Software Project Management and Finance

(22CSE151)

Module 3

Chapter 2 – Project Planning

 Project Management

Module-3: Project management, Project Planning, Quality management

Project management: Risk management, Managing People, Teamwork.

Project Planning: Software pricing, Plan-driven development, Project scheduling: Estimation

techniques,

Quality management: Software quality, Reviews and inspections, Software measurement and
metrics, Software standards

Chapter 22 Project management 2

Topics covered

 Software pricing
 Plan-driven development
 Project scheduling
 Agile planning
 Estimation techniques
 Project planning

Project planning is a crucial part of project management focused on creating a detailed plan
that outlines the steps and resources necessary to achieve the project's objectives, including
identifying the
-project's scope,
-establishing a timeline,
-assigning tasks and resources, and
-budgeting for the project.
Project planning

 Project planning involves breaking down the work into

parts and assign these to project team members,
anticipate problems that might arise and prepare
tentative solutions to those problems.
 The project plan, which is created at the start of a
project, is used to communicate how the work will be
done to the project team and customers, and to help
assess progress on the project.
 Planning stages
Project planning takes place at three stages in a project life cycle:

 At the proposal stage, when you are bidding for a contract to

develop or provide a software system.
 During the project startup phase, when you have to plan
-who will work on the project,
-how the project will be broken down into increments,
-how resources will be allocated across your company, etc.
 Periodically throughout the project, when you modify your plan
in the light of experience gained and information from
monitoring the progress of the work.
7 steps of project planning

 Step 1: Define your goals and objectives.

 Step 2: Set success metrics.
 Step 3: Clarify stakeholders and roles.
 Step 4: Set your budget.
 Step 5: Align on milestones, deliverables, and project
dependencies.
 Step 6: Outline your timeline and schedule.
 Step 7: Share your communication plan.
Excel Project Plan template
Proposal planning

 Call for proposals based on a high-level description of

the software functionality that is required.
 Planning may be necessary with only outline software
requirements.
 The aim of planning at this stage is to provide
information that will be used in setting a price for the
system to customers.
 The development cost and the price charged to the
customer are different.
Software pricing

 When you are bidding for a contract, you have to work out
the price that you will propose to the customer for
developing the software.
 As a starting point for calculating this price, you need to
draw up an estimate of your costs for completing the
project work.
 Estimation involves working out how much effort is
required to complete each activity and, from this,
calculating the total cost of activities.
 Estimates are made to discover the cost, to the developer,
of producing a software system.
 You take into account, hardware, software, travel, training and
effort costs.
 Software pricing

 There are three main parameters that you should use when
computing the costs of a software development project:
• effort costs (the costs of paying software engineers and
managers);
• hardware and software costs, including maintenance;
• travel and training costs.
 Factors affecting software pricing

When calculating a price, you should take broader organizational, economic, political,
and business considerations into account, such as those shown below.

Factor Description
Market opportunity A development organization may quote a low price because it
wishes to move into a new segment of the software market.
Accepting a low profit on one project may give the organization
the opportunity to make a greater profit later. The experience
gained may also help it develop new products.

Cost estimate uncertainty If an organization is unsure of its cost estimate, it may increase
its price by a contingency over and above its normal profit.

Contractual terms A customer may be willing to allow the developer to retain

ownership of the source code and reuse it in other projects. The
price charged may then be less than if the software source code
is handed over to the customer.
 Factors affecting software pricing

Factor Description

Requirements volatility If the requirements are likely to change, an organization may

lower its price to win a contract. After the contract is awarded,
high prices can be charged for changes to the requirements.

Financial health Developers in financial difficulty may lower their price to gain a
contract. It is better to make a smaller than normal profit or break
even than to go out of business. Cash flow is more important than
profit in difficult economic times.
Plan-driven development

 Plan-driven or plan-based development is an approach

to software engineering where the development process
is planned in detail.
 Plan-driven development is based on engineering project
management techniques and is the ‘traditional’ way of managing
large software development projects.
 A project plan is created that records the work to be
done, who will do it, the development schedule and the
work products.
 Managers use the plan to support project decision
making and as a way of measuring progress.
Plan-driven development – pros and cons

 The arguments in favor of a plan-driven approach are

that early planning allows organizational issues
(availability of staff, other projects, etc.) to be closely
taken into account, and that potential problems and
dependencies are discovered before the project starts,
rather than once the project is underway.
 The principal argument against plan-driven development
is that many early decisions have to be revised because
of changes to the environment in which the software is to
be developed and used.
Project plans

 In a plan-driven development project, a project plan sets

out the resources available to the project, the work
breakdown and a schedule for carrying out the work.
 Plan sections
 Introduction
 Project organization
 Risk analysis
 Hardware and software resource requirements
 Work breakdown
 Project schedule
 Monitoring and reporting mechanisms
 Detail

 1. Introduction This briefly describes the objectives of the project and sets out the constraints
(e.g., budget, time, etc.) that affect the management of the project

 2. Project organization This describes the way in which the development team is organized, the
people involved, and their roles in the team.

