The Only Guide You Need

The weather is the office call. The heat wave is a good reason to work long hours – at least we have air conditioning that makes life bearable. The upper temperatures are colder subjects: Is it 34 degrees outside or 33 degrees outside? To be honest, it’s too hot, but it made me realize one thing: I’m not good at evaluating.

In fact, I always knew I was not good at evaluating. I can not know how hot it is other than cold, gentle or hot. I can not tell you how far it is between here and Birmingham, or the dimensions of my front room. I do not know how many people are taller than me or taller than me. And since I’m 5ft 2 it puts most people in the ‘taller than me’ category. On the subject of people, I too am junk with the ages.

The only thing I can appreciate is time.

And as a project manager, I’ll take it.

Appreciating time allows me to participate in all the usual day-to-day conversations in which I am expected to make an informed contribution: How hot? I’ll be too hot in 5 minutes. how far is it? I can go there in 15 minutes. Admittedly it does not help too much for height and age.

However, it helps in projects. An intelligent guess about project tasks is a good skill to have.

In this article I will share techniques for estimating schedules and budgets: the kind of things we need to know in order to carry out projects.

Why evaluate?

As project managers, there are two reasons why we value:

  • First, align expectations between stakeholders so that everyone has a common understanding of what to expect and is aware of the level of uncertainty in numbers
  • Second, make better and more informed decisions given what we know about project performance.

We create estimates mainly for Project budgets And project schedules. You should be able to calculate roughly how many things are going to cost and how long it will take.

There are many different ways to do this, from a simple guessing method (based on your professional judgment, of course) to statistical models.

In my experience, most project managers, especially those leading business change, new technology or transformation projects opt for techniques that are between the two ends. We would not say we are guessing, but neither would we continue with a statistical model.

Accurate assessments make the difference whether your stakeholders are satisfied with the project performance or if you are constantly stressed. They help you in resource management because you can request the amount of people needed to get the job done.

Assignment Evaluation: The Basics

Let’s start with the basics. In a new project you need to ask a few simple questions.

What needs to happen? How long will each task take? What will it cost? The answers to these questions will allow you to put together a timeline and budget for the project.

Try to use assessments gathered from the people who will actually do the job. If you can not get them, or someone with a profile or background similar to them, make an intelligent and conservative guess. Find out if a similar project has been done in the past. Can you talk to the manager? How long did it take for this piece to complete?

Be realistic about the tasks to be performed and the length of time each task will take. Having a realistic timeline – your schedule – is critical to the question of whether your project seems to be ultimately successful.

A word of caution: This is a great balance between investing too much time in planning and estimating at this point and meeting your stakeholders’ expectations: you can not wait forever. Aim for the best estimate of end date or cost, and tell them that is all it is until you have a chance to plan in more detail. The more accurate you can be now the easier it will be later, as the end date should not move too much. Budgets seem to be much more flexible!

Don’t be sucked into the trap of securing an end date before you actually sort out the tasks involved, but if you get caught up in the hallway and asked when your project will end, you will come up with something with a lot of expectations. It is always easier to manage the communication around a project that delivers earlier than expected than one that arrives late!

We have now covered the essence of what is an estimate for project scheduling and budgeting, let’s look at Estimation techniques.

5 Project Evaluation Techniques

Here are five techniques for creating a project estimate.

1. Expert judgment

Expert judgment is the ‘evaluation’ of the estimation techniques. In other words, you trust the team members to bring a good enough calculation for planning purposes, based on their professional opinion.

I use this technique a lot because I trust my subject matter experts and many times we do not have reliable information for any other type of estimate. This is a useful method if you have the right people.

Read more about the value of using subject matter experts.

2. PERT: Evaluation and review technique of a program

PERT is another evaluation option available to project managers. This is a formula that calculates the expected value, allowing for known uncertainty and following a Bell curve.

The downside is that the expected values ​​are not always reliable. (Another reason to like ranges.)

Here’s how to use it:

  • Identify a minimum, reasonable, and maximum outcome for the thing you are trying to evaluate (in money or in time)
  • Calculate the expected value using the PERT formula.

The PERT formula is:

(O + 4M + P) / 6 = estimates

When O is the optimistic estimate, M is the most likely estimate and P is the pessimistic estimate.

This is a variation of a three-point estimate that uses a weighted average. If you want to make a ‘basic’ assessment of three points, do not divide by 6. Just take the average of the best case, the worst case and the most reasonable values.

