656105607.
xlsx
Adaptive US BABoK Formula Wo
Document Name Adaptive US BABoK Formula Workbook
Version 1.1
Revision History
Version Date
1.0 21-Dec-22
1.1 23-Jan-23
S.No. Version
1 3.0
Adaptive Processes Be with the Best! 1 of 32
656105607.xlsx
Adaptive US
Think BA. Think Adaptive!
[email protected]
www.AdaptiveUS.com
This document is the property of and proprietary to Adaptive US. Contents of th
any unauthorized person. This document may not, in whole or in part, be redu
system, translated, or transmitted in any form or by any means, e
Adaptive Processes Be with the Best! 2 of 32
656105607.xlsx
tive US BABoK Formula Workbook
e US BABoK Formula Workbook
Date 23-Jan-23
Revision History
Author(s) Changes made
LN Mishra Approved version
Fathima Suhair Formatted the workbook
Reference Document Name
BABoK V3.0
Adaptive Processes Be with the Best! 3 of 32
656105607.xlsx
Adaptive US
Think BA. Think Adaptive!
[email protected]
www.AdaptiveUS.com
d proprietary to Adaptive US. Contents of this document should not be disclosed to
ument may not, in whole or in part, be reduced, reproduced, stored in a retrieval
r transmitted in any form or by any means, electronic or mechanical.
Adaptive Processes Be with the Best! 4 of 32
Financial Analysis
Term Formula
Gross margin Sales price - Variable cost of production
Net margin Sales price - Total cost of production
Gross profit Gross margin * Number of units sold
Net profit Net margin * Number of units sold
Cost of Investment Direct number
Cost of Change Cost of investment + Other associated costs
of change (Transition cost)
Total cost of ownership Cost of change + Cost of maintenace
(TCO)
Total benefit Sum total of all benefits. Benfit could added
revenue or reduced cost.
Net benefit Total benefits - Total cost of ownership
(TCO)
Return on Investment Return on Investment (in %) = Net Benefits
(ROI) * 100/Cost of Change.
Payback Period Time period needed to recover cost of
change
Discount Rate Interest rate + Risk premium (~5%)
Discounted value Future Value / (1+ Discount rate) To the
Power (Year #)
Present value Sum of Discounted Future Value
Net Present Value Present Value – Cost of Investment
Internal Rate of Return The IRR calculation is based on the discount
(IRR) rate at which the NPV is 0:
Net Present Value = (-1 x Original
Investment) + Sum of (net benefit for
that period / (1 + IRR) for all periods) = 0.
Financial Analysis
Definition
Margin made on each sale
Margin made on each sale after considering overhead expenses
Total margin
Total net margin
Related to the financial investment made or derived from implementing the
change e.g. Return on Investment (ROI) - Out of pocket expenses
The cost of a change includes the expected cost of building or acquiring the
solution components and the expected costs of transitioning the enterprise
from the current state to the future state. This could include the costs
associated with changing equipment and software, facilities, staff and other
resources, buying out existing contracts, subsidies, penalties, converting
data, training, communicating the change, and managing the roll out.
Cost to acquire a solution, the cost of using the solution, and the cost of
supporting the solution for the foreseeable future, combined to help
understand the potential value of a solution. In the case of equipment and
facilities, there is often a generally agreed to life expectancy. However, in
the case of processes and software, the life expectancy is often unknown.
Some organizations assume a standard time period (for example, three to
five years) to understand the costs of ownership of intangibles like
processes and software.
The payback period provides a projection on the time period required to
generate enough benefits to recover the cost of the change, irrespective of
the discount rate. Once the payback period has passed the initiative would
normally show a net financial benefit to the organization, unless operating
costs rise. There is no standard formula for calculating the payback period.
The time period is usually expressed in years or years and months.
The discount rate is the assumed interest rate used in present value
calculations. In general, this is similar to the interest rate that the
organization would expect to earn if it invested its money elsewhere. Many
organizations use a standard discount rate, usually determined by its finance
officers, to evaluate potential investments such as change initiatives using
the same assumptions about expected interest rates. Sometimes a larger
discount rate is used for time periods
that are more than a few years into the future to reflect greater uncertainty
and risk.