 3. Risk analysis This describes possible project risks, the likelihood of these risks arising, and the
risk reduction strategies that are proposed
 4. Hardware and software resource requirements This specifies the hardware and support
software required to carry out the development. If hardware has to be bought, estimates of the
prices and the delivery schedule may be included.

 5. Work breakdown This sets out the breakdown of the project into activities and identifies the
milestones and deliverables associated with each activity. Milestones are key stages in the project
where progress can be assessed; deliverables are work products that are delivered to the
customer.

 6. Project schedule This shows the dependencies between activities, the estimated time required
to reach each milestone, and the allocation of people to activities. The ways in which the schedule
may be presented are discussed in the next section of the chapter.
 7. Monitoring and reporting mechanisms This defines the management reports that should be
produced, when these should be produced, and the project monitoring mechanisms to be used.
Project plan supplements

Examples of possible supplementary plans are shown

Plan Description
Quality plan Describes the quality procedures and standards that
will be used in a project.
Validation plan Describes the approach, resources, and schedule used
for system validation.
Configuration management plan Describes the configuration management procedures
and structures to be used.
Maintenance plan Predicts the maintenance requirements, costs, and
effort.
Staff development plan Describes how the skills and experience of the project
team members will be developed.
The planning process

 Project planning is an iterative process that starts when

you create an initial project plan during the project
startup phase.
 Plan changes are inevitable.
 As more information about the system and the project team
becomes available during the project, you should regularly revise
the plan to reflect requirements, schedule and risk changes.
 Changing business goals also leads to changes in project plans.
As business goals change, this could affect all projects, which
may then have to be re-planned.
The project planning process

Figure is a UML activity diagram that shows a typical workflow for a project planning process.
 Contd.

 Changing business goals also leads to changes in project plans. As business goals change, this
could affect all projects, which may then have to be replanned.

 Constraints are the required delivery date, staff available, overall budget, available tools, and so on.

 Milestones are points in the schedule against which you can assess progress, for example, the
handover of the system for testing.

 Deliverables are work products that are delivered to the customer (e.g., a requirements document
for the system).

 The process then enters a loop. You draw up an estimated schedule for the project and the
activities defined in the schedule are initiated or given permission to continue. After some time
(usually about two to three weeks), you should review progress.

 If there are serious problems with the development work that are likely to lead to significant delays,
you need to initiate risk mitigation actions to reduce the risks of project failure.

 Replan the project - A new schedule of work should be completed has to be established and agreed
with the customer.

 If this renegotiation is unsuccessful or the risk mitigation actions are ineffective, then you should
arrange for a formal project technical review.

 The outcome of a review may be a decision to cancel a project.

Issues in Project Management
About Project Scheduling
Project Scheduling Process
Project Scheduling Techniques
Project Scheduling Techniques
Project Scheduling Techniques
Project Scheduling Techniques
Project Scheduling Techniques
 Project scheduling

• Project scheduling is the process of

deciding how the work in a project will be
organized as separate tasks, and when
and how these tasks will be executed.
• You estimate the calendar time needed to
complete each task, the effort required
and who will work on the tasks that have
been identified.
• You also have to estimate the resources
needed to complete each task, such as
the disk space required on a server, the
time required on specialized hardware,
such as a simulator, and what the travel
budget will be.
Project scheduling activities

 Split the project into tasks and estimate the time and
resources required to complete each task.
 Organize tasks concurrently to make optimal
use of workforce.
 Minimize task dependencies to avoid delays
caused by one task waiting for another to complete.
 Dependent on project managers intuition and
experience.
Milestones and deliverables

 Milestones are points in the schedule against which you

can assess progress, for example, the handover of the
system for testing.
 Deliverables are work products that are delivered to the
customer, e.g. a requirements document for the system.
 The project scheduling process

Scheduling in plan-driven projects (Figure 23.4) involves breaking down the total work
involved in a project into separate tasks and estimating the time required to complete each
task. Tasks should normally last at least a week, and no longer than 2 months.