Read more about PERT.

3. Analog estimate

An analog estimate is where you use historical data to predict performance. This is another technique I use a lot because we can look back on other projects in the organization and see how long things took.

Reviewing previous project budgets is another good tip: Check to see the actual costs and how many projects have been used as an incident or an excessive expense, and use that as a basis for planning your costs.

The lessons learned are a good place to start looking for data to use for analog evaluations.

4. Top-down estimate

Top-down evaluation is not, in my experience, a particularly solid way of project planning. It tends to work best in situations where you got the answer: “This project must be completed by Christmas,” or, “You have a budget of £ 1 million to provide this work.”

Use the job breakdown structure to allocate budget or time to each part of the project. Divide the scope of the project by the amount you received as an estimate at the top level, and this is largely the answer to how long you can let things take or cost.

6 ways to predict projects

5. Parametric estimate

Parametric estimate Is a type of project evaluation suitable for time, resource and budget estimates.

It uses parameters (properties) to build estimates based on what you already know. This makes it a reliable way to evaluate as long as you have some data about what you value from similar projects.

A parametric estimate uses the statistical relationship between variables (time / cost / effort, etc.) to calculate how much time or money a task needs.

Here’s how to do it:

  • Define what you value, for example work units
  • See previous projects or industry databases for information on these units, for example how long they took on historical projects or how much they cost
  • Multiply work units by time / effort / effort required for each unit.

For example, if it takes one person 3 hours to paint a wall, it will take 2 people 3 hours to paint 2 walls.

While you are evaluating individual tasks, combine all the task estimates to give you the total cost or time for the job. This is how a bottom-up estimate works: it basically means starting at the bottom of the WBS and creating cost estimates (or time) for each element, then connecting them to get the total cost.

Read more about parametric estimation.

Which technique should you choose?

The good news is that you do not have to limit yourself. Consider the complexity of the project. Is it not worthy of an equally complex estimate? Use the most relevant technique for the task.

Some works may be fine with an expert judgment estimate. Other specific tasks it may be best to look at valid data from previous projects and build a detailed assessment out of it.

Mix and match and put together your overall budget or schedule using the most relevant techniques.

5 tips for better project evaluations

Create accurate estimates

The above techniques are good for creating prime numbers for your project budget or schedule, but what if you do not have all the information at first? That’s fine: start with high-level data and get more specific (and accurate) as the project progresses.

When do you estimate?

Evaluation usually occurs at the planning stage, but as the scope changes and you learn more about what the project provides, you will want to correct and refresh your evaluations as you go along.

In project management we do a lot of iteration, which is exactly what you do here. Start with a ROM estimate and repeat until you reach a final estimate. Let’s look at both in a little more detail.

ROM estimate

ROM represents a rough order of magnitude and is used to give you a A very high level view of potential project costs or duration.

This is useful when you need to provide an idea of ​​how long things will take (or budget) early on, before you have time to make real calculations. Accurate cost estimates, and a detailed plan with a reliable end date, will come later.

Think of ROM as a basketball figure, a rough estimate, presented as a range that represents the level of accuracy you can justify at the same time. Companies have different determinations as to what the ROM range should cover, so your finance team or PMO may be thinking about a particular range.

If your organization has no guidelines on how to represent a rough estimate of an order of magnitude, you can use the PMI definition. God PMBOK® Guide (The sixth edition, which we still use through Standards + for process details alongside the seventh edition) says that ROM estimate is in the range of -25% to + 75%.

Read more about ROM evaluations.

Final assessment

As you work on your estimation process and gather more details from past projects and experts, you will receive a final assessment: one on which you can hang your hat.

This is a realistic and achievable goal for what your project is going to spend or how long the work is going to take.

As you go through the project, you get more and more details that help polish the estimate. I’m still a fan of presenting estimates as ranges, even if you get to a point where you’re confident in numbers. You can use small ranges, like +/- 5% as a way to signal that nothing is fixed in the stone.

Your next steps

Although all the techniques in this article are ‘best practices’, I do not hesitate to instruct what you should use for your project. Construction projects are going to use a different project evaluation process than a small IT change.

If you have a project evaluation tool, use it. This is most likely a built-in feature of your project management software, for example the ability to add a cost estimate to each task. So the software rolls everything to give you the total cost of the project.

If you do not have a tool to do this, or you choose to evaluate another way, go with what you think would be the best option to give you the total costs or the total duration of the project work.

Snap to a later reading:

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