Project Management Estimates
A good Project Manager delivers close to both the published schedule and budget baselines. To get a good baseline we need a good project plan. A good project plan requires good estimates. In Project Management there are several things that need to be estimated. Work, Duration, and Cost. So how do we get good Project Management Estimates?
Types of Estimates
Firstly, there are different types of estimates. A good Project Manager is clear what sort of estimate is expected when asking for estimates.
- Ball Park or Order of Magnitude: These could be within 100%. That means the actual figure could be up to twice the estimate
- Budget Estimate: These will be more accurate, perhaps within 30-50%
- Definitive Estimate: These might be within 10% or so of the actual figure
During the Project Initiation stage our estimates might concern the whole project. During the Project Planning phase we are estimating individual activity effort (work), durations, or costs.
Secondly, there are several approaches to estimating. These apply to both Task and Project estimates:
- Analogous Estimating: Or Comparative Estimating compares the Task/Project to a similar historical Task/Project that has already been completed
- Parametric Estimating: This is where a calculation could be used based on a quantity of some sort. It might be that the project or activity estimates can be calculated based on the size, area, or quantity of some aspect of the project.
At a project level, there are two alternative approaches:
- Top Down: Where estimates are made for each of the various work packages. This might be used for a Ball-Park estimate
- Bottom Up: Where estimates are made for each task, then rolled up to each work package, and then for the whole project. This would provide a definitive estimate for the whole project.
Whichever method is used, make sure that the Project Team understand the approach.
How to Get Good Project Management Estimates
The Project Manager is dealing with people when obtaining any estimate. Here are my tips for getting good Project Management Estimates:
- Be clear what it is you are asking for, Work (Effort) or Duration, when asking for times
- Give people time to prepare a good estimate. If you want accurate estimates in your plan, expect that people will need some time to check their estimates. Perhaps adding it to a Project Meeting agenda will give the project team notice to help preparation.
- Ask more than once. For tasks that are a little uncertain, check by asking several times over a period of time. A great variation (or increasing estimates) will indicate more uncertainty
- How do you know? If you do not know the task owner, it is acceptable to ask how they arrived at the estimates. Perhaps they have done the tasks many times, find out if they are skilled. In addition, if they ‘Guessed’ the estimate, they might even own up!
- Break it Down: If there is difficulty in arriving at an estimate try breaking the task down into more detail
- Three Point Estimation. Use PERT analysis to ask for the Pessimistic, Most Likely, and Optimistic estimates
- Don’t punish or blame a poor estimate in the Project Review. Above all, poor estimates are a learning experience for the whole team. Punishing poor estimates will encourage team members to ‘pad’ future estimates!
Good estimates are required for a good schedule and budget. Pay attention to how the estimates are generated.
Video Clip on Project Management Estimates
This video clip is a good reminder of the difference between work and duration. It also covered different task types and work profiles. Estimates are covered from 10 minutes 38 seconds.
Finally, record estimates for the Project Review. This is done by creating a baseline of the project. The schedule or budget can then be altered as change occurs, but the original estimates are never forgotten.
When you attend Project Management Training, you are not given a crystal ball. Project Managers cannot foretell the future. However, good estimates can lead to good plans, and help to predict what the future might be.