Chasing Affordability with Parametrics - A Lifetime Perspective
Apgar, H
MCR Technologies

To many estimators, the ultimate purpose of a credible and detailed cost estimate is to enable a critical management objective – such as to ensure the system or product being estimated can be delivered at an affordable price.

The estimating literature is awash in budget overrun stories and the lessons they provide. But, what about the successful projects – successful in the sense that major program objectives were delivered on-time and within budget?

This paper compares selected acquisition initiatives which were created to establish "the worth" of a project and then to set cost goals and objectives based on a thorough analysis of cost drivers. Most estimators are familiar with affordability initiatives such as target pricing, Design to Cost (DTC) and Cost As an Independent Variable (CAIV).

Going beyond the argument of why affordability disciplines are critical to project success, this paper describes specific processes which have proven useful in the pursuit of cost control, with an emphasis on the influence of parametrics and related approaches to cost targeting, cost estimating, cost tracking, staff incentivizing, and cost reporting.

The paper concludes with a global discussion of "lessons learned" provided by successes and failures from real programs which are of interest to cost estimators and program managers seeking a new approach to assuring affordability.