Request for Proposal (RFP) management - Ask the right questions and choose wisely

Request for Proposal (RFP) Management

Ask the right questions and choose wisely!

Harold van HeeringenSizing, Estimating & Control

[email protected]/haroldveendam

Rome, June 2010

Sogeti MD SEC

• Division MD – RVO’s• Sizing, Estimating & Control

>11 (COSMIC) Function Point Analysts>2 metrics consultants

• Responsible for metrics part of a quotation.>Size: FPA/COSMIC>Estimation: QSM / Sogeti tool / ISBSG>Scenario’s !>Product: Methodical Estimation Report

Request for Proposal (RFP)

• An invitation for suppliers, through a bidding process, to submit a proposal on a specific product or service (source: wikipedia)

• Information provided:>Corporate information>Schedule of bidding process>Project Summary>Detailed overview of the project>Decision criteria

Demand issues (RFP sender)

• Provide the right information>Detailed>Up-to-date

• Ask the right questions• Build a good decision model• Evaluate the proposals• Choose wisely

Supplier issues (RFP responder)

• Deliver the required functionality ?• Meet the technical and quality

requirements ?• Within the time limits required ?• Answer all RFP questions ?• Estimate the project costs accurately ?• Score the best on the clients decision

model ?• Support our claims with proof ?

Can we:

RFP – Typical Metric Questions

• What is your productivity for Java projects?

• How long do you need to build a .Net application of 500 FP?

• What is your price per function point for a 500 FP Oracle system?

• Are these the right questions ??

Generic Estimation Model

Need Software

Energy

Softwaredevelopment

process

Waste

Time

Size Size

Defects

Effort

Duration

Defects

Productivity

Metric: SizeFunction points

Metric: SizeFunction Points

Metric: EffortNumber of hoursManpower buildupPeak staff

Metric: DurationNumber of weeks

Metric: QualityNumber of defects

Metric: Process productivitySkills and experience teamDevelopment environmentComplexityQuality Management SystemExternal influences

Supplier: Estimate the project

• Requirements: often early / high level

• Estimate:>Size>Duration>Effort>(Quality)

time

Concept Definition

High Level

Design

Low level Design

Realization

Size: Cone of uncertainty

Idea

Why What How

Size: Function Points

RFP

4x

3x

2x

1x

0.8x

0.5x

Project Rate1 42 33 14 15 16 27 48 49 510 5Average 3

time

Size in FP

Concept Definition

High Level

Design

Low level Design

Realization

Metric: size

Idea

Why What How

Size: Function Points

RFP

Metric: Duration

Effort =

Impossib

le

Unpracticle

Eff

ort

Duration

Plan A: 6.000 hours

Plan B: 4.200 hours

Example: To increase duration from 10 to 12 months (20 % longer duration) the amount of effort decreases by 51 %. (same productivity and system size)

Constant

Duration4

Estimate / Business Case

Cost depended on Time-to-market

Scenarios

Example Scenario 1:

Duration: 5,5 months

Effort: 5.000 Mhr

Team size: 6,7 fte

Cost: € 430.000

Example Scenario 2:

Duration: 5,2 months

Effort: 5.500 Mhr

Team size: 7,5 fte

Cost: € 480.000

Example Scenario 3:

Duration: 4,8 months

Effort: 5.900 Mhr

Team size: 8,3 fte

Cost: € 530.000

Example Scenario 4:

Duration: 4,5 months

Effort: 6.300 Mhr

Team size: 9,4 fte

Cost: € 620.000

Example Scenario 5:

Duration: 5,8 months

Effort: 5.200 Mhr

Team size: 6,2 fte

Cost: € 400.000

Example Scenario 6:

Duration: 6,1 months

Effort: 4.900 Mhr

Team size: 5,8 fte

Cost: € 380.000

Example Scenario 7:

Duration: 6,3 months

Effort: 4.700 Mhr

Team size: 5,5 fte

Cost: € 360.000

Metric questions… answer Q1

Impossib

le

Unpractical

Eff

ort

(hou

r)

Duration

Q1: What is your productivity for Java projects?Which duration?Which size?Which technical complexity?Other influences??