People working on a project may fall ill or leave, hardware may fail, and essential support
software or hardware may be delivered late. If the project is new and technically advanced,
parts of it may turn out to be more difficult and take longer than originally anticipated.
Scheduling problems

 Estimating the difficulty of problems and hence the cost

of developing a solution is hard.
 Productivity is not proportional to the number of people
working on a task.
 Adding people to a late project makes it later because of
communication overheads.
 The unexpected always happens. Always allow
contingency in planning.
 Schedule representation

Project schedules may simply be represented in a table or spreadsheet showing the

tasks, effort, expected duration, and task dependencies

 Graphical notations are normally used to illustrate the project

schedule.
 These show the project breakdown into tasks. Tasks should not be
too small. They should take about a week or two.
 Bar charts are the most commonly used representation for project
schedules. They show the schedule as activities or resources
against time.
 Bar charts are sometimes called ‘Gantt charts’, after their inventor,
Henry Gantt.
 Activity networks, which are network diagrams, show the
dependencies between the different activities making up a project.
 Project Activities

A project planning tool is used to manage project schedule information.

Project activities are the basic planning element. Each activity has:

 1. A duration in calendar days or months.

 2. An effort estimate, which reflects the number of person-
days or person-months to complete the work.
 3. A deadline by which the activity should be completed.
 4. A defined endpoint. This represents the tangible result of
completing the activity. This could be a document, the
holding of a review meeting, the successful execution of all
tests, etc.
 Tasks, durations, and dependencies

Person days is a term used in project management to measure the amount of work done by
a single person in one day.
Task Effort (person- Duration (days) Dependencies
days)
T1 15 10
T2 8 15
T3 20 15 T1 (M1)
T4 5 10
T5 5 10 T2, T4 (M3)
T6 10 5 T1, T2 (M4)
T7 25 20 T1 (M1)
T8 75 25 T4 (M2)
T9 10 15 T3, T6 (M5)
T10 20 15 T7, T8 (M6)
T11 10 10 T9 (M7)
T12 20 10 T10, T11 (M8)
Person Month
Person Month
Activity bar chart
Staff allocation chart
Agile planning

 Agile methods of software development are iterative

approaches where the software is developed and
delivered to customers in increments.
 Unlike plan-driven approaches, the functionality of these
increments is not planned in advance but is decided
during the development.
 The decision on what to include in an increment depends on
progress and on the customer’s priorities.
 The customer’s priorities and requirements change so it
makes sense to have a flexible plan that can
accommodate these changes.
Agile planning stages

 Release planning, which looks ahead for several months

and decides on the features that should be included in a
release of a system.
 Iteration planning, which has a shorter term outlook, and
focuses on planning the next increment of a system. This
is typically 2-4 weeks of work for the team.
Planning in XP
Story-based planning

 The system specification in XP is based on user stories that reflect

the features that should be included in the system.
 The project team read and discuss the stories and rank them in
order of the amount of time they think it will take to implement the
story.
 Release planning involves selecting and refining the stories that will
reflect the features to be implemented in a release of a system and
the order in which the stories should be implemented.
 Stories to be implemented in each iteration are chosen, with the
number of stories reflecting the time to deliver an iteration (usually 2
or 3 weeks).
Key points

 The price charged for a system does not just depend on its
estimated development costs; it may be adjusted depending on the
market and organizational priorities.
 Plan-driven development is organized around a complete project
plan that defines the project activities, the planned effort, the activity
schedule and who is responsible for each activity.
 Project scheduling involves the creation of graphical representations
the project plan. Bar chartsshow the activity duration and staffing
timelines, are the most commonly used schedule representations.
 The XP planning game involves the whole team in project planning.
The plan is developed incrementally and, if problems arise, is
adjusted. Software functionality is reduced instead of delaying
delivery of an increment.
Chapter 23 – Project planning

Lecture 2
Software Project Estimation
Factors affect on Project Estimation
Steps of Software Project Estimation
About COCOMO Model
Software Project Types
Software Project Types
Types of COCOMO Model

 Basic COCOMO Model

 Intermediate COCOMO Model
 Detailed COCOMO Model
Type 1: Basic COCOMO Model
Type 1: Basic COCOMO Model Example
Type 2: Intermediate COCOMO Model

EAF: Effort Adjustment Factor (is a value which is constant and built in value).
Type 2: Intermediate COCOMO Model
Type 2: Intermediate COCOMO Model Example
Type 3: Detailed / Complete COCOMO Model
Type 3: Detailed COCOMO Model Example
Advantages of COCOMO Model
Disadvantages of COCOMO Model
Estimation techniques

