Unit 5 Cost management

Cost management in Software Project Management involves

planning, estimating, budgeting, and controlling project costs

to ensure the project stays within budget.

Effective cost management ensures the project is completed within budget, on time, and with the desired quality.

Cost Management

Planning: Define how costs will be estimated, monitored, and controlled throughout the project.

Estimation: Predict the costs using methods like expert judgment, historical data, and bottom-up estimating.

Budgeting: Set the financial baseline, incorporating direct, indirect costs, and contingency reserves.

Cost Control

Monitoring: Track actual costs against the planned budget using tools like Earned Value Management (EVM).

Variance Analysis: Identify deviations between planned and actual costs, allowing for corrective action.

Forecasting: Predict future costs based on current project performance and trends.

Managing Changes: Control any scope changes or risks that may impact costs.

Cost Management is the planning and estimation phase, while Cost Control is the ongoing monitoring and adjusting to ensure the project stays within budget

What is the COCOMO model?

COCOMO stands for the constructive cost model, a cost estimation model for software projects based on LOC.

The COCOMO model is a widely used tool in software engineering for estimating the effort, cost, and schedule required for software development, with its three versions offering increasing levels of detail.

The COCOMO model calculates a proposed software project's time, effort, cost, and quality. In simple words, it predicts the performance of a software project.

Categories of Project:

Organic: Small, well-defined projects with a small team and familiar technology.

Semi-Detached: Medium-sized projects with some complexity and a mix of experienced and inexperienced staff.

Embedded: Complex projects with stringent constraints and high technical risk

Types of COCOMO models

· Basic model

· Intermediate model

· Detailed model

It helps estimate the cost, effort, and schedule for software development based on project size and other factors.

Basic model

Purpose: Provides a rough estimate of cost and effort based on the size of the software (measured in lines of code).

Basic COCOMO Model: The first level, Basic COCOMO can be used for quick and slightly rough calculations of Software Costs.

This is because the model solely considers based on lines of source code together with constant values obtained from software project types rather than other factors which have major influences on the Software development process as a whole.

It requires calculating the efforts which are required to develop in three modes of development that are organic mode, semi-detached mode, and embedded mode.

The basic COCOMO estimation model is given by the following expressions:

E = ax (KLOC)b
D = c x (Effort)d
P = effort/time

E is effort applied in person-months.
D is development time in months.
P is the total no. of persons required to accomplish the project.

The constant values a,b,c, and d for the Basic Model for the different categories of the system

Project Type	a	b	c	d
Organic	2.4	1.05	2.5	0.38
Semi-detached	3.0	1.12	2.5	0.35
Embedded	3.6	1.20	2.5	0.32

Example 1 – Consider a software project using semi-detached mode with 300 Kloc .find out effort estimation, development time, and person estimation.

Solution –

Effort (E) = a*(KLOC)b = 3.0*(300)1.12 = 1784.42 PM
Development Time (D) = c(E)d = 2.5(1784.42)0.35 = 34.35 Months(M)
Person Required (P) = E/D = 1784.42/34.35 = 51.9481 Persons ~52 Persons

Example 2 -For a 400 KLOC organic project, the effort is approximately 1295.31 person-months, and the development time is around 38.07 months.

Here's a breakdown of the example:

Project Size: 400 KLOC (Thousands of Lines of Code)

Development Mode: Organic (assuming a relatively simple, well-understood project)

COCOMO Formulas (Basic Model):

Effort (E): E = a * (KLOC)^b

Development Time (D): D = c * (E)^d

Calculations:

Effort (E): E = 2.4 * (400)^1.05 = 1295.31 person-months

Development Time (D):

D = 2.5 * (1295.31)^0.38 = 38.07 months

Therefore, for this 400 KLOC organic project, the Basic COCOMO model estimates:

Effort: Approximately 1295.31 person-months

Development Time: Approximately 38.07 months

Key Advantages:

· Provides a structured approach to cost estimation.

· Useful for estimating effort and resources in the early stages of a project.

· Offers a way to assess the impact of various factors (e.g., complexity, team experience) on project cost and effort.

Limitations:

· Relies heavily on accurate size estimation (lines of code).

· Assumes linear relationships between project size and cost, which may not always hold true.

· Can be less effective for very small projects or projects with rapidly changing technologies.

Milan Tomic

Hi. I’m Designer of Blog Magic. I’m CEO/Founder of ThemeXpose. I’m Creative Art Director, Web Designer, UI/UX Designer, Interaction Designer, Industrial Designer, Web Developer, Business Enthusiast, StartUp Enthusiast, Speaker, Writer and Photographer. Inspired to make things looks better.