Present value of a future income
Present value of all future incomes
This is not asked to compute in the exam
Organization A is embarking on implementing anERP system. The organization will spend USD 500K as license
fees. Cost of training is expected to be USD 200K. The organization shall spend 100K per year to maintain the
system. The organization expects a benefit of USD 300K per year by implementing the system. The useful life of
the project is 5 years.
1. Cost of investment for the solution is
a. 500K
b. 300K
c. 700K
d. 800K
2. Cost of change for the solution is
a. 500K
b. 300K
c. 700K
d. 800K
3. Total cost of ownership for the project over a 5 year period is
a. 500K
b. 300K
c. 700K
d. 1200K
4. Total benefit the project over a 5 year period is
a. 2500K
b. 1500K
c. 3500K
d. 4000K
5. Net benefit the project over a 5 year period is
a. 300K
b. 500K
c. 700K
d. 400K
6. ROI for the project over a 5 year period is
a. 33%
b. 25%
c. 36%
d. 43%
7. Payback period for the project is
a. Between 1 to 2 years
b. Between 2 to 3 years
c. Between 3 to 4 years
d. Between 4 to 5 years
Year > 1 2 3
Benefit 300 300 300
Maintenance cost 100 100 100
Net benefit 200 200 200
Procurement cost 500 0 0
Training cost 200 0 0
Cumulative net benefit -500 -300 -100
Cash flow -500 200 200
Cost of change 700 Procurement cost + Training cost
Total cost of ownership 1200 Total cost of change + Maintenance co
Total benefit 1500 Sum of total benefits
Net benefit 300 Total benefit - total cost
RoI 43 Return on Investment (in %) = Net Ben
Change.
Payback period 3.5 Time taken to recover cost of change
4 5
300 300
100 100
200 200
0 0
0 0
100 300
200 200
nt cost + Training cost
of change + Maintenance cost
al benefits
fit - total cost
nvestment (in %) = Net Benefits * 100/Cost of
to recover cost of change
Variance analysis
Value Unit
Planned value 500 KUSD
Actual value 450 KUSD
Variance -10 %
Variance = (Actual value - Planned Value)*100/Planned Value
Risk Analysis
Total Risk
# Risk description Impact Probability
1 Lack of stakeholder engagement 2 1
2 Uncontrolled changes 3 2
3 Rapid changes in technology 2 1
4 Fierce competition 3 1
5 Inadequate planning 2 3
6 Incomplete stakeholder list 3 1
7 Silent stakeholders 3 1
8 Incomplete non-functional requirements 2 1
9 Stakeholder dis-agreement on requirements 3 2
10 Lack of adequate details in requirements 2 1
11 Stakeholder dis-agreement on priorities 3 1
12 Non-availability of stakeholders 2 3
13 Implicit requirements 3 1
14 Changing scope 3 1
15 Lack of adequate time for business analysis 2 1
16 Lack of BA domain knowledge 3 2
17 Stakeholders pushing through requirements 2 1
18 Delay in stakeholder acceptance 3 1
19 Lack of stakeholder domain knowledge 2 3
20 Changing business environment 3 1
72
Risk Number Mitigation plan
2
6
2
3
6
3
3
2
6
2
3
6
3
3
2
6
2
3
6
3
Balanced Score
ID Parameters Indicator Weight Max Score Q1 2019
type
1 Financials 50 250 2
1.1 Revenue Lagging 10 50 2
1.2 Gross margin Lagging 10 50 3
1.3 Future bookings Leading 30 150 4
2 People 20 100 2
2.1 Employee statisfaction score Lagging
2.2 Investment in employee skill Leading
building
3 Process 10 50 3
4 Customer 20 100 3
100 500 46.0
Formula = Sum of (Weight * Rating)
Balanced Scorecard
Q2 2019 Q3 2019 Q4 2019 Q3 2020 Q4 2020 Q3 2021 Q4 2021 Q3 2022
2 3
3 4
4 4
3 2
52.0 62.0
Q4 2022
656105607.xlsx
Simple Decision Matrix
Criteria Possible Alternatives
Webex Join.me Go to meeting
Reliability 1 0 1
Cost of solution 0 1 1
Auido quality 1 0 1
Bandwidth requirement 0 1 1
Time to learn 1 0 1
3 2 5
