Estimation is most challenging tasks that project managers must face as there are so many uncertainty associated with many activities. Estimation is the process of predicting the most realistic amount of efforts to develop software. Faulty estimates leads to missing deadlines and breaking budgets and these two are the main reasons for project failure.
I had faced the same issue in the past when I was novice as Project manager. Sometimes I was doing overestimation and sometimes under estimation. Some people thought it is good to do overestimation than underestimation but remember both had impact. If you do overestimation then you might be in position to lose your customer trust and if you do underestimation then it might be loss to your company.
So being skilled estimator is an important and crucial part of setting schedule, managing resources and running a flourishing team and business!
While doing estimation you can divide activities in three parts:
- Independent activities: These are the activities which are clear items, well understood and easily predictable.
- Dependent activities: These are the activities whose time or efforts is dependent on some other attributes of projects like inter-dependencies between task, developers or teams. For these type activities an assumption is made and this assumption is a risk which needs to be added in risk register.
- Uncertain activities: These types of activities are the most difficult to estimate. These types of activities generally includes requirement definition task on complex projects or changes in scoping in between development or etc…
Now a days there are many online project management software available in market but knowing the methods and learning how to do them well is how you become a great estimator so below are the few methodologies to choose from:
- Expert Judgement: This is the best and most commonly used technique. Talk to people who have the best hands-on experience and understanding of the requirements.
- Top – Down Break Down: using high level work breakdown and using experience from previous projects, you can add estimates for each work item and count overall efforts and cost. The only problem is this method lacks detailed analysis.
- Bottom – up Break Down: This method uses detailed work breakdown structure. Each task is estimated separately. This is better than Top – down but it involves greater investment of time.
- PERT: PERT is one of the successful and proven methods among the other techniques. It involves three estimation times; optimistic time (Best case), Most likely time and pessimistic time (Worst case). For this case we can generally ask experts to first provide worst case estimate and then the best case estimation. Once both these are agreed it is easier to determine the most likely case. Once all three parameters are defined apply the following formula:
Estimate = (Best case estimation + 4 x Most likely estimate + worst case estimate) / 6
So, can you tell us what’s your favorite project estimation methodology? Let us know in the comments!