Introduction to Decision Making and Managing System Development

Managing System Development

• Role of Systems Engineering (SE): According to ISO 21500, Systems Engineering is a part of project management that provides:     * Technical guidelines.     * System integration.     * Technical coordination.

• Initiation of System Development:     * Process often begins with a customer who identifies a need and requests support.     * This request usually takes the form of a Request for Proposal (RFP).     * Following a corporate decision to respond, a program/project manager and a proposal team are assigned.

• Statement of Work (SOW):     * A critical element of the proposal that provides a narrative description of the work needed to develop the system.     * SE Focus in SOW:         * The product to be developed.         * Ensuring the SOW includes all necessary products and services.         * Responsiveness to customer needs.         * Ensuring the SOW is based on a Credible Concept of Operations.     * Examples of Credible Concept of Operations:         * Reviewing implied design for the use and availability of legacy components.         * Examining the integration of Commercial Off-The-Shelf (COTS) components.         * Determining Technology Readiness Levels (TRL) for important subsystems envisioned in preliminary design.

• Technology Readiness Level (TRL): Developed by NASA to assess the maturity of evolving technologies.

Work Breakdown Structure (WBS)

• Definition: One of the most important techniques for systematic organization of project tasks. It is also referred to as a Project or System Breakdown Structure.

• Scope: Defines the whole system to be developed, produced, tested, deployed, and supported, including hardware, software, services, and data.

• Function: Defines the skeleton or framework for project implementation and is often a contractual requirement in competitive developments.

• Control Mechanism: Ensures all essential tasks are defined, assigned, scheduled, and controlled in terms of products and services. Software such as MS Project is commonly used.

• Hierarchical Structure:     * Typically follows a hierarchical tree structure.     * Level 1: The system project (some begin at Level 0).     * Level 2 Categories:         * System Product: Total effort for development, production, and integration of the system and supportive equipment.         * System Support: Equipment, facilities, and services (Supply, Transport, Handling, Documentation, training).         * System Testing: Integration, system, installation, and operation testing.         * Project Management: Planning and Control.         * Systems Engineering: Analysis, trade-off studies, and evaluations.

• Levels 3 to 5 (Example Breakdown):     * Level 3: Subsystems (e.g., Subsystem A, Subsystem B).     * Level 4: Components (e.g., Component $A_1$, Component $A_2$).     * Level 5: Functional Design, Engineering Design, Fabrication, Unit Test, Documentation.

• System Support Sub-headings:     1. Supply support.     2. Test equipment.     3. Transport and handling.     4. Documentation.     5. Facilities.     6. Personnel and training.

• System Testing Categories:     * Integration Testing: Stepwise integration of components.     * System Testing: Overall system tests and result evaluation.     * Acceptance Testing: Factory and installation tests.     * Operational Testing and Evaluation: Effectiveness in a realistic environment.

• Toy Development Case Study (WBS Example):     * 1.1 Concept and Design: Market Research (Analyze trends, conduct surveys/focus groups) and Concept Design (Brainstorm, sketches, safety evaluation).     * 1.2 Product Development: Materials selection (compliance with safety standards), Product Engineering (finalize dimensions), Prototype Development (3D models, physical prototypes, audience feedback).     * 1.3 Manufacturing Setup: Supplier selection (negotiate pricing) and Production Line Setup (organize assembly line, source raw materials).     * 1.4 Marketing and Launch: Branding/Packaging, Marketing Strategy, Sales and Distribution.     * 1.5 Post-Launch: Customer feedback and continuous improvement.

Project Cost and Budget Estimation

• WBS and Cost Control: The WBS is the heart of cost estimating. Lowest indenture work packages correspond to cost allocation items.

• Budgeting Approaches:     * Top-Down: Target cost is distributed from the top and partitioned downward as lower-level packages are defined.     * Bottom-Up: Pricing starts from the base tasks. It is more tedious and elaborate but significantly more accurate.

• Bid Calculation:     * $\text{Bid} = \text{Material} + \text{Labor} + \text{Equipment} + \text{Capital} + \text{Overhead} + \text{Profits}$     * $\text{Bid} = \text{Resources} + \text{Profits}$

• Cost Components Defined:     * Material: Consumables and construction materials.     * Labor: Wages, benefits, and payroll costs.     * Equipment: Owning, leasing, and operating machinery.     * Capital: Financing costs and tied-up money.     * Overhead: Indirect expenses (rent, utilities, insurance, administration).     * Profits: Targeted return above costs.

• Uncertainty in Forecasts: High in material and labor usage/price. Standardized components and experienced estimators lower uncertainty.

