Have you ever had an executive ask how long a project will take before the project started? Yeah, I've been there too.
When asked, PAUSE. Be careful about how you respond.
Why? Because your credibility is at hand. Let's talk about the challenges of schedule estimates and three estimating techniques that can help us do a better job with our estimates. Lastly, we'll look at how to respond to future requests for estimates.
Challenges With Schedule Estimates
What happens if someone estimates a task to take 10 days when it should only take 5 days? Work expands to fill the time alloted.
Conversely, what happens when someone estimates a task to take 5 days when it should take 10? People rush their work. The results are poor quality, rework, higher costs, and adverse impacts on the schedule.
During and after each project, compare your actuals to your estimates. Do you see a pattern where certain team members estimate too high or too low? Consider how you can work with these individuals to improve estimates for future projects.
3 Estimating Techniques
Each estimating technique has its strengths and weaknesses. Project managers should understand and apply each estimating technique appropriately.
- 1Top-Down Estimate (alias Analogous Estimate). Typically, the project manager looks for past projects similar to the project at-hand. If the previous projects took six to eight months, we could estimate this project at a similar duration with appropriate adjustments (i.e., unique risks). Use this technique during the project initiation or early planning. This technique is relatively quick but not as accurate as the Bottom-Up Estimating technique.
- 2Bottom-Up Estimate (alias Detailed Estimate). This technique involves estimating work at a task level. The detailed task estimates are rolled up to higher levels to provide a summary estimates.Use this technique after completing your Work Breakdown Structure. This technique takes longer but provides greater accuracy than the Top-Down Estimating technique.
- 3Three-Point Estimating (alias PERT). This technique requires the estimator to provide three estimates: 1) pessimistic estimate, 2) optimistic estimate, and 3) most-likely estimate. Using a weighted average formula, you calculate the expected value as follows: Expected = ((Pessimistic + 4 (Most Likely) + Optimistic) / 6). Use this technique when estimating work with which you don’t have prior experience. This technique will result in a more accurate estimate than a single point estimate.
Who Should Estimate the Activities?
When possible, have the person doing the work provide the estimates. They have the experience and expert judgment to provide the most accurate estimates. Project managers should work collaboratively with team members to complete estimates and build the schedule.
How To Respond To Early Requests for Estimates
When an executive asks for an estimate early in a project, ask for a few days to complete the estimates. Review past projects to find similar projects. Complete a Top-Down Estimate and provide the estimate in a range such as 5-8 months.
Let management and your stakeholders know that you will provide a revised estimate with a higher confidence level after project planning. The team can complete a Bottom-Up Estimate.
If the project is unlike previous projects, utilize the Three-Point Estimate.
Finally, create your schedule baselines. Compare your actual cost and hours to the baselines. With experience, good data, and consistent reviews, you will get better and better with your estimates.
Question: In your experience, what are the biggest mistakes made by project managers in estimating projects? What can they do to improve?
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