presenter covers merged - stickyminds · leveraging function points in an earned value management...

BIOPRESENTATION

Better Software Conference & EXPOSeptember 27-30, 2004

San Jose, CA USA

W5

September 29, 2004 1:45 PM

LEVERAGE EARNED VALUEMANAGEMENT WITH FUNCTION

POINT ANALYSIS

Ian BrownBooz Allen Hamilton

Ian BrownIan Brown is a senior associate with Booz Allen Hamilton, leads the firm’s softwaremeasurement and estimation practice. He has 7 years of experience in softwaremeasurement and analysis, software cost and schedule estimation, CMM/CMMI, andgoal-question-metric (GQM) implementation. Ian is currently Chair of the InternationalFunction Point Users Group’s (IFPUG) Annual Conference and has presented at severalnational software conferences. Ian is a Certified Function Point Specialist (CFPS) andearned his bachelors degree from Cornell University and his master degree in publicpolicy from Harvard University.

Leverage Earned Value Managementwith Function Point Analysis

Ian Brown, CFPSBooz Allen Hamilton8283 Greensboro Dr.McLean, VA 22102USA

Copyright © 2004 Booz Allen Hamilton

1Copyright © 2004 Booz Allen Hamilton

Contents

4Purpose

4Earned Value Management (EVM) Overview

4 Function Point Analysis (FPA) Overview

4Applying FPA to EVM


Challenged Projects by Schedule Overruns

30% 29%26%

14%

1%0%

10%

20%

30%

40%

<20% 21-50% 51-100% 101-200% >200%

Succeeded34%

Challenged51%

Failed15%

The purpose of this brief is to demonstrate how function pointanalysis can improve cost and schedule control on softwaredevelopment projects4Software development projects are notorious

for cost and schedule overruns

Leveraging function points in an earned value management (EVM)framework can significantly improve a project’s chances of success

Source: The Standish Group, CHAOSChronicles Version 3.0, 2002

Project Resolution by Type

Challenged Projects by Cost Overruns

46%

27%

18%

7%2%

0%

10%

20%

30%

40%

50%

<20% 21-50% 51-100% 101-200% >200%


Overview of Earned Value Management


EVM is the systematic integration and measurement of cost,schedule, and performance accomplishments on a project

4Provides strong benefits for programplanning and control

4Emphasizes disciplined integration oftechnical performance to associatedcost and schedule

4Provides a sound basis for problemidentification, corrective actions, andmanagement replanning as may berequired

4Objectively measures work progress

4Industry Standard ANSI/EIA-748-1998

Scope

Cost

Schedule

EVM

Scope

Cost

Schedule

EVM

Scope

Cost

Schedule

EVM


EVM is a subset of a broader project management system

ScopeDefinitionScope

Definition

NeedsStatement

NeedsStatement

PerformanceMeasurement

Planning

PerformanceMeasurement

Planning

ProjectCharterProjectCharter

Detailed CostEstimate

Quality

Schedule/Cost

Contract Mgmt Contract Mgmt

Config Mgmt

Initiation

Shaded boxes indicate EVM requirements

WBS

Execution & ControlPlanning

Schedule andMilestones

PerformanceMeasures

ProjectManagement

Plan

PerformanceMeasuresAnalysis

Risk Risk

Quality Quality

Communications Communications

Organization Organization

Schedule/Cost Control

People/Resources People/Resources

Change Control

Risk Control Risk Control

Quality Control Quality Control

Deliverables

Reporting


Project APlanned vs. Actuals

$

$50

$100

$150

$200

$250

$300

$350

Q1 Q2 Q3 Q4 Q5 Q6

Dol

lars

in 0

00s

Planned

Actual

Planned Cost: $150K

Actual Cost: $110K

Status Date

Traditional project management typically looks at two sources ofcost data: planned and actual expenditures

4 The comparison of budgeted versus actualexpenditures merely indicates plannedspending versus what was actually spent atany point in time

4 This approach can give an inaccuratepicture of current status

4 This two-dimensional comparison providesno assessment of the value of the workperformed to date

Does management need to take corrective action, or is the projectsimply coming in below budget?

