Douglas Hofstadter’s law of programming simply states that, “It always takes longer than you think, even when you take into account Hofstadter’s law.” While Hofstadter was writing about programming when he introduced his adage, it may also apply to the estimates we do as project managers.
If your experience has been anything like mine, you’ve probably missed one or more of your best estimates sometime in your career. For me, it hasn’t seemed to matter whether it was a budget, a schedule or the number of resources needed to complete a project, I’ve missed them all at one time or another. In fact, my wife even doubles my cost estimates when we do projects around the house. Imagine that!
So, how do you estimate your projects? Do you take your best estimate, double it then add some more? Do you triple your guesstimate or do you have some other magic formula that you use to fine tune your approximations? Or do you just call it a best guess and move on?
I still miss an occasional estimate, but over time I’ve learned some estimating techniques that have improved the accuracy of my estimates. It’s not rocket science, but following a structured methodology may improve your estimates as well. Here are seven key points to remember when estimating:
Finally, a strong change management system will discourage gold-plating by team members and prevent budget busting scope changes without adequate review of the impacts to the schedule, budget or quality of the deliverables. The change management system should provide ample opportunity to evaluate each proposed change and require approvals from the project sponsors before implementation.
The best estimates begin with a detailed scope statement that limits the scope of the project and defines the project objectives. By putting a strong fence around the project, you will be limiting your exposure to creeping expectations and pressure from stakeholders to make unplanned changes to the project. Consider using a Not-In-Scope statement to further limit the project scope.
The work breakdown structure is the key to accurate estimates because the WBS should contain all the work, and only the work required to accomplish the project objectives. Your staffing, schedule, and budget estimates will be the summation of all the project activities contained in the work breakdown structure. Don’t forget to include supporting activities including administration, training, meetings and accommodations for such things as travel or other related activities. Use a WBS dictionary to describe project activities in terms that will be easily understood.
Use the 8/80 hour rule to break down the individual WBS line items into smaller and more manageable work packages. The 8/80 hour rule is actually a rule of thumb that says no task should be shorter than 8 hours or longer than 80 hours. While this rule of thumb will not apply to all situations, it certainly does reinforce the point to break down the project into smaller and manageable work packages.
Use progressive elaboration planning techniques to continuously modify the project details as new information is made available.
Plan for quality and establish suitable standards to measure the quality of the project deliverables.
Conduct a risk evaluation to determine potential risks to the project. Establish a risk register and budget based on the impact and probability of the managed risks. Revisit the risk management plan frequently throughout the project.