Want to create better estimates? Be curious. Curiosity enhances the project estimates made by experienced estimators who fully understand the scope of work to be performed and who have experience with the subject matter and technology. Satisfy your curiosity. Expect curious behavior. Create an environment which cultivates a curious attitude.
What makes for a good estimate?
I believe it is curiosity, and the ability to ask questions until everyone’s curiosity is satisfied. You can tell when your teams are curious because they will ask questions. Challenge your teams to provide meaningful estimates. If we had to present our estimate in five minutes and could not change it, in what way would your estimate or assumptions change? If you had to bet your job on the accuracy of your estimate, would anything change? Why?. Lack of curiosity can kill your project just as easily.
Understand basic estimating terminology.
Effort and duration play key roles in schedule estimates. If your schedule estimate is inaccurate, your cost estimate will be inaccurate as well.
Effort is usually provided in hours or days and is the amount of time a task would take if one person worked on that task 100 percent of the time for 24 hours a day, seven days a week.
Duration is that same amount of work placed in the context of your organization’s calendar, such as holidays and the length of the standard workday. Duration estimates take into consideration events specific to each resource, such as how many resources are assigned, the degree to which each resource is assigned, their vacations, and additional work commitments.
Sometimes, the estimate is based solely on duration, such as the lead time to a critical meeting, or paint drying, or the length of a scrum sprint. Basing an estimate on effort alone is valid only for those of us lucky enough to have absolutely no interruptions. The most comprehensive schedule estimate should consider both effort and duration.
Cost estimates address the resource’s rate over the life of the project as revealed by the schedule estimates. Cost estimates for resources should take into consideration internal staff, external staff, travel, and equipment.
What should you be curious about?
The need to develop estimates
If your team is always working on the most valuable result and is always ready to ship that result tomorrow, do you really need to develop an estimate?
Transform unknown and uncontrollable elements into known elements through the magic of documenting and communicating assumptions. A wise person knows what they do not know, and they also know when they have assumed. Evaluate your assumptions periodically to proactively identify where adjustments need to be made because an assumption proved false.
Align your estimates to constraints regarding existing or planned processes, quality expectations, risk, issues, results, scope (both product and project), staffing and other resources, schedule, and cost.
Estimates are not accurate if the project’s objective is not known or widely understood. In these situations, minimize the time spent developing estimates.
Keep the effort to develop estimates commensurate with the level of commitment to your project portfolio.
Include the person(s) doing the work and the person(s) responsible for project delivery. Are they expert resources trained in the processes the project will follow. Have they produced plans and estimates on a regular basis? Do they possess the judgment and knowledge gained from past experience on similar efforts? Consider each resource’s effectiveness and productivity, which can be shaped by organization’s culture, levels of motivation and initiative, size and complexity of the expected result in relation to their experience in that solution space, and the project portfolio’s environment. If you are not sure, ask them!
There are several online resources about various estimating techniques. I usually include an iterative element in my estimating approach:
- A high-level estimate that exercises the project approach and expected performance.
- A “good enough” estimate supporting a commitment based on logical resources possessing an average skill set.
- A solid estimate that will meet stakeholder expectations for managing project performance against schedule and cost based on named resources.
- A variance analysis whenever the team meets, to identify any trends that warrant the team’s attention
The difference between an estimate and a guess
You are guessing when you provide a number developed outside the context of the work to be done and the people doing the work, or when the relevant experience is lacking. Did you know that estimates created without relevant experience tend to be off by approximately 35 percent? Or that the initial plan usually contains only 60 percent of the work to be done?
When you are estimating, you are communicating. Estimates are accurate when they are clearly and openly communicated. The more you estimate projects of different sizes and complexity levels, the better your estimating skill becomes and the better your projects perform. If you share your estimates and corresponding actuals, other projects’ estimates may be more accurate. Who thought estimating could benefit so many people?
Jan Schiller, PMP, PSM1, FLMI, is a partner with Berkshire Consulting, LLC. She specializes in revealing the path from where an organization is to where they want to be. Over the past 30 years, Jan has been focused on linking strategy to results with project management in the financial services, investment, health, beverage, learning management and life sciences industries. She has helped her clients with the adoption of project management best practices; streamlining business processes; addressing regulations; achieving competitive advantage and much more. In addition to being quoted twice in PMNetwork Magazine, she’s also discussed how to develop a PMO Project’s scope statement on Phoenix Business RadioX (podcast). Jan writes about scope, portfolio management, methodologies, and PMO.