Estimating Cost

A process, product, project, and issue estimated cost determination is often like throwing a dart at a board, with the board moving randomly in all directions every milli-second. We have all heard of a project supposed to cost X, yet the final cost was multiples of the original estimate. What is needed is a method for estimating costs that organizations can depend on being accurate. The Optimize product approach allows users to determine the cost of individual requirements, a set of requirements (equivalent to a feature), or the entire process, product, project, or issue.

The Optimize product links terminal requirements to one or more terminal schedule tasks. Part of each scheduled task is one or more designated labor categories and estimated (or actual when completed) hours for the task per labor category. Multiplying hours for the labor category times the average hourly salary for the designated labor category provides a task cost. The Optimize product sums the results for each estimated labor category if there are multiple labor categories.

Cost contributes to the process, product, and project failures because their inaccurate estimates often cause organizations to make ill-advised decisions because of erroneous information. If we knew what a process, product, or project would cost to perform, maintain, or implement, we would often never implement the process, product, or project. In reverse, if we knew that we could implement it for significantly less than what was estimated, it would often make sense to move forward with the implementation.

Comprehensive Cost Estimates

Executives are continuously fighting budgets and need accurate cost estimates expeditiously. The Optimize product supports timely cost estimates by determining the cost of any feature or the cost of the entire process, product, or project. The Optimize product links terminal requirements, requirements without sub-requirements, to the terminal schedule tasks, which implement the requirements to determine the cost.