Last time in the deep dive into the PMBOK Guide®-- Sixth Edition I looked at Project Schedule Management and the Sequence Activities process. You’d expect today’s instalment to be covering Estimate Activity Resources, which is what came next in the PMBOK Guide® -- Fifth Edition.
However, that process has now moved to the Resource Management Knowledge Area so we skip ahead to Estimate Activity Durations.
Estimate Activity Durations Process
This is (now) the fourth process in the Knowledge Area. We’re still in the Planning process group.
The point of this process is to work out how long each activity is going to take. You’ve already got the tasks in a logical sequence. Next it’s time to work out the overall duration of the project based on the duration of the individual tasks.
The main output is a set of estimates. These feed into the next process, where you create a project schedule.
In my experience, building the schedule and working out the activity estimates are two processes that overlap majorly. I’ll start creating the schedule in my project management software from the task list, and update the task information with durations as and when I know them. So the schedule is developed as each estimate (and other information like resource availability) is added.
Go into this process knowing how the estimates are going to be used, and you might save yourself some time when it comes to adding them into your schedule. This is all about being effective and managing your planning in an integrated way.
Right. Let’s look at the detail of this process starting with the Inputs.
There are quite a few changes to the Inputs between the PMBOK Guide® -- Fifth Edition and Sixth Editions. Mainly, it’s items being removed. We’ve lost eight specific documents and replaced them with the generic Project Management Plan and Project documents.
This is a trend in the new edition. It’s a good trend too, as it allows us to be more flexible with the Inputs and use the paperwork that is most relevant to the project.
The important parts of the project management plan are the schedule management plan (as this includes some background info on expected level of accuracy and possibly other criteria useful for starting out estimating) and the scope baseline (as the WBS dictionary may include some criteria that would affect the estimate e.g. technical details or constraints).
Useful project documents to refer to during estimating include:
Tools & Techniques
Group decision making techniques and reserve analysis have dropped off the Tools and Techniques list.
Instead, we’ve got bottom up estimating (I’m not sure why that wasn’t on there before, as other types of estimating were – looks like an oversight to me), data analysis (broader than reserve analysis) and meetings (which you can argue includes making decisions as a group).
Most of the Tools and Techniques unsurprisingly relate to estimating approaches. As the main output is your estimates for task durations, you need to know how to estimate and which is the best estimating approach to use at any given time.
I’ve written quite a lot about estimating techniques in the past. Here are some articles to take these T&T further:
And at some point I’ll get round to writing about three point estimating – that’s actually a technique I use and I consider it to be one of the better ways to estimate knowledge work.
Activity duration estimates have been renamed ‘duration estimates’. These are statements about how long a task will take, either as a range, a defined number or similar.
There’s a new output for the basis of estimates, which is really important. If you haven’t been clear about how you created the estimate, you can’t explain the basis on which you reached the numbers. This is essential for helping other people understand the boundaries of the estimate, its reliability and whether or not it’s a final position. The basis of estimates should include an indication of the range used and confidence levels and can also refer to any risks that would influence the likely accuracy of the estimate.
Project document updates stays the same – you will have to update a range of paperwork, depending on what changes or needs review as a result of your estimates.
Next time I’ll be looking at Develop Schedule.
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Project estimating is something we have to do a lot. And being good at estimating generally means being accurate in the estimate. That doesn’t mean you have to get your budget figures defined to the nearest penny. But you do have to work out your numbers robustly and present them in a way that is clear to stakeholders. They need to understand how you are using the numbers and what they are looking at.
There are three ways to talk about the accuracy of estimates:
Find out more about how these different types of estimates are defined and calculated using ranges in this short video.
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So you need to estimate some work for your project? Great. Project managers need estimates to help with planning, scheduling and budgeting. Estimates are useful things. But how do you get there?
Estimates come from talking to people. Even if you use scenario-based software or modelling tools, you have to talk to people to get the parameters set up correctly. The easiest way to do this is to run an estimating session.
Here’s how to facilitate the meeting so you get the outcome you need.
1. Get the right people in the room
First, get the right people in the room.
I’d recommend having separate meetings with separate groups of colleagues. There’s nothing more boring than having to sit in a meeting where people are estimating tasks that have nothing to do with your work, waiting around for your chance to talk about how long your work is going to take. If you don’t need everyone there together, split them up.
You need to have people who have the knowledge to contribute to the estimating process. These will be people who:
Your meeting attendees don’t have to hit every item on that list, but they should be knowledgeable and helpful to the ultimate goal of the meeting, which is to come up with estimates for your project plan. And that brings us on to…
2. Have clear outcomes
You can have a loose agenda, but you need to have clear outcomes. What are you estimating: the whole workstream or a particular phase? A set of tasks for the coming month?
Are you estimating time or money or both? If it’s time, do you want to get duration or effort out of the meeting (or both)?
If you are clear about what you need to achieve before the meeting closes, you are more likely to get there.
Keep bringing people back to the ultimate goals of the meeting and reminding people what you need from them. You can keep the meeting on track far better with clear goals – and generally, people want to be out of a meeting room as soon as possible!
3. Agree the techniques or approach
What tools, methods, approach and techniques are you going to use? People often get hung up at this stage because the language is off-putting. Is chatting with your expert peers really a technique? The PMBOK® Guide – Sixth Edition would describe this as Expert Judgement.
All this step means is work out how you are going to do the estimating. Make sure everyone understands how it is going to happen. For example, if you are using Monte Carlo simulation, then you’ve got software and a process for doing it. If you are making up the estimates based on a set of sticky notes on the wall and a long debate ending with a guesstimate, that’s fine too. Just get everyone on the same page.