Formula = Sum of Ratings
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Weighted Decision Matrix
Criteria Importance / Possible Alternatives
Criticality
Webex Join.me Go to meeting Zoom
Reliability 5 5 2 4
Cost of solution 3 2 5 3
Auido quality 4 5 3 3
Bandwidth 2 2 5 1
requirement
Time to learn 4 1 2 5
59 55 63
Also known as Pugh (Pew) matrix Document storage
Formula = Sum of (Importance * Rating)
Version 2.0 @Adaptive Processes Consulting Pvt Ltd 20 of 32
Decision Tree
Decision Choice
Set up own
company
To promote business in a
foreign country
Work with a
partner
Formula = Sum of (Expected outcome * Probability)
Decision Tree
Expected Value
Expected outcome Probability Multiply Expected Outcome with
Probability
0.5 million USD 0.2 0.10
0.3 million USD 0.4 0.12
0.1 million USD 0.4 0.04
0.5 million USD 0.5 0.25
0.3 million USD 0.3 0.09
0.1 million USD 0.2 0.02
y)
Potential value (Sum
of all expected values)
0.26
0.36
ROM / 1 Expert judgment
Component # Expert 1 Estimate Person Week
Project 1 400K +/- 50%
Accuracy Low
Delphi
Estimation Iteration 1 Estimation Iteration 1 Expert Estimation Iteration 1 Expert 3
Expert 1 Estimate 2 Estimate Estimate
400 300 600
Estimation Iteration 2 Estimation Iteration 2 Expert Estimation Iteration 2 Expert 3
Expert 1 Estimate 2 Estimate Estimate
400 450 550
Accepted Estimate 500
All Estimates in Person-Weeks of Effort
Top Down
Total Budget available 400 Person-Week
Component Allocated Cumulative Budgeted Effort
Budget % Budget %
Schedule management 12 12 48
Time management 12 24 48
Defect management 10 34 40
Requirements management 10 44 40
Risk management 8 52 32
Issue management 8 60 32
Audit management 8 68 32
User management 8 76 32
Permissions management 6 82 24
Menu management 6 88 24
Status reporting 6 94 24
Dashboard 6 100 24
Bottom Up
Component # Person-Weeks
Schedule management 40
Time management 60
Defect management 40
Requirements management 20
Risk management 30
Issue management 30
Audit management 20
User management 40
Permissions management 40
Menu management 40
Status reporting 20
Dashboard 40
Total 420
Also known as WBS method
This is possibly the most used technique
PERT (Program Evaluation Review Technique)
Component # Expected Optimistic Pessimistic PERT Value
Schedule management 40 32 72 44
Time management 60 48 108 66
Defect management 40 32 72 44
Requirements management 20 16 36 22
Risk management 30 26 54 33
Issue management 30 24 54 33
Audit management 20 16 36 22
70
User management 40 32 72 44 60
50
Permissions management 40 32 72 44
40
Menu management 40 32 72 44 30
20 17
Status reporting 20 16 36 22
10
Dashboard 40 32 72 44 0
Optimi
Total 420 338 756 462
PERT Estimate = (4*Expected Estimate +
Optimistic Estimate + Pessimistic
Estimate)/6
Optimistic 17
Expected 66
Pessimistic 17
70 66
60
50
40
30
20 17 17
10
0
Optimistic Expected Pessimistic
Parametric Estimation
Per Unit # of units Total
Effort
User Interfaces 6 40 240
Reports 4 20 80
Database objects 2 80 160
Total Effort 480
Rolling Wave Estimation
Component # Iteration 1 Iteration 1 Iteration 2 Iteration 2
Estimate Actual Estimate Actual
Schedule management 40 44 NA 44
Time management 60 70 NA 70
Defect management 40 50 NA 50
Requirements management 20 NA 22 23
Risk management 30 NA 33 33
Issue management 30 NA 33 35
Audit management 20 NA 22 NA
User management 40 NA 44 NA
Permissions management 40 NA 44 NA
Menu management 40 NA 44 NA
Status reporting 20 NA 22 NA
Dashboard 40 NA 44 NA
Total Cost 420 164 475 477
Iteration 3
Estimate
NA
NA
NA
NA
NA
NA
25
49
49
49
25
49
501
