Workshop on the new guide on Estimating Packaged Applications during the 2016 IWSM workshop in Berlin.

1. Eric van der Vliet / Frank Vogelezang

2. Agenda
1. Packaged software estimation
2. Cost estimation model
3. Cost Drivers
4. EPS Framework
5. Sizing methods
6. Summary
|IWSM2016 – Estimating Packaged Software

3. Trends
 Trend towards less custom made software
 Increasing use of packaged software
 Vendors and implementation partners use their own proprietary
techniques for estimation
 No generic framework for estimating the effort and cost of packaged
software
 Hard to compare estimates from different sources
 Hard to build up benchmark data for public reference
|IWSM2016 – Estimating Packaged Software

4. Differences packaged vs bespoke software
Aspect Packaged software Bespoke software
Functionality overdose exact fit
creation of functionality configuration (bulk) and tailor
made (missing parts)
completely bespoke
lifecycle cost usually cheaper mostly more expensive
size ability poor: a few aspect methods
(RICEF, CEMLI)
good: detailed and global
(FP’s, Cosmic, UCP, LOC)
estimate ability vague (supplier standards, no
common methods)
good: market shared
productivity rates
Benchmarking poor: due to size ability good: tooling; benchmark
data available
cost engineering more complex due to different
element types
mostly straightforward
popularity CxO fast growing only when necessary
|IWSM2016 – Estimating Packaged Software

5. Packaged software
 Standard functionality
 Functionality prepared for specific markets
 E.g. HRM, CRM, Logistics, Finance, …
 Strong interaction between business and IT
 Understand business process
 Understand IT
 Make the translation
Packaged software
Packaged software consists of readymade core modules with standard functionality that
requires configuration to offer ready to run functionality for the intended business.
Packaged software can be enhanced with custom built functionality and interfaces with
internal or external systems
|IWSM2016 – Estimating Packaged Software

6. Structure packaged software
1. Configuration
2. Custom built functionality
3. Core module(s) / standard
functionality
4. External interfaces
5. Internal interfaces
6. Data
|IWSM 2016 - Estimating Packaged Software

7. Solution breakdown packaged software
Packaged
Software
Implementation
Configuration
Finance config
Order config
Custom built
functionality
Internal
Clearing
Order Routing
Core modules
Finance
Order
External
interfaces
Payments
Mail
Fleet
Internal
interfaces
Finance 
Order
Data
Converted
Ledger
Converted
Catalog
Converted
Stock
|IWSM 2016 - Estimating Packaged Software

8. Solution breakdown packaged software
Packaged
Software
Implementation
Configuration
Finance config
Order config
Custom built
functionality
Internal
Clearing
Order Routing
Core modules
Finance
Order
External
interfaces
Payments
Mail
Fleet
Internal
interfaces
Finance 
Order
Data
Converted
Ledger
Converted
Catalog
Converted
Stock
$ $ $$ $ $
$ $ $$ $ $
$ $ $$
$
$
$
|IWSM 2016 - Estimating Packaged Software

9. Packaged software cost estimation model
Size Driver XSize dependent
Cost:
Size Effort= Delivery Rate1
Size Driver XSize Effort= Delivery Raten
. . .
Productivity
Drivers
Combined
Effort
X
Total Effort

Size
independent
Cost:
Cost
Size dependent
Cost
Size independent
Total Cost

|IWSM 2016 - Estimating Packaged Software

10. Packaged software elements are created in phases
Blue-print Realization Deployment
|IWSM 2016 - Estimating Packaged Software

11. Packaged software elements are created in phases
Blue-print Realization Deployment
Run
Event-driven
maintenance
Planned
maintenance
|IWSM 2016 - Estimating Packaged Software

12. Packaged software cost drivers
Blue-print Realization Deployment
Run
Event-driven
maintenance
Planned
maintenance
|IWSM 2016 - Estimating Packaged Software

13. Size dependent cost drivers - 1
Size Drivers
Blue-print
• Processes
• Workshops
• Key users
• (external) interfaces
Realization
• Standard functionality
• Configuration
• Custom build functionality
• Interfaces (ext, int)
• Data
Deployment
• # Users (per category)
• # Trainings
• # Modules
• Data conversion
Run
• #Named users
• #Key users
• #(Sub) modules
implemented
Event-driven
maintenance
• # named users
• # key users
• # (sub) modules
implemented
Planned
maintenance
• Size tailor made software /
customizations
• Size configuration
|IWSM 2016 - Estimating Packaged Software

14. Size dependent cost drivers - 2
Productivity Drivers
Blue-print
• # of organizational units
• # of end users
• # of modules
• Non Functional Requirements
(NFR)
Realization
• Number of concurrent users
• Maturity of the packaged software
technology
• Supplier of the packaged software
• Percentage of reusable components
• Available knowledge
• Process
• Required system reliability
• Performance constraints
Deployment
• Maturity demand organization
• Governance
Run
• Maturity technology
• Maturity Demand organisation
• Governance
• Service level reporting
• Data center costs
Event-driven
maintenance
• Age application
• # external interfaces
Planned maintenance
• Volatility (# changes / period)
• Version / update (relative to latest)
• # external interfaces
|IWSM 2016 - Estimating Packaged Software

