The UK Government’s Infrastructure and Projects Authority has released some cost estimating guidance as a best practice approach for infrastructure projects and programmes. It’s actually pretty interesting, and very easy to see how it translates to smaller projects as well. Despite the picture on the front being clearly of a major construction site, there’s plenty in here that would apply to any project.
One of the principles I found interesting was the idea of front-end loading. The guidance says:
Robust planning, design and preparation in the early stages of a project’s lifecycle are essential in driving successful delivery.
Can’t disagree with that.
Front-end loading isn’t about front-loading cost. You don’t have to plan to spend early in the project (unless that is the right thing to do). Instead, it’s all about making sure there is a robust and sensible approach to planning for spending.
I think the point of this principle is to make it clear that planning is important – just in case any stakeholders want the work to start straightaway. The more effort you put into planning upfront, the more likely it is that you’ll be able to hit those plans.
The first initial period of the project is crucial because it’s all about setting objectives, choosing a solution and building a set of requirements that everyone agrees on. You can’t create accurate cost forecasts based on misconceptions and no clear idea about what the project is actually supposed to deliver. (And the same goes for time estimates too.)
Plus there’s that much-used theory of the cost of change: it’s easier and cheaper to make changes early. By the time you get to the end of the project, so much has already been completed that doing a change can be very difficult and costly.
The more you know about a project, the less likely it is that there will be major changes later on. Of course, you can’t ever predict the future, but on a large capital build project, I expect there is a degree of certainty once the base requirements have been nailed down.
Getting external stakeholders involved at this time is also helpful. They can provide information for assumptions, help identify constraints, and basically give you a lot of data that could help form better estimates.
The guidance talks about making sure that uncertainty in estimates is identified so it can be removed, and that’s part of what you are doing in this step. It’s fine to not have all the detail and to create a broad-brush budget during the early stages, but ultimately you are going to have to refine estimates later.
If an estimate includes a degree of uncertainty, identifying that early helps you work to remove the risk. You can build risk mitigation into the plans and as soon as risk is removed (or managed to the level considered appropriate) that gives you more information to refine the estimates.
Interestingly, the guidance talks about an expectation that 3% to 5% of the project’s total cost is expected to be spent before work begins – specifically construction work, but I suppose we could extrapolate that to any project.
The IPA blog talks about projects that have a focus on front-end loading seeing savings of up to 20% on budget and being delivered 10-15% faster. That’s quite a statement to pass to a sponsor who just wants you to get going!
This initial burst of funding is for the planning and initiation phase. It gives you permission to spend some money and time before you really get going, just so you can work out what needs to be done. It might feel counter-intuitive to spend the project’s budget before the budget is really approved, but that’s no different to the concept of building a prototype or doing a pilot before committing the rest of the time and money to a larger piece of work.
The implications for other projects
If you don’t do a good job of front-loading effort and planning, you might end up working on the wrong projects. Put the time into a business case and decent estimating, and you get a lot of information about project viability. What might have looked good at the high level might be less attractive once you’ve gone to the next level of detail.
How do you feel about front-loading? I tend to do this as much as possible, but I do know from my mentoring clients and the project managers I talk to that there is often quite a lot of push back from executives who don’t consider planning to be that important. Let me know in the comments about how you handle it!
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