A simulation model for strategic management process of
software projects
Masood Uzzafer, The Journal of System and Software 86(2013) 21-37
Background
In recent decades software development projects become more and more complicated and
the technical and market environment become turbulent. Decision-making in project
management has been more strategic than ever. Modelling and simulation formulate
strategies by qualifying the parameters of strategic importance to highlight the implication
of each strategic decision on the project management plan. Simulation models provide
ways to examine the consequences of strategic decisions on strategic project parameters
and project management plan and therefore help to select the best strategic decision that
suits the resources, budget, risk tolerance and management style.
The current development process models are mainly defined as a set of activities, methods
and practices based on certain modelling techniques such as System Dynamics (SD)
modelling technique and Discrete Event Simulation (DES) technique. Most of these
models are not very user-friendly and lack of flexibility for companies to choose. The
existing strategic management models present a limited view of the strategic management
process. These models cannot connect the project parameters with project planning in order
to facilitate strategic decision-making. The research work proposes a improved generic
solution: a strategic management process simulation model which provides a framework
that integrates strategic decision with strategic project parameters and project plans to help
project managers to select best strategic decisions in the software management and
development.
Strategic project parameters are very important in modelling and simulation, which are
mainly about cost and risk. Experts suggest that the estimated cost should be integrated
with the impact of risks in software development projects. Different phases of software
development process are equally important. Every process divides the phases in different
ways and emphasizes different phases. The proposed process simulation model has a
iterative nature, so the implementation of risk management model that allows iterations of
the project development phases is required. Since the strategic process parameters of the
proposed are random and change over time, the DES modelling technique matches the
characteristics better than the SD modelling technique. DES enables software development
be under changes and allow feedbacks to update parameters so that points of a process are
connected.
Results
The strategic management process simulation model is an integrated framework which
combines strategic decisions with the cost estimation, risk management and project
management planning. According to the flowchart of this proposed model (Page 25), the
generic processes are Strategy Development, Risk Management, Cost Estimation and
Project Management. The functions of these part are as following:
1. Strategy Development: conducts strategic management planning and identifies the
different plans.
2. Risk Management: assesses risks for a strategic plan, computes out the random
overall impact of the risk (Ri )j (“i” represents development phase and “j” represents
the strategy), then performs the risk management planning and prepares the plan.
3. Cost Estimation: estimates the cost in man-month, C, and integrates it with R, then
the result is overall cost (Xi) j.
4. Project Management: determines the budget and the schedule for the development of
software project.
The project manager analyses the feedback from previous phase and select the correct
activity that will update the risk management plan for the next phase.
CMMI risk management process model is utilized (page 26) in the construction of
proposed simulation model, which divides risk management into three categories:
defining a risk management strategy, identifying and analyzing risk, and implementation
a risk mitigation plan. For the risk assessment Uzzafer’s model is used which firstly
identifies and classifies risk events (based on Taxonomy Based Questionnaire) and then
analyses events to establish impact and probability. The Constructive Cost Model-II
(COCOMO-II) is used in the software cost estimation of the proposed simulation model,
which calculates the cost in three stages: Application Composition, Early Design and
Post Architecture. Microsoft 2007 is the tool in project management planning. The
application to implement the computerized parts (risk assessment and cost estimation)
uses MATLAB modelling language.
In order to have a deep understanding of the proposed model, a case-study is used. This is
a case undertaken by a software development organization that lacks software testing
capabilities. Three strategies for the organization too select (page 29, 30): (1) complete
in-house development and test, (2) in-house development and contract-out testing, and
(3) complete in-house development and testing with additional training for testing.
Different strategies associate with different sets of risk events that need to be identified
by project manager in first step. Then the manager set impact values scaling of (0-1)] for
each strategy in different phases (design, development, test…). Software Project Effort
and resources for different strategy are all illustrated. Quantified simulation results of the
cost integrated with risk are modelled by using Microsoft Project 2007 (page31), which
determines the schedule and the budget of each phase.
The results of the simulation model (page 32) show that strategy 1 will cost $531,000 in
total and requires a schedule of 8.56 months, the strategy 2 will cost $387,562 and 4.22
months, and the strategy 3 will cost $562,343 and 8.72 months. Slight differences in
parameters make big differences. The manager can choose strategy according to these
obtained results and the best strategy should be the one best suit the organization’s
resources.
Conclusions
I learnt much useful knowledge about risk management and decision making from reading
this article. Different strategies produce different risk and cost, which need manager to
have a critical view of decision-making. The proposed simulation model provides a way of
thinking the risk management in a integrated and generic manor. In this way the manager
can manage a software project from multiple aspects including cost, risk budget and
schedule. While the limitations of the model (page 34) include absence of quality and
specification, that need further working.
Yang Dan