 Organizations need to make software effort and cost

estimates. There are two types of technique that can be
used to do this:
 Experience-based techniques The estimate of future effort
requirements is based on the manager’s experience of past
projects and the application domain. Essentially, the manager
makes an informed judgment of what the effort requirements are
likely to be.
 Algorithmic cost modeling In this approach, a formulaic approach
is used to compute the project effort based on estimates of
product attributes, such as size, and process characteristics,
such as experience of staff involved.
Experience-based approaches

 Experience-based techniques rely on judgments based

on experience of past projects and the effort expended in
these projects on software development activities.
 Typically, you identify the deliverables to be produced in
a project and the different software components or
systems that are to be developed.
 You document these in a spreadsheet, estimate them
individually and compute the total effort required.
 It usually helps to get a group of people involved in the
effort estimation and to ask each member of the group to
explain their estimate.
Algorithmic cost modelling

 Cost is estimated as a mathematical function of

product, project and process attributes whose
values are estimated by project managers:
 Effort = A ´ SizeB ´ M
 A is an organisation-dependent constant, B reflects the
disproportionate effort for large projects and M is a multiplier
reflecting product, process and people attributes.
 The most commonly used product attribute for cost
estimation is code size.
 Most models are similar but they use different values for
A, B and M.
Estimation accuracy

 The size of a software system can only be known

accurately when it is finished.
 Several factors influence the final size
 Use of COTS and components;
 Programming language;
 Distribution of system.
 As the development process progresses then the size
estimate becomes more accurate.
 The estimates of the factors contributing to B and M are
subjective and vary according to the judgment of the
estimator.
Estimate uncertainty
The COCOMO 2 model

 An empirical model based on project experience.

 Well-documented, ‘independent’ model which is not tied
to a specific software vendor.
 Long history from initial version published in 1981
(COCOMO-81) through various instantiations to
COCOMO 2.
 COCOMO 2 takes into account different approaches to
software development, reuse, etc.
COCOMO 2 models

 COCOMO 2 incorporates a range of sub-models that

produce increasingly detailed software estimates.
 The sub-models in COCOMO 2 are:
 Application composition model. Used when software is
composed from existing parts.
 Early design model. Used when requirements are available but
design has not yet started.
 Reuse model. Used to compute the effort of integrating reusable
components.
 Post-architecture model. Used once the system architecture has
been designed and more information about the system is
available.
COCOMO estimation models
Functional Points

 Function points measure the size of an application

system based on the functional view of the system.
 The size is determined by
-counting the number of inputs,
-outputs,
-queries,
-internal files and external files in the system and
-adjusting that total for the functional complexity of the
system.
Object points are a way of estimating effort size, similar to
Source Lines Of Code (SLOC) or Function Points.
Application composition model

 Supports prototyping projects and projects where there

is extensive reuse.
 Based on standard estimates of developer productivity in
application (object) points/month.
 Takes CASE tool use into account.
 Formula is
 PM = ( NAP ´ (1 - %reuse/100 ) ) / PROD
 PM is the effort in person-months,
 NAP is the number of application points and
 PROD is the productivity.
Application-point productivity

Developer’s Very low Low Nominal High Very high

experience
and capability
ICASE maturity Very low Low Nominal High Very high
and capability
PROD 4 7 13 25 50
(NAP/month)
Early design model

 Estimates can be made after the requirements have

been agreed.
 Based on a standard formula for algorithmic models
 PM = A ´ SizeB ´ M where
 M = PERS ´ RCPX ´ RUSE ´ PDIF ´ PREX ´ FCIL ´ SCED;
 A = 2.94 in initial calibration, Size in KLOC, B varies from 1.1 to
1.24 depending on novelty of the project, development flexibility,
risk management approaches and the process maturity.
Multipliers

 Multipliers reflect the capability of the developers, the

non-functional requirements, the familiarity with the
development platform, etc.
 RCPX - product reliability and complexity;
 RUSE - the reuse required;
 PDIF - platform difficulty;
 PREX - personnel experience;
 PERS - personnel capability;
 SCED - required schedule;
 FCIL - the team support facilities.
The reuse model

 Takes into account black-box code that is reused without

change and code that has to be adapted to integrate it
with new code.
 There are two versions:
 Black-box reuse where code is not modified. An effort estimate
(PM) is computed.
 White-box reuse where code is modified. A size estimate
equivalent to the number of lines of new source code is
computed. This then adjusts the size estimate for new code.
Reuse model estimates 1

 For generated code:

 PM = (ASLOC * AT/100)/ATPROD
 ASLOC is the number of lines of generated code
 AT is the percentage of code automatically generated.
 ATPROD is the productivity of engineers in integrating this code.
Reuse model estimates 2

 When code has to be understood and integrated:

 ESLOC = ASLOC * (1-AT/100) * AAM.
 ASLOC and AT as before.
 AAM is the adaptation adjustment multiplier computed from the
costs of changing the reused code, the costs of understanding
how to integrate the code and the costs of reuse decision
making.

