Projects require time, scope and cost estimates. Before you can start anything, you have to know what it will take.
Project estimations are a critical component to any project. It is a skill that all project managers need to acquire at some point in their careers. As any veteran project manager will tell you, taking time in the beginning to get it right will save you a lot of time and heartache of getting it wrong!
To make a proper estimate, you will need support from your project team. You can’t possibly know everything. Rely on those who know more than you.
Here are three suggestions for preparing your project estimates effectively:
1. Parametric estimating
Parametric estimating is used to calculate both cost and time. It deterimes the project budget in terms of time and money. It works because budget and duration are linked and scalable. In fact, even if you have never heard of it, you probably already use it.
Assume it takes 30 minutes to bake a pie. In 4 hours I can make 8 pies. If I need to make 16 pies for a project team bake-off, then I’ll need to set aside 8 hours. In this scenario, you need to determine the number of units required and how long it takes to do one, then multiply one by the number of units to identify the overall task duration.
The same applies for budgeting too. If one pie costs $4 to make, then my team can be fed 16 pies at a cost of $64, assuming that they all have the same ingredients.
2. Bottom up estimating
Bottom up estimating is based on breaking down a project into bite-sized pieces. It is best applied when you’ve got lots of input from team experts who identify the cost of each piece. Do the math by adding them up and you have your project estimate at the ready.
Subject matter experts are likely to have a great insight into how much time or money something will take to do, so use their expertise to prepare your estimates.
Although it can be time-consuming to gather exeveryone’s input and estimates, it does minimize risk. It’s easier to estimate the cost or duration of a small piece of work at the micro-level than to estimate at the macro-level.
Even if someone makes an error and gets their bit of the estimate wrong, it will only affect one task instead oft he entire project. Adding the appropriate contigency to the budget or schedule will ensure your estimate remains on point.
3. Analogous estimating
The final suggestion involves analogous estimates. This approach requires taking a blueprint from another project and overlaying it onto your new one.
It’s helpful in particular if you and other experts have had experience in the area of work already. It is better to rely on the archives than on people’s memories. So pull that historical data as the framework for your current project’s estimate.
Rely on the PMO’s records to determine how long tasks took or how much they cost and then validate that with your own professional judgement based on how close a match those tasks are with what you would like to attempt now. Cross-check with your team to be ensure you are including relevant data.
None of the above techniques is exceptionally difficult. Most likely, you have already used each oft hem at some point in your career without even knowing it.
Base your approach on the appropriate project. Because every project is different , select the estimating technique that matches your project, style and team preferences. You can even use a blend of techniques. Perhaps you will want to adhere to bottom up estimating for some, but not all, of your project tasks because it may be better to use analogous estimating for some of it as well.
A tailored blend of techniques will help you get the best, most accurate result, leading you to plan your project more effectively because of it.
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