IBS 540

Week 8

Budgeting and Cost Estimation

• The budget serves as a standard for comparison• It is a baseline from which to measure the

difference between the actual and planned use of resources

• Budgeting procedures must associate resource use with the achievement of organizational goals or the planning/control process becomes useless

• The budget is simply the project plan in another form

Estimating Project Budgets

• In order to develop a budget, we must:– Forecast what resources the project will require– Determine the required quantity of each– Decide when they will be needed– Understand how much they will cost - including the effects

of potential price inflation

• There are two fundamentally different strategies for data gathering:– Top-down– Bottom-up

Top-Down Budgeting

• This strategy is based on collecting the judgment and experiences of top and middle managers

• These cost estimates are then given to lower level managers, who are expected to continue the breakdown into budget estimates

Bottom-Up Budgeting

• In this method, elemental tasks, their schedules, and their individual budgets are constructed following the WBS or project action plan

• The people doing the work are consulted regarding times and budgets for the tasks to ensure the best level of accuracy

• Initially, estimates are made in terms of resources, such as labor hours and materials

• Bottom-up budgets should be and usually are, more accurate in the detailed tasks, but it is critical that all elements be included

Bottom-Up Budgeting

• Advantages:– Individuals closer to the work are apt to have a

more accurate idea of resource requirements– The direct involvement of low-level managers in

budget preparation increases the likelihood that they will accept the result with a minimum of aversion

– Involvement is a good managerial training technique, giving junior managers valuable experience

Budgeting

• Top-down budgeting is very common

• True bottom-up budgets are rare– Senior managers see the bottom-up process as

risky– They tend not to be particularly trusting of

ambitious subordinates who they fear may overstate resource requirements

– They are reluctant to hand over control to subordinates whose experience and motives are questionable

Work Element Costing

• The actual process of building a budget - either top-down or bottom-up - tends to be a straightforward but tedious process

• Each work element in the action plan or WBS is evaluated for its resource requirements, and then the cost

• Direct costs for resources and machinery are charged directly to the project.

TIME, QUALITY, BUDGET

TIME, QUALITY, BUDGET

• Project managers must focus on three dimensions of project success.

TIME, QUALITY, BUDGET

• Simply put, project success means completing all project deliverables

• on time,

• within budget,

• and to a level of quality that is acceptable to sponsors and stakeholders.

deliver on time !deliver a quality product !

stay within budget !

Rushing to deliver on a tight schedule means you will have to sacrifice quality or increase your budget to cover extra workers Delivering a quality product could mean missing a deadline and going over budget. Staying under budget may allow you to deliver on time, but you’ll sacrifice quality.

TIME, QUALITY, BUDGET

• It is a project manager’s job to balance the competing sides of the triangle. To do this, you have to first define the three sides of the triangle, then identify how a change in one side will affect the other two.  

Determine The Project Deliverables

• Determine the project’s deliverable. You need to know the scope of the project and the expectations of the sponsor and customer. Put down in writing all of the original requirements. Anything not on this list is out of the scope of your project.

Schedule-Budget

• Determine the project’s schedule. Identify major milestones and delivery dates. When does the project begin and end?

• Determine what it should cost to complete the project’s original requirements in time to meet the delivery schedule.

The Triple Constraint

• To be a successful project manager, you must actively manage the interactions between the three sides of the triangle throughout the project. In the end, no matter what trade-offs you make or how you put together scope, time, and cost, you will end up with a longsided triangle. But it will always be a triangle, and that’s the point.  

Links to read more

• http://www.useit.com/alertbox/20030602.html

• http://www.aabalonered.com/pdf/aaredwebmethod041002.pdf

Usability Testing

Usability Tests Overview

• The understanding of how an individual user navigates, finds information and interacts with your web site.

• It s an one on one “watch and learn” approach.

What is Usability Testing?

• One to two day process with 4-8 participants • 1-hour approx. per session • Pre-determined tasks performed • Test facilitator watches & takes notes • Sometimes video taped • Sometimes watched by development team • Results show what is working and not working

Overview

"Two distinct advantages to formal testing: it provides feedback for site development, and it is an educational opportunity for

designers and engineers, allowing them to see firsthand the decision-making process

of an average site visitor" -Jupiter

Cost Comparisons

$0Informal testing, with friends/co-workers

$300 - $500Informal Testing, 2-days, outside participants

$1000Semi-formal testing, outside company finds &prescreens participants

$2,000 - $10,000Formal, professional testing with experts laboratory orformal testing environment Human factors specialists,impartial and consistent. Trained to plan, set up,conduct, analyze and report results