PDR = 12,2

PDR = 8,2

18

Metric questions… answer Q2

Impossib

le

Unpractical

Eff

ort

Duration

Q2: How long do you need to build a .Net application of 500 FP?

Which max. cost / effort?Which quality?Which technical complexity?Other influences??

4 months

8 months

19

Metric questions… answer Q3

Impossib

le

Unpractical

Eff

ort

Duration

Q3: What is your price per function point for a 500 FP Oracle system

Which duration?Which quality?Which technical complexity?Other influences??

967 €/FP

643 €/FP

Client: Evaluating bids

• Understand the size of the project• Understand the technical

complexity• Estimate range with possible cost

estimates: minimal, probable and maximum scenario>Commercial tools>ISBSG database

Cost of high and low estimates

A

Realiza

tion

(h

ou

rs)

5.000

15.000

CB

10.000

5.000 hours

3.000 hours

7.000 hours

7.000

Estimation Result

!Fails

10.000 hours12 months

B: Realistic 5.000 hours7 months

7

Successful !Efficient!

5.000 hoursmonths

Successful ! Not efficient !

7.000 hours

11 months

A: Optimistic 3.000 hours5 months

C: Pessimistic 7.000 hours11 months

High and low estimates in practice

Assess Reality ISBSG

MIN PROB MAX

Size in FP 370 400 520

PDR in hours/FP 6.4 7.5 9.4

Effort in hours 2400 3000 4900

Duration in months 4.0 5.0 5.8

Cost x € 1.000,= 220 275 450

Cost in euro/FP 589 688 865

24

Selecting the right partner ISBSG

Is the suppliers bid realistic?

Price €/FP Duration mnth

Realistic scenario 589 - 865 4.0 – 5.8

Bids IT department / suppliers

Price €/FP Duration mnth

Proposal 1 850 4

Proposal 2 610 5

Proposal 3 540 3

Assess Reality Tool (QSM)

Proposal Productivity (hour/FP)1 8,52 6,13 5,4

Assess Reality Tool (QSM)PI vs Effective FP

300 320 340 360 380 400 420 440 460 480 500 520 540 560 580 600

Effective FP

12

14

16

18

20

22

24

PI

Proposal 1

Proposal 2

Proposal 3

Proposal 1

Proposal 2

Proposal 3

All Systems QSM 2008 Business FP Avg. Line Style 1 Sigma Line Style

RFP Question should include

• Metric to compare between competitors, for instance> Productivity (hours/FP, Function points/hour, PI)> Costs (Price/FP)> Quality (defects per function point, Mean-time-to-defect (MTTD))

• Technology > for instance Java, Cobol, Oracle or MS.NET

• Size (in Function Points or COSMIC FP)• Technical/ Functional Complexity

> for instance high/mediate/low

• Phases/Activities to include > for instance Technical Design, Coding, Unit testing,

systems testing.

• Duration required !!

Example RFP Question

‘What is your productivity rate (hours/FP) for a moderately complex Java project of 500 function points and a duration of 20 weeks? Phases to include are technical design, coding, unit testing, systems testing and support of the user organization during the user acceptance test.’

Conclusions

• Ask the right questions:>Size, Cost, Productivity, Duration and

Quality are highly inter dependent>State the questions as specific as

possible!

• Evaluate bids>Assess reality of proposals

• Choose wisely>Don’t go automatically for the cheapest

supplier!

Next steps

• IWSM, Stuttgart (Nov. 10-12, 2010)

• Workshop on proposing a standard framework for the use of software metrics in RFP management

H.S. van Heeringen

[email protected]

Twitter @haroldveendam

Thank you for your attention