The project estimation is the quite logical step, after we have seen how to break down our project into milestones and tasks in our work breakdown structure in the last post. In this post, we’ll explain that with the help of easy step by step approach in a couple of minutes.
Project Estimation the Easy Understanding
You can find contents which make understanding of project time estimation and the related processes, techniques and other stuff very difficult to digest. We instead take a simple and easy approach to explain the concept of estimation to it sticks to the brain and you never forget it.
What is Estimating Project Work?
So what exactly is estimating time for the project work means? Estimate means the time a task and a project will take to complete. It is the foundation for project schedule and budget. Estimation is done after the tasks are broken down as WBS. It sounds simple but proves tough. Estimating should be done carefully.
Importance of Estimating
Project work estimating provides a foundation for creating project schedules, calculating project budget, and managing risks. It helps identify the duration of the tasks and resources required to complete those tasks. Incorrect estimations cause risks.
Techniques of Estimating
The following techniques are commonly used in estimating.
- Top-Down Estimating
- Bottom-Up Estimating
- Analogous Estimating
- Parametric Estimating
- Three-Point Estimating
Methods of Estimating
The following methods are commonly applied to estimating:
- Expert judgement
- Historical data
- Weighted average (PERT)
- Risk factors
- Team consensus estimating
Process of Estimating
Here we show you the simple step by step process of project estimation. If you follow the steps neatly, you’ll be able to easily handle the project estimations for any type of project.
- Performed by people working on project
- Based on the work breakdown structure
- Estimates are done at the lowest level
- Use estimating techniques and methods
- Document the estimate assumptions
- Improve estimates based on actual performance
Issues in Estimating
Project estimation is not always a piece of cake. There are certain issues which can crop up while you work with the estimates. We have highlighted some of the common issues with estimating in the following list. But you should not just stick to this list, and keep a close eye on any other related issues hindering your estimation efforts.
- WBS was not properly defined
- Actual team is not doing estimating
- Improper use of estimating methods
- Improper risk planning
- Estimates forced by the top management
Estimating and Risk Management
Estimations and risk has a very close relationship. In this step, we find out what is the link between both. The estimates have natural uncertainty due to different unknown factors. So you need a method which can help manage and mitigate the risks. Document assumptions for reference, identify key risk factors, keep some slack to manage known risk.