When you are trying to put estimates together, whether it’s for time or cost, it’s important to be as accurate as possible because the estimates form the basis of your plan. They also set the expectations of your stakeholders, so getting them right – or as close to ‘right’ as possible – makes for an easier project for everyone.
So, what things could affect your project estimates? Here are 5 things to look out for when putting your estimates together – whether it is you doing the estimating or someone on your team.
1. Optimism Bias
We are predisposed, most of us, to look on the bright side of things. How long will it take me to drive there? 20 minutes? Then you do it and realise it took 40.
Being positive is fine, but it’s not realistic most of the time in a project environment. We need to look out for where being overly optimistic, or even just a little bit optimistic, is going to have an implication for the project.
Manage it by: Have several people do the estimate and then take an average. PERT is also a good estimating technique to use if you are worried about estimating bias because it takes best and worst case scenarios into account.
2. Pessimism Bias
I don’t know if this is actually a thing, but it’s the opposite of people being too optimistic. Estimates are either deliberately padded with extra contingency or people are unrealistically negative about the amount of time it will take them to get the work done.
Manage it by: PERT again. If you don’t want to use that, then at least get the estimates peer reviewed so that any that are unrealistic can be weeded out.
The experience of the estimator makes a huge difference.
Manage it by: Finding people who are skilled at what they do to work on your estimates. If you can’t get estimates done by the most experienced people in the room, then again a technique like PERT will help average them out. Alternatively, look outside your immediate team or company for people who could help you estimate.
Have to do an estimate quickly? It’s not going to be very good because you won’t have had time to check out all the assumptions. Rushing makes for poor estimates.
Manage it by: Build enough time into the plan to do a decent job of estimating. If you absolutely have to have a quick turn around on estimates get your best people on it and make sure that the person asking for the estimate knows that it is of the ‘quick and dirty’ kind.
5. Incorrect Spec
If you estimate from a specification or set of requirements and then find out that these are wrong, you are necessarily going to be wrong in your estimate too. Whether it’s because the users want more put in or some elements taken out, you’ll have to adjust your estimates as well.
Manage it by: It would be lovely to say that you must insist on fully-thought out estimates every single time but I know that isn’t realistic. You can only do your best and have a great change control process in place to deal with the changes when they happen along the way.
What else do you think affects the quality of your estimates? Let us know in the comments.