent direction, and skillful execution.  It represents
the wise choice of many alternatives."
 

johnb@srchtec.uucp (John Baldwin) (02/14/91)

In article <1991Feb11.203134.24438@jato.jpl.nasa.gov>
   heron@mars.UUCP (Vance Heron) writes:

+ >    Forgive my ignorance, but how in the world can your funding board
+ >allocate a sum of money for a particular software development effort
+ >before any requirements are known or estimation done? 

+ By figuring what the finished product will be worth to the organization -
+ if it will cost $1M to develop software that will make/save the company
+ $100/year, the $1M wont be allocated (most of the time)


It sounds like his organization needs a tighter "feedback loop" in
the implementation stage, or maybe even earlier.  As Mr. Heron mentioned,
it's unwise to invest money you can never recoup --- so it really doesn't
make sense to me why they even let a group go ahead and start developing
something without knowing whether or not they can achieve their objective
within the specified cost constraints.

-- 
John Baldwin              | johnb@searchtech.com
Search Technology, Inc.   | srchtec!johnb@gatech.edu
Atlanta, Georgia          | johnb%srchtec.uucp@mathcs.emory.edu

mcgregor@hemlock.Atherton.COM (Scott McGregor) (02/20/91)

In article <1991Feb14.142129.26230@srchtec.uucp>, johnb@srchtec.uucp
(John Baldwin) writes:

> It sounds like his organization needs a tighter "feedback loop" in
> the implementation stage, or maybe even earlier.  As Mr. Heron mentioned,
> it's unwise to invest money you can never recoup --- so it really doesn't
> make sense to me why they even let a group go ahead and start developing
> something without knowing whether or not they can achieve their objective
                    ^^^^^^^
Fore-knowledge of the future is a rare talent.  For many individuals and
companies, an educated belief about the future is the best that can be
hoped for.  Often the proposed developers claim that they can do it when
they start, and because they are presumed to be knowledgable about what
they do, their estimates are trusted.  Often, to have enough knowledge
of the discipline to give a counter argument, you are probably beneficial
to the company in the development organization itself--in which case the
estimate will be based on your input in the first place.

The knowledge of success or failure in meeting the cost constraints doesn't
really occur until development is done.

> within the specified cost constraints.

--Scott McGregor
Atherton Technology
mcgregor@atherton.com