iSixSigma

Six Sigma for project cost tracking

Six Sigma – iSixSigma Forums Old Forums General Six Sigma for project cost tracking

Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • #49275

    Six Sigma guy
    Member

    My company is trying to understand how Six Sigma tools could be used to improve the way IT project costs are tracked. We are considering developing a dashboard to understand cost overruns/underruns and help with future cost estimation.
    Has anyone done anything like this? Any suggestions?

    0
    #168243

    SixSigmaGuy
    Participant

    Hi Six Sigma Guy,
    There seems to be two of us going by the same moniker, although mine doesn’t always have spaces in the name.  I’ve been using SixSigmaGuy and Six Sigma Guy as a pseudonym for 8 years.  I don’t mind at all if both of us use the name, but I thought you should know there was two of us — or maybe more.:-) 
    BTW, my company has done what you describe, but it’s not really a Six Sigma thing.  For example, we have dashboards built in Excel and published on our intranet, but tracking the data is no way specific to Six Sigma.  If you are having problems with your current tracking methodology and want to use the Six Sigma methodology to improve your tracking methodology, you first need to identify the problem(s) and the impact of the problem(s).  If the impact is large and there’s not a simple solution, then a Six Sigma project might be warranted.
    SixSigmaGuy

    0
    #168247

    Six Sigma guy
    Member

    Thanks SixSigmaGuy,
    I got my inspiration for this moniker from a cartoon strip so I wouldn’t surprised if there were several others. I think I’ll change to 6S Guy to be a little different :-)
    Anyway; I am considering a DMAIC to reduce variation in project cost estimation but I just wanted to know if there had been similar and successful attempts elsewhere that we could learn from.
    6S Guy

    0
    #168281

    SixSigmaGuy
    Participant

    I know the comic strip well.  I think the comic strip got the inspiration for the character’s name from my moniker. We had some discussion over ownership of the “Six Sigma Guy” name sometime back and ended up agreeing that we could both use the name.  I also publish a monthly comic strip (internal to my company) named “Six Sigma Guy.”  It’s kind of like Dilbert, but dealing with Six Sigma.
    We, too, are embroiled in a Six Sigma project on project cost estimation.  I recommend that you first consider an algorithmic approach (e.g., weighted moving average of actual cost last 50 completed projects) as a starting point and then use empirical information to fudge the estimate.  We found that a simple moving average was more accurate than our more sophisticated approaches; although it still wasn’t very accurate. I highly recommend that you read Steve McConnell’s book on Software Estimation (published by Microsoft Press). Whether or not your projects are software related, the discussion on estimation still applies.  Steve has done quite a bit of research and shares it all, in detail, in his book   He also offers seminars on estimation.  I attended one last month and it was great; very helpful for our estimation project.
    Maybe we could share findings from our two projects.

    0
    #168285

    Deanb
    Participant

    Since hearing that over 80% of IT projects go over schedule and budget, this sounds like a worthy SS target, however a lot of folks smarter than I have still run into over-runs big-time. You may have a 800LB gorilla here.I believe the Software Engineering Institute at CMU may have some info on this phenom:
    http://www.sei.cmu.edu/Also, ASQ’s Software Quality Engineer BOK has material on this as well. Much attention is given to development models and project mgt methods that can reduce over-runs IF they are incorporated into the planning upfront.Many companies complain that IT projects consume way too mmany resources, which ironically often cuts into resources for CI projects. IT projects often do not work well with rigid project mgt approaches we typically use, such as defining all the requirements up front and just meeting them on time and on budget. IT projects can seem like a different universe, so get ready to think differently about those.There needs to be accommodation for “spiraling” into “discovered” requirements. I have learned the hard way that if you plan for some spiraling, those costs can easily be less than if you do rigid project mgt all the way. I suggest you read up on Spiral Models. This link should get you started:
    http://en.wikipedia.org/wiki/Spiral_modelThe first error is buying into the rosy picture the IT vendor gives you. Whatever the original estimated cost, double it and you might be close. Then start spiraling effectively. In the end, if the system works as intended, management usually forgives the cost hit. Effectiveness must trump cost. If you cut cost at the expense of functionality, start looking for a new job. No matter what mgt says initially, they will not forgive that outcome.Good luck.

    0
    #168300

    6S Guy
    Participant

    Thanks SixSigma Guy,
    Shall review the material recommended by yourself and Deanb. If we go ahead with the project, as opposed to just putting a few KPIs in place, then I shall glad to share findings with you. Thanks,
    6S Guy.

    0
Viewing 6 posts - 1 through 6 (of 6 total)

The forum ‘General’ is closed to new topics and replies.