Techniques to help do the maths
Before any project kicks off you need to know how long it will take and what it will cost.
There are a number of ways to work this out, and estimating is something that all project managers will get involved with at some point in their careers. And as experienced project managers will tell you, the impact of getting your estimates wrong really does warrant the time it takes to get your estimates right!
You can’t estimate your entire project alone as you’re not an expert in everything. You can co-ordinate the estimating activity and add your opinions, but this is definitely an area where you should rely on the expertise of your project team.
Here are three options for working together to prepare your project estimates effectively:
1. Parametric estimating
Parametric estimating is used to calculate the cost of your project and the length of tasks. 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.
Let’s say that it takes me half an hour to make a pizza. In 4 hours I can make 8 pizzas. If I need to make 16 pizzas for a project team celebration, then I’ll need to set aside 8 hours. All you do is work out the number of units required and how long it takes to do one, then multiply one by the other to give you the overall task duration.
You can do it for budgeting too. If one pizza costs £3 to make then I can feed my team with 16 pizzas at a cost of £48, assuming that they all have the same toppings.
2. Bottom up estimating
Bottom up estimating is another easy technique to use. It works best when you’ve got lots of input from team experts as you break down the project into the smallest possible chunks, cost them up and then add all the costs together.
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.
It can be time consuming to get estimates from all the relevant people and to put them all together but it does minimize risk. It’s easier to estimate the cost or duration of a small piece of work that you know well than it is to estimate larger chunks.
Even if someone does make a mistake and get their portion of the estimate wrong, it will only affect one task. It’s unlikely to mean that your project is massively out, especially if you add in the appropriate contingency to the budget or schedule.
3. Analogous estimating
Finally, you could use analogous estimates. This involves taking data from a similar project and basing your estimates on that.
It’s handy when you have experience of doing the work before or when you are working with experts who do their tasks regularly. However, you do have to have access to that historical data and it’s better to take it from project schedules and budgets than to rely on people’s memories.
Use the PMO’s records to check 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 are trying to do today.
Check everything out with your team to be sure that you are using data that is as relevant as possible, or tweaking it if not.
None of these techniques are rocket science and you have probably used all of them at some point, perhaps without realising.
Every project is different so it’s best to pick an estimating technique that works for your project and team. In fact, a good approach is to use a mix of techniques – don’t feel that you have to stick to bottom up estimating for all your project tasks, for example, when actually it would be better to use analogous estimating for some of it as well.
A blend of techniques will help you get the best, most accurate result and you’ll be able to plan your project more effectively because of it.
For more information on Scheduling and Cost Control, take a look at the course overview