Have an open conversation about how vague you are prepared for the estimates to be, and at what point they would be firmed up. How are you going to track confidence levels? (Are you going to note down confidence levels at all?) Sorting out things like this at the beginning of the meeting will ensure everyone understands the context for the estimate and can explain it to others when they leave the room.
If part of your approach requires looking at past project data (a very handy and robust way to estimate similar tasks) then I’d suggest you have that ready and accessible. Run a few reports or download some planned/actual data before the meeting so you don’t have to waste time in the session itself trying to find the figures you need.
4. Do the estimating
Now you come to the part where you have to do the estimating. You’ve got the right people. They know why they are there and what you need to get out of the session.
Now talk to them. Use the tools you’ve decided on. Run simulations, stick sticky notes on the wall. Pull up holiday calendars and plan around vacation time.
This part is the bulk of your meeting. Go through each item and estimate it. Make sure everyone has a chance to contribute. If you notice disagreements in the estimating process, try a technique like three-point estimating to bring most and least likely scenarios together in a way your experts can agree on.
5. Document and use the estimates
Document how you got to the estimate. You might think you’ll remember, but in three years, when someone asks you to run an estimating session for their project, trust me, you won’t remember exactly how you arrived at the end result. Sometimes I don’t even remember how an estimate was calculated and we only worked it out a few months ago.
Write down your assumptions and the constraints you took into account when coming up with the final figures. Note the confidence levels and anything else you considered when you were discussing the estimate.
Finally, all you have to do is use the estimates. Incorporate the outcomes into your project schedule or budget. Look at what impact that has. Update resource calendars and any other documentation that might change as a result of the new numbers.
Then get on and deliver those tasks!
What are the steps for estimating?
Each business will have a slightly different approach to how to do project estimating, and your PMO will likely have a methodology that you are expected to use. For budget estimating, it maybe the corporate Finance department that sets out how estimates are supposed to be calculated.
However, back in the real world, I meet lots of project managers who don’t have the benefit of a fully-documented helpful process for how to do estimating, so in this article I’ll look at the 4 steps for working out your estimates to give you a headstart!
What is an estimate?
First, it’s worth us defining what an estimate is.
An estimate is a quantitative assessment of a likely outcome.
You will find far more detailed definitions of estimates elsewhere, I’m sure, but that does for me.
On projects you have to do quite a lot of estimating, for example:
Let’s look now at the 4 steps of project estimating. Again: if you have your own corporate methodology to follow, use that or you risk getting into trouble with the PMO! But in the absence of anything else, this 4-step approach is as good as any for getting the basics right.
Step 1: Plan to Estimate
The first thing to do is make a plan. As with so many project management techniques and processes, you need a clear idea of what you are supposed to be doing before you actually do it. This step is where you establish your estimating plan.
That sounds far grander than it really is. It isn’t a lot of work, and once you’ve estimated a couple of projects you’ll find you can do this step almost automatically, with very little effort.
You’ll also need any other documentation about estimating approaches or corporate or PMO standards that you have to adhere to. This all provides input into how you are going to create your estimates and helps you come up with a solid plan for how to approach the task of estimating.
Step 2: Create the Estimate
This is where you create your estimate. Basically, you use the techniques that you identified in your planning step to come up with your estimates. Work with your team to think about the resources, budget and time that you need. Use the tools you identified, and the guidance from your company to create the estimates.
I’d suggest you don’t do this by yourself, how tempting it might be. Hopefully the techniques you identified in Step 1 will recognise that it’s better to work collaboratively for estimating. Different opinions make a difference and you’ll get a better quality estimate – hopefully you chose to use techniques that take advantage of this!
Step 3: Manage Estimating
Here we manage the estimates. You’ve input your estimates into your budget or schedule and you are using them on the project.
However, you want to make sure that they are maintained and managed as the project progresses. This means you could be revising them appropriately as the team do the work, making sure they still accurately reflect what you think is needed on the project.
The most common way to do this is to compare your estimates to your actual figures as you go, and then tweak the upcoming budget figures, schedule or resource allocation appropriately to take account of what you are learning about progress on the project so far.
Step 4: Improve Estimating
This is where you apply continuous improvement principles to the way you work out your estimates. You could argue that this is an optional step – it doesn’t help you manage your current process – but I don’t think it’s too much to ask that you do this on all projects, all of the time.
You’ve learned from your experiences on this project, so take those lessons and look at how you can improve estimating on your future projects.
Calibrate your models, tweak your techniques and do any other changes necessary as a result of what you have learned on this project. This may mean you have to feed information and your experiences back to the PMO or Finance team so that they can take your feedback into account and make the required changes (or not). Still, even if you aren’t in control of the templates and models you use, it is good practice to try to help your company improve its processes where you can.
Those are the 4 high level steps for creating an estimate. See? It wasn’t so bad. Personally I think the planning stage is the hardest, because it involves thinking instead of just diving in. The rest of the process is all about using the tools you decided on and then working with them throughout the life cycle of the project.
When estimating feels like nothing more than a best (even educated) guess, how can you improve your project results? Great – or at least effective – estimating is something that can vastly improve your stakeholders’ confidence levels, help your team plan their work better and give you more chance of hitting your budget or time targets. So why does it feel so hard?
In this infographic I share 5 tips for making estimating that little bit easier. What other advice do you have for improving the estimating process with your team? Let us know in the comments!
You can read more about some of the ideas on this infographic in this article.