Halfway to complete, Project A hasspent $40K less than planned

But how much work has actuallybeen completed?

Halfway to complete, Project A hasspent $40K less than planned

But how much work has actuallybeen completed?


Project AEarned Value

$

$50

$100

$150

$200

$250

$300

$350

Q1 Q2 Q3 Q4 Q5 Q6D

olla

rs in

000

s

PlannedActualEarnedPlanned Cost: $150K

Actual Cost: $110K

Status Date

Value of Work: $90K

Earned value management utilizes three data sources: planned andactual expenditures, plus earned value of completed work4EVM looks at two critical variances

– Difference between planned value of workto the earned value achieved (schedule)

– Difference between the earned valueachieved and the actual expendituresrequired to accomplish that work (cost)

4 This approach gives a true representation ofthe current project status

4History indicates that these types of costoverruns do not correct themselves over thecourse of the project

Cost and schedule performance indexes can be used to forecast a morerealistic final cost

Project A spent $110K for $90Kworth of work – a $20K overrun –and is also behind schedule

Project A spent $110K for $90Kworth of work – a $20K overrun –and is also behind schedule


In summary, EVM requires three critical pieces in order to succeed

4 Accurate estimates of budgetand schedule are key factorsin effective EVMimplementation

4 Unachievable cost andschedule plans set the projectup for failure from the start

4 Basis of estimate must bewell-defined and clearlyunderstood

Good baseline cost andschedule plans at the

project start

Good baseline cost andschedule plans at the

project start

� Provide a structuredchange control processthat effectively assesses

impact to cost andschedule

Provide a structuredchange control processthat effectively assesses

impact to cost andschedule

�Accurately and

quantitatively assesspercent complete

Accurately andquantitatively assess

percent complete

�

4 Changes to project scopemust be controlled in order forEVM to be effective

4 Change control process mustbe able to demonstrateimpacts to cost and scheduleof new/changed requirements

4 If changes are accepted, costand schedule baseline plansmust be updated

4 Earning value is dependentupon progress of the projectagainst the cost and scheduleplans

4 Work completed must be ableto be quantitatively measuredand expressed

Function points provide the ability to perform each of these on softwaredevelopment projects


Overview of Function Point Analysis


Size is one of the most important inputs into software cost andschedule estimates4Size can be the single most influential cost

driver of a software development effort

4Software size is measured in many differenttypes of units

– Lines of code

– Objects

– Testable requirements

– Use case points

– Function points• International Function Point Users Group

(IFPUG)• Mark II• Cosmic

OUTPUT RESULTSOUTPUT RESULTSINPUT PARAMETERSINPUT PARAMETERS

Estimation Model

PROJECTSIZE

PROJECTSIZE

PERSONNELPERSONNEL

DEVELOPMENTENVIRONMENT


PROJECTCOMPLEXITY

PROJECTCOMPLEXITY

CONSTRAINTSCONSTRAINTS

EFFORTEFFORTEFFORT

COSTCOSTCOST

SCHEDULESCHEDULESCHEDULE

RISKRISKRISK

MAINTENANCEMAINTENANCEMAINTENANCE

OUTPUT RESULTSOUTPUT RESULTSOUTPUT RESULTSOUTPUT RESULTSINPUT PARAMETERSINPUT PARAMETERSINPUT PARAMETERSINPUT PARAMETERS

Estimation Model

Estimation Model

PROJECTSIZE

PROJECTSIZE

PERSONNELPERSONNEL



PROJECTCOMPLEXITY

PROJECTCOMPLEXITY

CONSTRAINTSCONSTRAINTS

EFFORTEFFORTEFFORT

COSTCOSTCOST

SCHEDULESCHEDULESCHEDULE

RISKRISKRISK

MAINTENANCEMAINTENANCEMAINTENANCE

IFPUG function points are the only size measure with clearly definedstandards, as well as a governance structure that reviews and updatesrules and guidance


Function points measure software size based on the functionalityrequested by and provided to the end user

Function point countingresources

ü User/analyst interviewsü Requirements documentsü Design documentsü Data dictionariesü Use casesü User guidesü Screen capturesü Actual softwareü Entity-relationship modelsü Semantic object models

