Goals in software engineering economics are mostly business goals (or business objectives)
A business goal relates business needs (such as increasing profitability) to investing resources (such as starting a project or launching a product with a given budget, content, and timing). Goals apply to operational planning (for instance, to reach a certain milestone at a given date or to extend software testing by some time to achieve a desired quality level—see Key Issues in the Software Testing KA) and to the strategic level (such as reaching a certain profitability or market share in a stated time period).
An estimate is a well-founded evaluation of resources and time that will be needed to achieve stated goals (see Effort, Schedule, and Cost Estimation in the Software Engineering Management KA and Maintenance Cost Estimation in the Software Maintenance KA). A software estimate is used to determine whether the project goals can be achieved within the constraints on schedule, budget, features, and quality attributes. Estimates are typically internally generated and are not necessarily visible externally. Estimates should not be driven exclusively by the project goals because this could make an estimate overly optimistic. Estimation is a periodic activity; estimates should be continually revised during a project
A plan describes the activities and milestones that are necessary in order to reach the goals of a project (see Software Project Planning in the Software Engineering Management KA). The plan should be in line with the goal and the estimate, which is not necessarily easy and obvious—such as when a software project with given requirements would take longer than the target date foreseen by the client. In such cases, plans demand a review of initial goals as well as estimates and the underlying uncertainties and inaccuracies. Creative solutions with the underlying rationale of achieving a win-win position are applied to resolve conflicts.
To be of value, planning should involve consideration of the project constraints and commitments to stakeholders. Figure 12.4 shows how goals are initially defined. Estimates are done based on the initial goals. The plan tries to match the goals and the estimates. This is an iterative process, because an initial estimate typically does not meet the initial goals.
Estimation Techniques
Estimations are used to analyze and forecast the resources or time necessary to implement requirements (see Effort, Schedule, and Cost Estimation in the Software Engineering Management KA and Maintenance Cost Estimation in the Software Maintenance KA). Five families of estimation techniques exist:
• Expert judgment
• Analogy
• Estimation by parts
• Parametric methods
• Statistical methods.
No single estimation technique is perfect, so using multiple estimation technique is useful. Convergence among the estimates produced by different techniques indicates that the estimates are probably accurate. Spread among the estimates indicates that certain factors might have been overlooked. Finding the factors that caused the spread and then reestimating again to produce results that converge could lead to a better estimate.
Addressing Uncertainty
Because of the many unknown factors during project initiation and planning, estimates are inherently uncertain; that uncertainty should be addressed in business decisions. Techniques for addressing uncertainty include
• consider ranges of estimates
• analyze sensitivity to changes of assumptions
• delay final decisions.
Prioritization
Prioritization involves ranking alternatives based on common criteria to deliver the best possible value. In software engineering projects, software requirements are often prioritized in order to deliver the most value to the client within constraints of schedule, budget, resources, and technology, or to provide for building product increments, where the first increments provide the highest value to the customer (see Requirements Classification and Requirements Negotiation in the Software Requirements KA and Software Life Cycle Models in the Software Engineering Process KA).
Decisions under Risk
Decisions under risk techniques are used when the decision maker can assign probabilities to the different possible outcomes (see Risk Management in the Software Engineering Management KA). The specific techniques include
• expected value decision making
• expectation variance and decision making
• Monte Carlo analysis
• decision trees
• expected value of perfect information.
Decisions under Uncertainty
Decisions under uncertainty techniques are used when the decision maker cannot assign probabilities to the different possible outcomes because needed information is not available (see Risk Management in the Software Engineering Management KA). Specific techniques include
• Laplace Rule
• Maximin Rule
• Maximax Rule
• Hurwicz Rule
• Minimax Regret Rule.
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Published on : 30-May-2018
Ref no : DTC-WPUB-000088
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