• Rules of Thumb: Easier than starting from scratch (e.g., Construction cost by square feet, Printing by page count).

• Estimation Difficulties: Lack of historical data, multiple stakeholders controlling the budget, "flexibility" in input estimates, and lumpy usage of resources over time.

• Work Element Costing Calculations:     * Direct Cost Formula: $\text{Hours} \times \text{Labor Rate} \times (1 + \text{Overhead Percentage})$     * Example Case: 25 hours at $\$17.50/hr$ with $84\%$ overhead:         * 25\,\text{hr} \times \17.50 \times 1.84 = \$805.00$     * Accounting for Personal Time (e.g., 12%):         * 1.12 \times 25\,\text{hr} \times \17.50 \times 1.84 = \$901.60$

Project Time Management and Scheduling

• Definition: Conversion of a project action plan into an operating timetable.

• Scheduling Flow:     1. Create WBS/Scope Baseline.     2. Define Activities (Activity/Milestone List).     3. Sequence Activities (Network Diagrams).     4. Estimate Activity Resources.     5. Estimate Activity Durations.     6. Develop Schedule (Project Schedule).     7. Control Schedule.

• Integrity in Scheduling: Estimates must be honest; false deadlines must be avoided, and alternatives evaluated.

• Network Scheduling Benefits: Provides a consistent framework, shows interdependencies, indicates resource needs, and determines the expected completion date through critical activity identification.

Network Scheduling Techniques: PERT and CPM

• Program Evaluation Review Technique (PERT):     * Developed for the Polaris missile project in 1958.     * Known by PMI as ADM/PERT (Arrow Diagram Method).     * Originally used probabilistic time estimates.

• Critical Path Method (CPM):     * Developed by DuPont around late 1950s.     * Known by PMI as PDM/CPM (Precedence Diagram Method).     * Originally used deterministic time estimates and allowed project "crunching."

• Modern Integration: CPM and PERT have largely blended into a single approach used by software like Microsoft Project.

• Key Terminology:     * Activity: A task requiring time and resources.     * Event: The result of completing activities.     * Network: Combination of activities and events drawn left-to-right.     * Path: A series of connected activities.     * Critical Activity/Path: A delay here delays the entire project. There is always at least one critical path.

• Relationships between Activities:     * Sequential: One must end before the next begins.     * Parallel: Tasks occur simultaneously.     * Immediate Predecessor: Must be finished just before a specific task start.

• Task Dependency Types (Microsoft Project):     * Finish-to-start (FS): B cannot start until A finishes (most common).     * Start-to-start (SS): B cannot start until A starts.     * Finish-to-finish (FF): B cannot finish until A finishes.     * Start-to-finish (SF): B cannot finish until A starts.

Critical Path Method (CPM) Calculations

• Format Options:     * Activity on Node (AON): Tasks are nodes (circles/boxes).     * Activity on Arrow (AOA): Tasks are arrows; nodes represent project "states."

• CPM Assumptions: Tasks are well-defined, project ends when all are complete, and jobs follow a given technological sequence.

• Calculating the Critical Path:     * Slack: The amount of time a non-critical activity can be delayed without affecting the end date.     * $Slack = LF - EF$ or $LS - ES$     * Critical path activities have zero slack.     * Forward Pass Formulas:         1. Earliest Start (ES): The max Earliest Finish (EF) of all immediate predecessors.         2. Earliest Finish (EF): $ES + \text{Task Duration (T)}$     * Backward Pass Formulas:         1. Latest Finish (LF): The min Latest Start (LS) of all immediate successors. For the final task, LF = EF.         2. Latest Start (LS): $LF - \text{Task Duration (T)}$

• Example Findings:     * Project with paths {A,C,E,F,G,H} at 100 days vs others at 70, 60, and 90 days. The 100-day path is the CP and the project bottleneck.

PERT: Expected Task Time

• Three Time Estimates:     * Optimistic time ($t_o$): Duration if everything goes unusually well.     * Most likely time ($t_m$): Duration with the highest probability.     * Pessimistic time ($t_p$): Duration if many things go wrong (excluding scope changes).

• Expected Duration Formula ($t_e$):     * $t_e = \frac{t_o + 4t_m + t_p}{6}$

• Example Calculation Table:     * Activity A: $t_o=2, t_m=3, t_p=4 \rightarrow t_e = \frac{2 + (4 \times 3) + 4}{6} = 3.00$     * Activity H: $t_o=6, t_m=8, t_p=10 \rightarrow t_e = \frac{6 + (4 \times 8) + 10}{6} = 8.00$