Function point countingresources

ü User/analyst interviewsü Requirements documentsü Design documentsü Data dictionariesü Use casesü User guidesü Screen capturesü Actual softwareü Entity-relationship modelsü Semantic object models

Application Being Assessed

Internal Logical Data

End user

InputsOutputs

Inquiries

Other Applications/Systems

Inputs

Outputs

Inquiries

External Interfaces

Application Being Assessed

Internal Logical Data

End user

InputsOutputs

Inquiries

Other Applications/Systems

InputsInputs

OutputsOutputs

Inquiries

External Interfaces

Function points represent logical size, as opposed to physical size (likeSLOC or objects)


More complex functions contribute a higher number of functionpoints to the logical size

4Data functions represent logical groupings of thedata that end users need to do their jobs

– Internal data maintained by the application

– External data referenced by the application

– Complexity is based on number of dataelements and logical sub-groupings

4 Transactional functions are the processes andactions that end users utilize to manipulate andmanage that data in the course of doing their jobs

– Inputs (add, edit, delete, etc.)

– Outputs (reports, etc.)

– Inquiries (search, retrieve, etc.)

– Complexity is based on number of dataelements and files referenced

Function Low Ave HighInternal Logical File 7 10 15

External Interface File 5 7 10External Input 3 4 6

External Output 4 5 7External Inquiry 3 4 6

Complexity

Function Point Complexity Matrix

Function Low Ave HighInternal Logical File 7 10 15

External Interface File 5 7 10External Input 3 4 6

External Output 4 5 7External Inquiry 3 4 6

Complexity

Function Point Complexity Matrix


Function point analysis (FPA) provides a consistent, documentable,repeatable measurement methodology

4Standards are established and managed by International FunctionPoint Users Group (IFPUG)

4 Function points accepted as a standard size measure by ISO(ISO 20926:2003)

4Certified Function Point Specialist (CPFS) professional certificationprogram recognizes trained experts

4Because it is linked directly to system requirements and functionality,FPA puts size analysis into terms that a client or end user canunderstand

– Function points can help with communications between the enduser community and the developer• A client would never say, “I need a system that is 20,000 lines of code”

• A client says, “Build me a system that does this and supports theseprocesses”


FPA offers many advantages over other software sizing techniques

Pros4 Standards established and reviewed frequently

(IFPUG)4 Available from early requirements stage and

applicable for full life-cycle analysis4 Technology, platform, language independent4 Provides advantages over lines of code (not

dependent on engineering estimates, bettermetrics)

4 Fully documentable and repeatable4 Assists with requirements management;

functional size traceable throughout entire lifecycle

4 Provides quantitative basis for earned valuemanagement

Cons4 Accurate counting requires in-depth knowledge of

standards

4 Largely manual process

4 Some variations exist that aren’t standardized(Mark II, 3D, full, feature points, object points, etc.)

Without Function Point Analysis

With Function Point Analysis

Source: Software Productivity Research

On-time Late Cancelled

75%

5%

20%

45%15%

40%

Without Function Point Analysis

With Function Point Analysis

Source: Software Productivity Research

On-time Late CancelledOn-time Late CancelledOn-timeOn-time LateLate CancelledCancelled

75%

5%

20%

45%15%

40%


Function point counting example, based on functionalrequirements

Average

Low

Low

Average

Complexity

51OutputThe system shall produce a monthlyemployee summary report

276Totals

31InquiryThe system shall permit the user tosearch for an employee

93InputThe system shall permit the user to add,change, and delete employee data

101Internal

logical fileThe system shall store employeeinformation

FunctionPoints

QuantityFunction

TypeRequirement


Applying FPA to EVM


Function point sizing can provide a solid basis of estimate for costand schedule plans

4Using a software estimation model, function points can then betranslated into cost and schedule estimates for the initial project plan

– Model should be tailored as much as possible to the specificdevelopment team and environment, and even calibrated withhistorical data if possible