15. Implementation realization
Package Implementation Cost Drivers Example
Deliverable Elements Typical cost drivers (realization) Parameter examples
Configuration Solution complexity #Config parameters
Organization complexity #Stakeholder workshops
Custom built functionality Functional size #Use cases, FPs
Implementation technology API calls,
Programming language
Core module(s) /
standard functionality
Vendor IP pricing Modules, options
#Users, #Transactions…
External interfaces Interface complexity I/F protocol, technology
Non-functional reqs
Internal interfaces Interface complexity I/F protocol, technology
Non-functional reqs
Data Data size #TB, #tables, #records
Data quality Pollution, redundancy
Data compatibility (ETL) tooling availability
|IWSM 2016 - Estimating Packaged Software

16. Size independent cost drivers
Productivity Drivers
Blue-print
• None
Realization
• Licenses for development
• Workplace cost
• Travel expenses
• Training cost (for domain
knowledge)
Deployment
• Infrastructure
Run
• Infrastructure
Event-driven
maintenance
• Support desk
Planned
maintenance
• Support desk
|IWSM 2016 - Estimating Packaged Software

17. Estimating Packaged Software

18. EPS-Framework
 Generic cost estimation framework for packaged software
 Two types of cost drivers
 Size dependent cost drivers
 Size drivers
 Productivity drivers
 Size independent cost drivers
 Cost drivers are specific for each lifecycle stage
|IWSM 2016 - Estimating Packaged Software

19. Size dependent cost drivers
Since...
where:
 size = almost linear dependent
 productivity = logarithmic dependent due to complexity expression
...our model exists of two size dependent cost drivers:
 size drivers, and
 productivity drivers
(*) effort = effort to realise functionality
effort(*) = size x productivity
|IWSM 2016 - Estimating Packaged Software

20. Size drivers
 Size drivers measure the size of the package architecture elements
 Each size driver can have its own size measure
 Each size driver has a delivery rate
Package architecture elements:
1. Configuration
2. Custom built functionality
3. Implemented modules
4. External interfaces
5. Internal interfaces
6. Data
|IWSM 2016 - Estimating Packaged Software

21. Size drivers - continued
 Size drivers measure the size of the package architecture elements
Size dep. driver Size x Delivery rate = Effort
This adds up to
a combined
effort
|IWSM 2016 - Estimating Packaged Software

22. Productivity drivers
 Cost-drivers that influence the effort are called productivity drivers
 Productivity drivers are different for each stage
 The stages for implementation are blueprint, realization and deployment
 Examples of productivity drivers for the realisation stage are:
 Number of concurrent users
 Maturity of the packaged software technology
 Supplier of the packaged software
 Percentage of reusable components
 Available knowledge
 Process
 Required system reliability
 Performance constraints
© NESMA 2012; IWSM 2012 22
In formula:
Size dep. driver productivity driver x combined effort = total effort
|IWSM 2016 - Estimating Packaged Software

23. Size independent drivers
 Cost-drivers that are independent of any type of sizing are called
size independent drivers
 Examples are:
 Licenses
 Hardware
 Data center floor space
|IWSM 2016 - Estimating Packaged Software

24. Packaged software cost estimation model
Size Driver XSize dependent
Cost:
Size Effort= Delivery Rate1
Size Driver XSize Effort= Delivery Raten
. . .
Productivity
Drivers
Combined
Effort
X
Total Effort

Size
independent
Cost:
Cost
Size dependent
Cost
Size independent
Total Cost

|IWSM 2016 - Estimating Packaged Software

25. Estimating packaged software

26. Sizing methods
 RICEF
 Reports, Interfaces, Conversions, Enhancements and Forms
 CEMLI
 Configurations/Customization, Extensions, Modification, Localization and
Integration
 Configuration Points
 A Gartner proprietary technique to measure the configuration activities in
existing packaged software to realize new functionalities
 COSMIC
 An ISO standardized functional sizing method
 Function Point Analysis
 An ISO standardized functional size measurement method
|IWSM 2016 - Estimating Packaged Software

27. Applicability
Method Configuration Custom Interfaces Data Modules
RICEF Yes, if the
elements are
defined
Yes, if the
functionality is
defined
Yes, if the
elements are
defined
Yes, if the
elements are
defined
No
CEMLI Yes, if the
elements are
defined
Yes, if the
functionality is
defined
Yes, if the
elements are
defined
Yes, if the
elements are
defined
No
Configuration
points
Yes No Yes Yes No
COSMIC Yes, if the
functionality is
defined
Yes, if the
functionality is
defined
Yes, if the
interface
specifications
are defined
Yes, if a data
modelis
available
No
FPA Yes, if the
functionality is
defined
Yes, if the
functionality is
defined
Yes, only
external
interfaces
Yes, if a data
modelis
available
No
|IWSM 2016 - Estimating Packaged Software

28. Estimating Packaged Software - Framework

29. Summary
 A first release of the EPS-framework published by Nesma
 Model based on cost drivers
 Size drivers
 Productivity drivers
 Size independent cost drivers
 Basis for Packaged Software Costing models
 Use of internal data
 Use of benchmark data
|IWSM 2016 - Estimating Packaged Software

30. Working group members
 Frank Vogelezang
 Ordina – Application Management & Outsourcing | Pricing Office
 frank.vogelezang@ordina.nl
 Eric van der Vliet
 CGI – Global Estimation Centre
 eric.van.der.vliet@cgi.com
 René Nijland
 Capgemini – Application outsourcing
 rene.nijland@capgemini.com
|IWSM 2016 - Estimating Packaged Software

31. More information
 Website: www.nesma.org
 Twitter: @nesma_org
 SlideShare: NESMA-NL
|IWSM 2016 - Estimating Packaged Software

32. |IWSM 2016 - Estimating Packaged Software