ESLOC- Estimate of Equivalent number of lines of code for new source code.
Post-architecture level

 Uses the same formula as the early design model

 The code size is estimated as:
 Number of lines of new code to be developed;
 Estimate of equivalent number of lines of new code computed
using the reuse model;
 An estimate of the number of lines of code that have to be
modified according to requirements changes.
The exponent term

 This depends on 5 scale factors (see next slide). Their

sum/100 is added to 1.01
 A company takes on a project in a new domain. The
client has not defined the process to be used and has
not allowed time for risk analysis. The company has a
CMM level 2 rating.
 Precedenteness - new project (4)
 Development flexibility - no client involvement - Very high (1)
 Architecture/risk resolution - No risk analysis - V. Low .(5)
 Team cohesion - new team - nominal (3)
 Process maturity - some control - nominal (3)
 Scale factor is therefore 1.17.
Scale factors used in the exponent computation
in the post-architecture model

Scale factor Explanation

Precedentedness Reflects the previous experience of the organization with this type of
project. Very low means no previous experience; extra-high means that
the organization is completely familiar with this application domain.
Development flexibility Reflects the degree of flexibility in the development process. Very low
means a prescribed process is used; extra-high means that the client
sets only general goals.
Architecture/risk resolution Reflects the extent of risk analysis carried out. Very low means little
analysis; extra-high means a complete and thorough risk analysis.
Team cohesion Reflects how well the development team knows each other and work
together. Very low means very difficult interactions; extra-high means
an integrated and effective team with no communication problems.
Process maturity Reflects the process maturity of the organization. The computation of
this value depends on the CMM Maturity Questionnaire, but an
estimate can be achieved by subtracting the CMM process maturity
level from 5.
Multipliers

 Product attributes
 Concerned with required characteristics of the software product
being developed.
 Computer attributes
 Constraints imposed on the software by the hardware platform.
 Personnel attributes
 Multipliers that take the experience and capabilities of the people
working on the project into account.
 Project attributes
 Concerned with the particular characteristics of the software
development project.
The effect of cost drivers on effort estimates

Exponent value 1.17

System size (including factors 128,000 DSI
for reuse and requirements
volatility)
Initial COCOMO estimate 730 person-months
without cost drivers
Reliability Very high, multiplier = 1.39

Complexity Very high, multiplier = 1.3

Memory constraint High, multiplier = 1.21

Tool use Low, multiplier = 1.12

Schedule Accelerated, multiplier = 1.29

Adjusted COCOMO estimate 2,306 person-months

The effect of cost drivers on effort estimates

Exponent value 1.17

Reliability Very low, multiplier = 0.75

Complexity Very low, multiplier = 0.75

Memory constraint None, multiplier = 1

Tool use Very high, multiplier = 0.72

Schedule Normal, multiplier = 1

Adjusted COCOMO 295 person-months

estimate
Project duration and staffing

 As well as effort estimation, managers must estimate the

calendar time required to complete a project and when
staff will be required.
 Calendar time can be estimated using a COCOMO 2
formula
 TDEV = 3 ´ (PM)(0.33+0.2*(B-1.01))
 PM is the effort computation and B is the exponent computed as
discussed above (B is 1 for the early prototyping model). This
computation predicts the nominal schedule for the project.
 The time required is independent of the number of
people working on the project.
Tdev is the estimated time to develop the software, expressed in months.
Staffing requirements

 Staff required can’t be computed by diving the

development time by the required schedule.
 The number of people working on a project varies
depending on the phase of the project.
 The more people who work on the project, the more total
effort is usually required.
 A very rapid build-up of people often correlates with
schedule slippage.
Key points

 Estimation techniques for software may be experience-

based, where managers judge the effort required, or
algorithmic, where the effort required is computed from
other estimated project parameters.
 The COCOMO II costing model is an algorithmic cost
model that uses project, product, hardware and
personnel attributes as well as product size and
complexity attributes to derive a cost estimate.