There
are two primary reasons estimating should be performed (or approved) by the
person doing the work: more accurate estimates and higher commitment levels to
the project. The use of buffers and historical information when developing work
effort estimates is a common, everyday practice. The following table lists key
estimating techniques and summarizes the key characteristics of each:
For each estimating technique (approach), there are one or more
methods that can be leveraged. The table shown below lists these methods and
summarizes the key characteristics of each:
As
with all other planning activities, work estimates are refined and improved as
more is learned about the project. At a minimum, each project (or project
phase) should be estimated three times. Each estimate provides a greater degree
of accuracy. To better understand this concept and to better educate others in
your organization, see the three levels of estimate accuracy recognized by PMI
in the figure below:
Now
let’s review the estimating best practices of successful organizations and
projects:
1.
Estimating
should be based on the work breakdown detailed in the WBS.
2.
Estimating
should be performed (or approved) by the person doing the work.
3.
The
work estimates for lower level WBS items should be less than the standard
reporting period for the project (typically one or two weeks).
4.
The
work estimate is not less than this, it is a good sign the task needs further
decomposition.
5.
Estimating
should be based on historical information and expert judgment.
6.
Estimates
are influenced by the capabilities of the resources (human and materials)
allocated to the activity.
7.
Estimates
are influenced by the known project risks and should be adjusted accordingly to
account for those risks.
8. All bases and assumptions used in estimating should be
documented in the project plan.
9. When asking an SME for an activity estimate, make sure to
provide the following whenever possible:
·
Project definition
document (context, approach, assumptions, and constraints)
·
WBS
·
Applicable
standards, quality levels, and completion criteria for the work package
10.
When asking
an SME for an activity estimate, make sure to ask for the following at a minimum:
•
An estimate
range (not just a single value)
•
Factors
driving that range
•
Assumed
resource level, skills, and productivity
•
Assumed
quality level and acceptable completion criteria
11.
Estimates
should be given in specific time ranges.
12.
For managing
high-risk projects, the following estimating techniques are recommended:
•
Use of phased
and bottom-up estimating techniques
•
Use of the
average weight and team consensus estimating methods
13.
For high-risk
projects where the organization lacks significant previous experience or
process knowledge, consider outsourcing the planning phase to an outside firm
as an assessment engagement.
14.
A project’s
time and cost estimates should be based on project needs and not dictated by
senior management. The project manager should work with senior management to
reconcile any differences.
15.
Reserve time
(contingency and buffer) should be added to either the project schedule or to
individual activity duration estimates to account for the level of risk and any
uncertainty that exists.
16.
Historical
information is vital to improving estimates. If you don’t measure actual
performance, you will not have the feedback to improve estimating accuracy.
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