Estimates are required, to varying degrees of accuracy, at all stages of the project life cycle. The estimate is a crucial part of the project process, and the key to producing a good estimate, is quality of information.
Various estimating techniques can be used but here are some basic rules for you to consider when estimating in your project:
• Remember to estimate people, materials, equipment, effort and financial resources.
• Assume that people resources will only be productive for 80 per cent of their time.
• People resources working on multiple projects take longer to complete tasks because of time lost switching between them.
• People are generally optimistic and often underestimate how long tasks will take _ a common cause of failure is underestimating cost and overestimating benefits.
• Make use of other people’s experience as well as your own.
• Don’t be afraid to ask _ obtain an expert view.
• Include management time in any estimate.
• Consider building in contingency for problem solving, meetings and other unexpected events.
• Cost each task in the work breakdown structure to arrive at a total, rather than trying to cost the project as whole.
• Agree a tolerance with your customer for additional work that may not yet be defined or you expect might change.
• Communicate any assumptions, exclusions or constraints you have to your customer _ and make them “visible” in your schedule.
• Provide regular budget statements to your stakeholders _ manage their expectations, so that they are always aware of the situation.
Common Mistakes when Estimating
• Not understanding what is involved to complete an item of work.
• Starting with an amount of money and making the project cost fit.
• Assigning people resources at more than 80 per cent utilization.
• Failing to build in contingency.
• Failing to adjust the estimate in accordance with changes in scope.
• Dividing tasks between more than one resource.
• Providing estimates under pressure in project meetings.