How Accurate Are Your Project Estimates?
By Adele Sommers
Do you excel at predicting the time,
funding, and resources
your projects will require?
Whether your organization decides
to design a new system, launch a new
Web site, or overhaul your company's
policies, these endeavors will require people, schedules, funding, resources,
requirements, testing, revising, implementation, evaluation, and many other elements.
You may have seen this phenomenon already: projects are risk magnets. Why is that?
The possible reasons include the fact that projects typically involve many dynamic
aspects, yet they're often constrained by finite conditions. These contradictory
forces make it extremely difficult to determine with pinpoint accuracy the time and
effort required, and set the stage for plenty of budget and schedule "collisions" during
the life of the project.
When my clients or colleagues invariably ask, "How long do you think this effort
might take?" I usually experience a knee-jerk reaction. Instinctively, a part of my brain
that once excelled at solving math problems on timed quizzes goes into overdrive. "I
know the answer!" it screams.
Yet, unless that project or task is something I've performed many times before -- under
very similar conditions each time, and with good records of my actual hours spent --
providing an accurate estimate can be quite elusive. As I strive to imagine all of the
stages and steps of a process, as well as fathom the unknown variables or things that
could go awry, it's no wonder that I hardly ever guess 100% correctly, particularly for
new endeavors.
Estimating Techniques Can Help Manage Risks
Did you know that estimating is an invaluable tool for anticipating and managing
these project uncertainties?
Whenever we can determine our schedule and budget requirements with reasonable
accuracy, it reduces the risk of running out of time, resources, and funding during a
project.
Yet with all of the emphasis we place on creating accurate estimates and bids, we still
seem to have difficulty developing realistic predictions of our time and effort. If we
look carefully at the evidence, I believe we'll find three basic, underlying clues to the
reasons for our challenges with estimating:
-- The presence of hidden or unknown variables that are difficult or impossible to
anticipate, and sometimes even more difficult to resolve.
-- Our often-idealistic views of our own capabilities. We tend to imagine that we can
accomplish much more than is possible in the time allocated.
-- A strong human desire to please other people by telling them what they want to
hear. (After all, who wants to be the bearer of bad news?)
12 Tips for Increasing Estimating Accuracy
To remedy these shortcomings, below are 12 ideas for boosting the accuracy of your
estimates:
1. Maintain an ongoing "actual hours" database of the recorded time spent on each
aspect of your projects. Use the data to help estimate future projects and identify the
historically accurate buffer time needed to realistically perform the work.
2. Create and use planning documents, such as specifications and project plans.
3. Perform a detailed task analysis of the work to be performed.
4. Use a "complexity factor" as a multiplier to determine whether a pending project is
more or less complex than a previous one.
5. Use more than one method to arrive at an estimate, and look for a midpoint among
all of them.
6. Document caveats, constraints, and assumptions in your estimates to bound the
conditions under which your estimates would be meaningful. (Anything that occurs
outside of those constraints would be considered out of scope.)
7. If the proposed budget or schedule seems inadequate to do the work, propose
adjusting upward or downward one or more of the four project scoping criteria: Cost,
schedule, quality, and features.
8. Consider simpler or more efficient ways to organize and perform the work.
9. Plan and estimate the project rollout from the very beginning so that the rollout
won't become a chaotic scramble at the end. For example, propose using a pilot
program or a phased implementation.
10. In really nebulous situations, consider a phase-based approach, where the first
phase focuses primarily on requirements gathering and estimating.
11. Develop contingency plans by prioritizing the deliverables right from the start into
"must-have" and "nice-to-have" categories.
12. Refer to your lessons-learned database for "20:20 foresight" on new projects, and
incorporate your best practices into future estimates.
In conclusion, by using a set of proactive estimating techniques to scope, plan, and
constrain your project conditions, you can dramatically improve your estimating
practices, reduce and mitigate risks, and greatly increase your project success rate!
About the Author: Adele Sommers, Ph.D. is the author of the award-winning "Straight
Talk on Boosting Business Performance" program. She helps people "discover and
recover" the profits their businesses may be losing every day through overlooked
performance potential. To sign up for more free tips, visit her site at Learn Share
Prosper
By Adele Sommers
Do you excel at predicting the time,
funding, and resources
your projects will require?
