Ten Techniques for Estimating Work While Planning Project

Sunday, November 13, 2016, 6:00 AM | Leave Comment

Estimating work is a key element of project planning.

The following techniques can be used at the project level or activity level, or for any sized work in-between.

For instance, an expert opinion can be used to help guide the estimate for an entire project or a specific piece of work.

High-level estimating techniques are typically referred to as top-down.

Top-down techniques include prior history, analogy and ratio. Estimates that rely on a more thorough breakdown of the work are called bottom-up.

The Work Breakdown Structure (WBS) technique, for example, is a bottom-up technique.

  • Five Top-down estimates

    Top-down estimates are typically quicker and easier to put together, since you are estimating at the overall project level. Therefore, they can also be less precise.

    1. Previous History

      If your organization keeps track of actual effort hours and costs from previous projects, you may have information that will help you estimate similar new work.

      In this method, the characteristics of the prior work, along with the actual effort hours and cost, are saved so that the information can be leveraged for future projects.

    2. Analogy

      Even if you do not keep actual effort hours from previous projects, you may still be able to leverage previous work.

      Analogy means that you find similar projects, even if the project team did not collect actual effort hours worked.

      For example, let’s say a prior project was estimated to take six months and 2000 hours to complete.

      If the project actually was completed in six months, there is a good likelihood that the project also took approximately 2000 hours of effort.

    3. Ratio

      Ratio is similar to analogy except that you have some basis for comparing work that has similar characteristics, but on a larger or smaller scale. For instance, you may find that the effort required to complete an office move for the Miami office was 500 hours and that one of the big drivers for the effort is the number of people at the office.

      If there are twice as many people in the Chicago office, you may be able to conclude the work may take 1000 hours there.

    4. Expert Opinion

      In many cases you may need to go to an internal or external expert to get help estimating the work.

      For instance, if this is the first time you have used a new technology, you may need the help of an outside research firm to provide estimating information.

      Many times these estimates are based on what other companies in the industry are experiencing.

      You may also have an internal expert who can help. Although this may be your first time estimating a certain piece of work, perhaps someone else has done it many times.

    5. Delphi

      The Delphi technique is similar to expert opinion, except that you use multiple experts and try to reach an estimating consensus among them.

  • Five Bottom-up estimates

    Bottom-up estimating is a project management technique in which the project team who are going to do the work participate in the estimating process. Therefore, they can also be more precise.

    1. Work Breakdown Structure

      The work breakdown structure allows you to more easily estimate the work. You may look at a large piece of work and have difficulty estimating the effort required.

      However, as the work is broken into smaller pieces, the individual components will be easier to estimate.

      When you have estimated all the pieces, add them all together for the overall effort.

      If you have time to create a good WBS, you usually end up with a good estimate of the overall effort required.

    2. PERT (Program Evaluation and Review Technique)

      PERT is an estimating technique that used a weighted average of three numbers to come up with a final estimate.

      Using the PERT technique, if you are asked to estimate the effort required to complete an activity, you would start with three estimates – the most pessimistic (P) case when everything goes wrong, the most optimistic (O) case when everything goes right, and the most likely (M) case given normal problems and opportunities.

      The resulting PERT estimate is (O + 4M + P)/6. For example, if the most likely estimate is 10 hours, the optimistic estimate is 6 hours and the pessimistic estimate is 26 hours.

      The PERT estimate is (6 + 4(10) + 26)/6. The answer is 72/6, or 12 hours. Notice that the number was pulled a little toward the pessimistic estimate, but not by much, since the result is still weighted heavily toward the most likely value.

    3. Parametric Modeling

      In this technique, a pattern must exist in the work that allows you to use an algorithm to drive the overall estimate.

      For instance, if you know that you can build one mile of flat one-lane highway for one million dollars, you should be able to easily calculate an estimate for ten miles of flat four-lane highway (40 million dollars).

    4. Timeboxing

      This is a way to set one of the estimates to be within a fixed schedule, budget or scope. Usually when you apply the timebox technique you are forcing the project to be completed by a certain deadline. You then have to focus on the cost and scope aspects of the triple constraint so that the timebox date can be met.

    5. Function Points (IT development projects)

      Many industries have specialized estimating models that are customized for their projects.

      Some IT development organizations use function points as a means to provide meaningful estimates of the work required to complete a systems development project.

      Function points provide a mechanism to determine the relative complexity of an application. The complexity can be expressed as a count of function points.

      In this way, an application of 1000 function points is generally ten times larger and more complex than an application of 100 function points.

Every technique will not work in every situation. Knowing the best estimating techniques to apply given the situation will help you provide a more accurate final estimate.

If possible, you should utilize multiple estimating techniques for a project, especially if you are using a quick top-down technique. You will have more confidence in your estimate if you use two or more techniques to arrive at similar estimates.

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This column is © copyright to www.Method123.com and originally appeared in their weekly project management tip newsletter.

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