The Good, The Bad & The Ugly: Communicating Estimates To Your Customers

Mark Mullaly is president of Interthink Consulting Incorporated, an organizational development and change firm specializing in the creation of effective organizational project management solutions. Since 1990, it has worked with companies throughout North America to develop, enhance and implement effective project management tools, processes, structures and capabilities. Mark was most recently co-lead investigator of the Value of Project Management research project sponsored by PMI. You can read more of his writing at markmullaly.com.

  Estimating   Schedule Management   Scheduling   Work Breakdown Structures (WBS)  

So your customer wants to know how much the project is going to cost. And you're quaking in your boots because you know--even though you've built the WBS, produced a bottom-up estimate and validated it against a couple of other projects that were sort of similar to this one--that something is eventually going to come along that will make that estimate look about as accurate as trying to count gumballs in a jar.

IT project managers are generally forced into committing to estimates inordinately early in the project. If we were to build a house, we wouldn't get a final estimate on the cost until after the architect finished the design and produced the construction documents. By way of comparison, we would have at this point fully and completely defined the requirements, reviewed the conceptual plans and the architect would have figured out exactly and precisely how to build it. All that would be left is actually building it.

How many of us have actually had the luxury of waiting until the end of detailed design to provide an estimate on the project cost? The reality is no sponsor will--or can--wait that long. If we're doing our job right, the project would have expended somewhere north of half of the budget by the time a detailed design for an application project is completed. This is way too late in the cycle to decide we can't afford to do the project.

Unfortunately, …

Please log in or sign up below to read the rest of the article.