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!
Info@AdaptiveUS.com

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!
Info@AdaptiveUS.com

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 an​ERP 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