Establish a good baseline cost and

schedule plan at the project start



� Establish a good baseline cost and




�

4 Initial FPA provides a functional baseline in termsof what will be developed

4 The process of FPA can also help identify anyrequirements gaps early in the development lifecycle

– Function points put the size assumptions intoterms the client can understand and can reviewfor completeness and accuracy

– Linking transactions with logical data can helpidentify where some requirements may havebeen overlooked or defined incorrectly


ID Task Name Duration Budget1 Design 24 days $3,375.00

2 Code 15 days $4,098.00

3 Test 18 days $6,027.00

W1 W2 W3 W4 W5 W6 W7 W8 W9 W10 W11 W12Month 1 Month 2 Month 3

ID Task Name Duration Budget1 Design 24 days $3,375.00

2 Code 15 days $4,098.00

3 Test 18 days $6,027.00

W1 W2 W3 W4 W5 W6 W7 W8 W9 W10 W11 W12Month 1 Month 2 Month 3

Size estimates can be directly linked to baseline requirements

4 The resulting project plan can reflect this linkage, which sets up asolid EVM framework





� Establish a good baseline cost and




�

Planned workallocated to eachrequirement

Planned schedulewith phase milestones


Cost and schedule re-estimation are essential aspects of aneffective, structured change control process

4Requirements for a software development project inevitably change orare redefined as design and development activities progress

– Before the changes are incorporated into the project scope, impactto cost and schedule must be evaluated

– The change control process should provide a go/no-go decision asto whether the requirements changes should be accepted ordelayed for future work

4Because they are linkeddirectly to requirements,function points provide aquantifiable, traceable, anddocumentable methodologyfor resizing the software andre-estimating cost andschedule

Provide a structured change control process that effectively assesses

impact to cost and schedule



� Provide a structured change control process that effectively assesses




�

New

Changed

This requirements churn would add 30function points to the project, increase costby $17K, and extend schedule by 18 days

This requirements churn would add 30function points to the project, increase costby $17K, and extend schedule by 18 days


EVM monitoring compares the actual performance against thetime-phased plan

4 Function points can help quantify progress against the plan

– When an activity is complete for a requirement, the project has“earned” the value of the function points associated with thatrequirement

4 The logical nature of function points easily apply to any life cyclephase (design, code, test), whereas physical size measures do not

Accurately and quantitatively assess

percent complete


percent complete

�Accurately and

quantitatively assess percent complete


percent complete

�

So how is thisproject doing?So how is thisproject doing?

Design is complete. Coding iscomplete for three of the

requirements, representing 89%of the total functional size

Design is complete. Coding iscomplete for three of the

requirements, representing 89%of the total functional size

Actual cost ofcompleted workActual cost of

completed work


EVM tells a very different story than traditional projectmanagement

4Comparing planned costs toactual costs, the project mightseem over budget

4However, EVM demonstratesthat the at this point the projecthas delivered what was plannedin 90 percent of the estimatedschedule and at 96 percent ofthe expected cost

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

Wk 1 Wk 2 Wk 3 Wk 4 Wk 5 Wk 6 Wk 7 Wk 8 Wk 9 Wk 10 Wk 11 Wk 12

PlannedActualEarned Value

Status Date

Planned: $6,381

Actual: $6,744

Earned Value: $7,018


In summary, final project results are significantly influenced bythree key factors

Earned value management, combined with function point analysis, can providea very powerful and effective way to manage software development projects

The quality of thebaseline project plan

The quality of thebaseline project plan

��

Actual projectperformance against

the baseline plan

Actual projectperformance against

the baseline plan

��

The ability tocontrol changes thatmight impact the final

outcome

The ability tocontrol changes thatmight impact the final

outcome

��

Function points help ensure that the cost and schedulebaseline has a solid, defendable basis of estimate

Function points help ensure that the cost and schedulebaseline has a solid, defendable basis of estimate

Function points provide an objective, quantifiablemeasure of percent complete for actual performance

Function points provide an objective, quantifiablemeasure of percent complete for actual performance

Function points provide the ability to revise the projectbaseline and to control requirements growth

Function points provide the ability to revise the projectbaseline and to control requirements growth

Source: Fleming and Koppelman, Earned Value Project Management, 1996.

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