Estimation is a crucial skill for project managers, as it affects the scope, budget, and timeline of any project. However, estimation is also challenging, as it involves dealing with uncertainty, complexity, and human factors. How can you improve your estimation skills and deliver more accurate and realistic results? Here are some tips and techniques to help you.
One of the best ways to improve your estimation skills is to break down the project into smaller and manageable tasks. This will help you reduce the complexity and uncertainty of the project, and allow you to focus on each task individually. You can use different methods to break down the project, such as work breakdown structure (WBS), user stories, or deliverables. Breaking down the project will also help you identify the dependencies, risks, and assumptions that affect your estimation.
'Decomposition' is breaking down a project into smaller, more manageable tasks or work packages. With this way the scope of the project can be easily planned and understood. In this approach the activities can be drilled into more granular levels. This way the 'bottom up estimation' could be applied for a better and meaningful estimates.
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Following strategies can be used to improve estimation skills: 1.Gather historical data, 2.Break down tasks: Break down complex projects into smaller, manageable tasks. 3.Explore various estimation techniques such as analogous estimation, parametric estimation, and three-point estimation. 4.Involve subject matter experts. 5.Continuously learn and adapt 6.Seek feedback: Collaborate with team members and stakeholders to gather feedback on your estimates.
Lessons Learned Repository is a great source for estimation of work and durations which is analogous estimation. Other methods would be interviewing stakeholders, subject matter experts and Expert judgement. Top down estimation is great for Waterfall projects, where the scope can be decomposed into manageable chunk of work, where as bottom up can be used for cost estimation. Three point estimate is a famous method for estimation which takes optimistic, pessimistic and best case scenarios. In the age of Artificial Intelligence I am sure there are Tools which can help in estimation methods.
Comparing to like/ similar scenarios. For example if a team delivers a component or a task in 2 weeks, and a similar request comes in, we can assume (give or take) that similar task will also take two weeks. It’s a matter of understanding how similar those tasks are through analysis to determine LOE or level of effort. Over simplified example but it works.
Another way to improve your estimation skills is to use multiple sources of information to validate and refine your estimates. You can use historical data, expert opinions, industry benchmarks, or estimation tools to compare and cross-check your estimates. You can also use different techniques to generate your estimates, such as bottom-up, top-down, parametric, or analogous. Using multiple sources of information will help you increase the accuracy and reliability of your estimates, and avoid biases and errors.
A third way to improve your estimation skills is to apply contingency and buffer to your estimates. Contingency is the amount of time or money that you add to your estimate to account for the uncertainty and variability of the project. Buffer is the amount of time or money that you add to your estimate to account for the changes and risks that may occur during the project. Applying contingency and buffer will help you cope with the unexpected and deliver your project within the agreed scope, budget, and timeline.
Itemize "mobilization" as a project cost, and work with your operations team to quantify it. See if you've done work with this customer prior, or something similar in scope, and ask your project managers about working with them. Things like access to project location, security protocols, onsite storage, etc can all have a substantial impact on cost and should be covered in your estimate.
Applying contingency to a project estimate involves allocating additional funds and/or time to account for unforeseen risks and uncertainties. This buffer acts as a safeguard against potential overruns and helps manage project uncertainties effectively. To do it right, contingency should be based on a thorough risk analysis, considering both known and unknown factors. It's important to clearly communicate the presence of contingency to stakeholders and regularly reassess and adjust it as the project progresses. A well calibrated contingency ensures that the project stays within its planned scope, budget, and timeline despite unexpected challenges.
A fourth way to improve your estimation skills is to review and update your estimates regularly throughout the project. You should monitor the progress and performance of your project, and compare it with your original estimates. You should also collect feedback and lessons learned from your team, stakeholders, and customers. Reviewing and updating your estimates will help you adjust and align your estimates with the reality and expectations of the project, and improve your estimation skills for future projects.
Review and make adjustments as you go and do a deep dive once the job is complete to see where you made mistakes. This help you and your team learn from all mistakes.
Regularly reviewing and updating project estimates throughout the project or iteration of a project is critical. By doing this it creates an environment of continuous learning. Which improves the project management team's estimation skills and proficiency.
As we discuss best practices for reviewing and updating project estimates, this includes conducting regular assessments to account for changes in scope, requirements, or external factors. Involving key stakeholders in the review process to gather diverse perspectives is key. Utilizing historical data and lessons learned can also enhance the accuracy of the information at hand.
A fifth way to improve your estimation skills is to learn from others who have more experience and knowledge in project management and estimation. You can seek mentorship, coaching, or training from senior project managers, experts, or consultants. You can also join online or offline communities, forums, or networks where you can exchange ideas, tips, and best practices with other project managers. Learning from others will help you gain new insights, perspectives, and skills that will enhance your estimation abilities.
Comparing our estimates to those of similar companies in the market is a valuable strategy to enhance our estimation skills. This benchmarking process not only provides insights into industry standards but also allows us to identify areas for improvement within our own estimation practices. By analyzing how comparable companies approach and refine their estimates, we gain a nuanced understanding of market dynamics and industry trends. This, in turn, empowers us to make informed adjustments to our estimation methodologies, fostering a continuous learning cycle that contributes to the refinement and precision of our estimation abilities.
A sixth way to improve your estimation skills is to practice and experiment with different projects and scenarios. You can use case studies, simulations, or games to test and challenge your estimation skills. You can also try different approaches, methods, or tools to estimate different types of projects, such as agile, waterfall, or hybrid. Practicing and experimenting will help you develop your intuition, confidence, and creativity in estimation, and learn from your mistakes and successes.
Practicing with estimate tools will allow you to better understand the process, budget and cost associated with the project. Speed, functionality, and accuracy will improve, and it may also reveal potential problems with the software that senior users may have missed, and lend room for constant improvements to better facilitate the bid.
In addition to breaking down tasks into micro stages and making estimates, another effective way to enhance your estimation skills is by taking a broader view of the project. While it is important to focus on the details, considering the project as a whole is essential. By applying yearly estimates at a micro level, you can effectively plan resources, timing, and ensure that all key goals are accounted for in your project planning process.