Book Review: Cost-Effectiveness Analysis: A Systems Engineering Perspective (Kaczmarek Review)

By Dr. Howard Eisner – INCOSE Fellow

1st Ed. Nov-2021

Reviewed by Mark Kaczmarek, ASEP

This latest book by Dr. Eisner spans the 5+ decades of his experience: 30 years in business as president or working for companies, and 24 years in academia at GWU – George Washington University. This is the 12th book he has written, and he is a fellow of IEEE, INCOSE, and the New York Academy of Sciences.

Dr. Eisner starts us off with three different groups that came out of the 1960’s, some 60 years ago. So, this is not new by any means. Secretary of Defense Robert McNamara pulled together these three groups:

1)      WSEIAC – Weapon System Effectiveness Industry Advisory Council. This was a Department of Defense (DoD) council that was broken up into five task groups, each one producing a report and a final 8 recommendations. The report defined weapon systems effectiveness as the product of A, D, and C, where:

A – Availability

D – Dependability

C – Capability

2)      Whiz Kids – McNamara gathered his top 10 DoD associates to be the new era of quantitative analysis, with new respect for and knee-deep systems analysis, econometrics, cost-effectiveness analysis and PPBS (Planning, Programming and Budgeting System) methodologies.

3)      The Research And Development (RAND) Project and Corporation – The Project started post-WWII and the PPBS methodology was used heavily by McNamara during the 1960s for weapon systems acquisition and development.

Next are the basics. Using prior systems developed, a plot of cost and MOEs (Measures Of Effectiveness) will generate three distinct regions:

1)      A Linear region

2)      A knee-of-the-curve region

3)      A high-effectiveness region

A weighting system is used for each system being developed and this helps to break down for each proposed system solution MOEs.

There is a chapter discussing cost-effectiveness and systems engineering including discussion about an approach to architecting and AoA (Analysis of Alternatives).

After explaining these concepts, he shows business, military and even everyday (household) examples of applying cost effective analysis.

If you ask yourself – where can one go to learn more? He presents 5 different graduate level coursework that delve into this area of learning:

1)      UMD - University of Maryland

2)      Harvard – The Harvard Center for health Decision Science

3)      GWU – The George Washington University – where Dr. Eisner taught at but did not mention if he helped develop the coursework and/or taught the course.

4)      University of Chicago

5)      Pardee RAND Graduate School

For those involved with software, he covers COCOMO I and COCOMO II tying in the fact that many systems being developed are software intensive.

I do recommend this book for those starting out about learning Cost-Effectiveness Analysis. It is a fairly quick read, under 100 pages, and has references for each chapter so the reader can find details for a particular topic.

Additionally, he is speaking at the Chesapeake Chapter (CC) monthly event. If you are unable to attend, the video of the presentation will be posted on the CC’s web site soon afterwards.

The CC may be able to engage Dr. Eisner in holding a half or full day tutorial on this topic.