The high cost and risk associated with these IT outsourcing contracts means that they need to be carefully monitored and managed. Both the client and the supplier need to establish a means by which the client's software assets can be quantified and the supplier's performance can be evaluated and compared to agreed targets. The most common mechanism for providing these performance measurements is to measure the supplier's productivity rates in units of software product delivered per unit of effort or the units of software product delivered per unit cost.

The units of software product delivered are usually measured using a Functional Size Measurement (FSM) method called Function Point Analysis (FPA). FPA was developed by Alan Albrecht in the late 1970s and has since been refined by the International Funtion Point Users Group (IFPUG).

One of the initial design criteria for function points was to provide a mechanism that both software developers and users could utilize to define functional requirements. It was determined that the best way to gain an understanding of the users' needs was to approach their problem from the perspective of how they view the results an automated system produces. Therefore, one of the primary goals of Function Point Analysis is to evaluate a system's capabilities from a user's point of view. To achieve this goal, the analysis is based upon the various ways users interact with computerized systems. From a user's perspective a system assists them in doing their job by providing five (5) basic functions. Two of these address the data requirements of an end user and are referred to as Data Functions. The remaining three address the user's need to access data and are referred to as Transactional Functions.

The Five Components of Function Points

· Data Functions
     · Internal Logical Files
     · External Interface Files

· Transactional Functions
     · External Inputs
     · External Outputs
     · External Inquiries

Internal Logical Files - The first data function allows users to utilize data they are responsible for maintaining. For example, a pilot may enter navigational data through a display in the cockpit prior to departure. The data is stored in a file for use and can be modified during the mission. Therefore the pilot is responsible for maintaining the file that contains the navigational information. Logical groupings of data in a system, maintained by an end user, are referred to as Internal Logical Files (ILF).

External Interface Files - The second Data Function a system provides an end user is also related to logical groupings of data. In this case the user is not responsible for maintaining the data. The data resides in another system and is maintained by another user or system. The user of the system being counted requires this data for reference purposes only. For example, it may be necessary for a pilot to reference position data from a satellite or ground-based facility during flight. The pilot does not have the responsibility for updating data at these sites but must reference it during the flight. Groupings of data from another system that are used only for reference purposes are defined as External Interface Files (EIF).

The remaining functions address the user's capability to access the data contained in ILFs and EIFs. This capability includes maintaining, inquiring and outputting of data. These are referred to as Transactional Functions.

External Input - The first Transactional Function allows a user to maintain Internal Logical Files (ILFs) through the ability to add, change and delete the data. For example, a pilot can add, change and delete navigational information prior to and during the mission. In this case the pilot is utilizing a transaction referred to as an External Input (EI). An External Input gives the user the capability to maintain the data in ILF's through adding, changing and deleting its contents.

External Output - The next Transactional Function gives the user the ability to produce outputs. For example a pilot has the ability to separately display ground speed, true air speed and calibrated air speed. The results displayed are derived using data that is maintained and data that is referenced. In function point terminology the resulting display is called an External Output (EO).

External Inquiries - The final capability provided to users through a computerized system addresses the requirement to select and display specific data from files. To accomplish this a user inputs selection information that is used to retrieve data that meets the specific criteria. In this situation there is no manipulation of the data. It is a direct retrieval of information contained on the files. For example if a pilot displays terrain clearance data that was previously set, the resulting output is the direct retrieval of stored information. These transactions are referred to as External Inquiries (EQ).

In addition to the five functional components described above there are two adjustment factors that need to be considered in Function Point Analysis.

Functional Complexity - The first adjustment factor considers the Functional Complexity for each unique function. Functional Complexity is determined based on the combination of data groupings and data elements of a particular function. The number of data elements and unique groupings are counted and compared to a complexity matrix that will rate the function as low, average or high complexity. Each of the five functional components (ILF, EIF, EI, EO and EQ) has its own unique complexity matrix.

Value Adjustment Factor - The Unadjusted Function Point count is multiplied by the second adjustment factor called the Value Adjustment Factor. This factor considers the system's technical and operational characteristics and is calculated by answering 14 questions. The factors are:

1. Data Communications
The data and control information used in the application are sent or received over communication facilities.

2. Distributed Data Processing
Distributed data or processing functions are a characteristic of the application within the application boundary.

3. Performance
Application performance objectives, stated or approved by the user, in either response or throughput, influence (or will influence) the design, development, installation and support of the application.

4. Heavily Used Configuration
A heavily used operational configuration, requiring special design considerations, is a characteristic of the application.

5. Transaction Rate
The transaction rate is high and influences the design, development, installation and support.

6. On-line Data Entry
On-line data entry and control information functions are provided in the application.

7. End -User Efficiency
The on-line functions provided emphasize a design for end-user efficiency.

8. On-line Update
The application provides on-line update for the internal logical files.

9. Complex Processing
Complex processing is a characteristic of the application.

10. Reusability
The application and the code in the application have been specifically designed, developed and supported to be usable in other applications.

11. Installation Ease
Conversion and installation ease are characteristics of the application. A conversion and installation plan and/or conversion tools were provided and tested during the system test phase.

12. Operational Ease
Operational ease is a characteristic of the application. Effective start-up, backup and recovery procedures were provided and tested during the system test phase.

13. Multiple Sites
The application has been specifically designed, developed and supported to be installed at multiple sites for multiple organizations.

14. Facilitate Change
The application has been specifically designed, developed and supported to facilitate change.

Each of these factors is scored based on their influence on the system being counted. The resulting score will increase or decrease the Unadjusted Function Point count by 35%. This calculation provides us with the Adjusted Function Point count.

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