System Cost Effectiveness

The project team, led by the PM and the CSE, are also in search of a cost-effective solution for the customer. In order that this concept have real substance, we must be in a position to ultimately quantify both the system cost as well as its effectiveness.

System cost will be approached from a life-cycle perspective. This means that a life-cycle cost model (LCCM) will eventually be constructed, with the following three major categories of cost:

1. Research, development, test, and evaluation (RDT&E)

2. Acquisition or procurement, and

3. Operations and maintenance (O&M)

The latter category, by our definition, will also include the cost of system disposal when it is necessary to do so. System cost will also be viewed as an independent variable, expressed as ''cost as an independent variable'' (CAIV). The Department of Defense (DoD) sees CAIV as a ''strategy that entails setting aggressive yet realistic cost objectives when defining operational requirements and acquiring defense systems and managing achievement of these objectives'' [1.3].

System effectiveness will also need to be calculated. One perspective regarding system efectiveness is that it is a function of three factors [1.4]:

1. Availability

2. Dependability

3. Capability

Availability is sometimes called the readiness reliability, whereas dependability is the more conventional reliability that degrades with time into the system operation. Capability is also referred to as system performance. The approach adopted here with respect to effectiveness is somewhat less restrictive, allowing the CSE's team the flexibility to select those effectiveness measures that are fundamental to the system design as well as of special importance to the customer and user.

System cost-effectiveness considerations may thus be visualized as a graph of effectiveness (ordinate) plotted against total life-cycle cost (abcissa). As such, we see that this type of graph implies that several systems can be built, each representing a ''point'' on such a plot. Our overall task as architects and designers of systems is to find the point design that is to be recommended to the customer from among a host of possible solutions. This further implies that the process will include the exploration of several alternatives until a preferred alternative is selected.

1.2.3 System Errors

In broad terms, all systems are said to exhibit fundamental errors known as Type I and Type II errors. These errors are related to the field of hypothesis testing whereby errors are made by (a) rejecting a hypothesis that is true (Type I error) or (b) accepting a false hypothesis (Type II error). From a systems engineering perspective, a major task of the CSE's team is to reduce such errors so as to satisfy the system requirements. Three examples of these errors are briefly discussed below.

Many of us have car alarm systems that are intended to go off when an intruder is trying to get into our car. There is an error if and when the alarm does not go off when forced entry is being attempted (Type I). At the same time, we do not wish to be awakened at 3 o'clock in the morning when the alarm goes off from the car in front of our house, without any type of intrusion (Type II error).

On a somewhat larger scale, we have radar systems that are intended to detect targets at specified ranges. When they fail to do so, an error (Type I) has been committed. On the other hand, these systems also claim, from time to time, that a target is present when no such target exists. This latter case (a Type II error) is called a false alarm. These types of errors for a search radar are explored in some detail in later chapters of this text. Specific detection and false alarm probabilities are calculated, and the relationship between them is examined.

On an even larger scale, we have situations presented by our national air transportation system. When the system fails to get you to your destination at the expected time of arrival (ETA), an error has been committed that all of us have experienced. And, if you're trying to get to New York from Washington, and wind up in Philadelphia due to bad weather, the system is delivering an unintended result.

Understanding when systems are likely to fail to do what they're supposed to do, and also do what they're not supposed to do, is often a central theme of the systems engineering activities. These, of course, can be expressed as problems that need to be solved by the management and technical personnel working on the system. At the same time, there are many problems that might be considered chronic issues when managing an engineering project. A sample of such problems is presented and discussed in the next section.


An article in the Washington Post [1.7] described an industry contract with the Federal Aviation Administration (FAA) in the terms ''out-of-control con tract'' and ''how a good contract goes sour.'' It went on to describe how a ''cure letter'' was sent to the contractor saying that ''delays in a $4 billion contract to modernize the computers used in the nation's air traffic control system were unacceptable.'' Although this admonition pointed to delays and therefore could be connected to not getting the work done on time, it is likely that time delays resulted from performance issues and were also related to the cost of the program. In general terms, problems that surface on a typical project usually show themselves ultimately in terms of three main features:

1. Schedule (time)

2. Cost (as compared with the original budget)

3. Performance

These are the ''big three'' of project management and systems engineering management. Projects are originally planned to meet the performance requirements within the prescribed time and budget constraints.

Although there are numerous reasons why projects do not satisfy these three key aspects of a system development [1.8, 1.9, 1.10], several of the most common such reasons are:

1. Inadequate articulation of requirements

2. Poor planning

3. Inadequate technical skills and continuity

4. Lack of teamwork

5. Poor communications and coordination

6. Insufficient monitoring of progress

7. Inferior corporate support

The following discussion expands on these reasons for problems and lack of success.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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