Whether your organization decides
to design a new system, launch a new
Web site, or overhaul your company's
policies, these endeavors will require people, schedules, funding, resources,
requirements, testing, revising, implementation, evaluation, and many other elements.
You may have seen this phenomenon already: projects are risk magnets. Why is that?
The possible reasons include the fact that projects typically involve many dynamic
aspects, yet they're often constrained by finite conditions. These contradictory
forces make it extremely difficult to determine with pinpoint accuracy the time and
effort required, and set the stage for plenty of budget and schedule "collisions" during
the life of the project.
When my clients or colleagues invariably ask, "How long do you think this effort
might take?" I usually experience a knee-jerk reaction. Instinctively, a part of my brain
that once excelled at solving math problems on timed quizzes goes into overdrive. "I
know the answer!" it screams.
Yet, unless that project or task is something I've performed many times before -- under
very similar conditions each time, and with good records of my actual hours spent --
providing an accurate estimate can be quite elusive. As I strive to imagine all of the
stages and steps of a process, as well as fathom the unknown variables or things that
could go awry, it's no wonder that I hardly ever guess 100% correctly, particularly for
new endeavors.
Estimating Techniques Can Help Manage Risks
Did you know that estimating is an invaluable tool for anticipating and managing
these project uncertainties?
Whenever we can determine our schedule and budget requirements with reasonable
accuracy, it reduces the risk of running out of time, resources, and funding during a
project.
Yet with all of the emphasis we place on creating accurate estimates and bids, we still
seem to have difficulty developing realistic predictions of our time and effort. If we
look carefully at the evidence, I believe we'll find three basic, underlying clues to the
reasons for our challenges with estimating:
-- The presence of hidden or unknown variables that are difficult or impossible to
anticipate, and sometimes even more difficult to resolve.
-- Our often-idealistic views of our own capabilities. We tend to imagine that we can
accomplish much more than is possible in the time allocated.
-- A strong human desire to please other people by telling them what they want to
hear. (After all, who wants to be the bearer of bad news?)
12 Tips for Increasing Estimating Accuracy
To remedy these shortcomings, below are 12 ideas for boosting the accuracy of your
estimates:
1. Maintain an ongoing "actual hours" database of the recorded time spent on each
aspect of your projects. Use the data to help estimate future projects and identify the
historically accurate buffer time needed to realistically perform the work.
2. Create and use planning documents, such as specifications and project plans.
3. Perform a detailed task analysis of the work to be performed.
4. Use a "complexity factor" as a multiplier to determine whether a pending project is
more or less complex than a previous one.
5. Use more than one method to arrive at an estimate, and look for a midpoint among
all of them.
6. Document caveats, constraints, and assumptions in your estimates to bound the
conditions under which your estimates would be meaningful. (Anything that occurs
outside of those constraints would be considered out of scope.)
7. If the proposed budget or schedule seems inadequate to do the work, propose
adjusting upward or downward one or more of the four project scoping criteria: Cost,
schedule, quality, and features.
8. Consider simpler or more efficient ways to organize and perform the work.
9. Plan and estimate the project rollout from the very beginning so that the rollout
won't become a chaotic scramble at the end. For example, propose using a pilot
program or a phased implementation.
10. In really nebulous situations, consider a phase-based approach, where the first
phase focuses primarily on requirements gathering and estimating.
11. Develop contingency plans by prioritizing the deliverables right from the start into
"must-have" and "nice-to-have" categories.
12. Refer to your lessons-learned database for "20:20 foresight" on new projects, and
incorporate your best practices into future estimates.
In conclusion, by using a set of proactive estimating techniques to scope, plan, and
constrain your project conditions, you can dramatically improve your estimating
practices, reduce and mitigate risks, and greatly increase your project success rate!
About the Author: Adele Sommers, Ph.D. is the author of the award-winning "Straight
Talk on Boosting Business Performance" program. She helps people "discover and
recover" the profits their businesses may be losing every day through overlooked
performance potential. To sign up for more free tips, visit her site at Learn Share
Prosper
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