Risk Management

5 Tenets of Accurate Project Estimation

What can make an expensive estimate worth its weight in gold? It all amounts to accuracy, says Brad Egeland writing for Project Smart. Of course, an estimate is just that, an estimate. But Egeland says there are five things you can do, suggestions culled from his own experience, to set your project on the right track:

  1. Base estimates on requirements.
  2. Don’t pad the estimate.
  3. Rely on pessimism.
  4. Stay focused.
  5. Consider risks, especially inaccurate estimates.

Estimates that Count

Project managers sometimes forget that estimates, as foundational as they are to the success of a project, are only as good as the requirements they’re based on. To borrow Egeland’s analogy, a house is only as good as the ground it’s built on. Upper management will quickly lose trust in anyone who likes to pad their estimates:

There was a lead tech who management didn’t trust, and the outgoing IT director did not have the experience and skills to know when he was being provided with padded estimates…Watch out for these because it will throw off your schedule and likely upset your customers if they sense that you’re padding your work estimates. Not a good place to be in with your project clients.

Basing estimates on best-case scenarios and measuring against your “good days” will get you into trouble. Instead, be as realistic as possible. If anything, use worst case scenarios to plan your project. And as Benjamin Franklin became famous for saying, “Haste makes waste.” This is no less true in the world of IT projects, where a rushed deadline creates all sorts of risks and calamities. Your best course of action when faced with impatient clients is to simply deliver the most realistic estimate possible.

In general, it’s a good idea to consider and to plan contingencies for all possible risks scenarios. One major risk to consider upfront is your own potential weakness as a project estimator. You can test this weakness by generating your own estimate ahead of your team. Compare estimates to find out how good you are – or how much improvement is needed before you can actually consider yourself an accurate estimator.

Read the original article at: http://www.projectsmart.co.uk/estimating-project-work-gone-wrong-5-common-issues-and-how-to-solve-them.php

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