User Centered Design

• UCD is the practice of designing around the user identify specific usability needs and requirements

• Referred to as human factors engineering or ergonomics

• Focus on making the design fit the user, instead of user fitting design

The Earlier the Better

• Conducting tests earlier in the process is cheaper and easier because:– Able to identify problems and make changes

early in development process – Testing wireframes or paper prototypes early

in process doesn't affect time or budget – Testing an HTML protosite is helps identify

structural & navigational issues

Use the Appropriate Method

• Usability Testing

– Collects first hand data through observation – Used throughout development process – Task oriented, non-disputable result

• Focus Groups

– Collects opinions and feedback – Used early in the development cycle – Representative user and market – Good for overall layout, information design

and navigation schemes

• Surveys

– Used throughout process – statistically significant feedback – Conducted by phone, mail or email

Identify Problem Areas Early?

•Usability testing helps to identify problem areas within the site:

– Settle disputes with data instead of guesses – Provide real feedback with actual users– Low-cost for valuable results– What is obvious to you might not be obvious to the

user– Minimize risk prior to launch

Goals and Objectives

• Identify problem areas & solution goals • Develop specific tasks to fit goals • Develop test plan (purpose, problem, profile) • Create task list • Test on co-worker or friend • Keep it simple • Plan on testing in user's own environment

• Don't try and test your entire site at once

5 Step Process

• Testing Overview

A basic plan will contain the following:

1. Overall Goals/Objectives2. Methodology3. Target Profile4. Testing Outline5. Specific Task List6. Final Evaluation/Reporting Structure

Conduct Test- What do you need?

• Checkoff List • NDA ready for signing

– http://www.secretsites.com/legal/set_legal.html

• Batteries charged for video camera(along with camera and tapes)

• Printout of site for easier notetaking • List of sequenced, predetermined tasks • Survey form ready for post-testing • Cash payment in envelope

Orientation Dos

• Introduce yourself, explain why you are here • Explain your role as a silent observer • Explain you are not testing and there are no

wrong answers • Explain participant can think aloud if desired • Keep session relaxed, use humor when

appropriate • Stay impartial

Orientation Don'ts

• Don't tell them what the tasks are in advance, or how many

• Don't say "this is so easy" - no expectations is better

• Don't rescue participants when struggling • Know when to 'give up' and list as failed task • Don't answer questions, but respond impartially

Collect Basic Data

• Could they complete the task?

• Did they need help?

• How much time did it take? (track time through testing)

• Stumbling blocks (problems/obstacles)

• Overall observations, commentary

• Sample user grid

Post Test Survey

• Prepare survey on paper for user to fill in • Ask basic questions about how user felt

overall about site – graphics, logic, copy, navigation, etc.

• Rate questions on a scale of 1–10 • Gather data about overall effectiveness of

site

Compile and Summarize Data

• Gather data as you go • Transfer handwritten notes to computer • Write reports while test is still fresh in your

mind • Summarize data in grid format showing

results, problem areas and comments • Identify problem areas • Identify global or broad-scope issues • Identify specific task-oriented issues

What (minimum) equipment do you need to formally test a web site?

• Computer with Internet access• Person to monitor the test participant:

– where they went, – what they clicked, – how long did it take…

• A task, or list of tasks for the test participant to perform• Video camera (optimum: 2 cameras) to capture:

– Participant’s face– Computer screen

Why videotape the session?

• Documentation for other members of the development team

• If something goes wrong, the test participant will have some reaction on face and on screen

• Debriefing (end of session):– Tester & monitor review session (run through video)– Stop video at interesting points to discuss:

• Reasons participant performed the task the way they did• What participant would like to happen

Layout of the room

PC is connected to notebook. Notebook displays whatever happens on the participant’s PC

Video camera set to record notebook screen and participant at PC (ideal setup would have 2

cameras)

The TV shows the video camera recording… tester & test participant review this at the end of the

session

How many people do you test?

• 5 people provide sufficient test results and feedback (Jakob Nielsen)

• For Online @ RMIT– Group 1 (establishing benchmarks):

• 5 novice users• 5 more experienced users

– Group 2:• 5 novice users after induction

How do you measure usability?

• The product is usable if participants performed most of the tasks

• Benchmarking (Group 1): – Quantitative: n% testers took x minutes to

perform task 2– Qualitative: comments/discussion, e.g., if

everyone had problem with a task, to highlight design flaws. Or positive feedback.

What happens with the results?

• Results are tabled as a report (to development team)

• Feeds back into the design process