What can you learn from successful project managers and organizations about estimation best practices?

Sadly, many project management professionals focus on the PM processes and ignore to learn up on project estimation skills. There are many estimation techniques out there. While learning the skills may take time, but the important thing is to get started. There are many aspects of estimates that we need to account for, and not just the activity costs. I will share some details in the next articles.

Project estimation - often viewed as a technical exercise - is, in fact, a strategic masterpiece. It's the backbone of your project planning, execution, and communication. You're not just throwing numbers - you're aligning your project with your organisation's goals, priorities, and constraints. It influences how you manage expectations, mitigate risks, and navigate changes. Estimation builds the bridge between your project's success and your career growth. It's your stepping stone to demonstrate your value, credibility, and professionalism as a project manager. So the next time you're mapping out your project, remember this - Estimation isn't just about numbers. It's about strategy. It's about success. Don't undervalue it.

In project, 3 pillars are indispensable for project success. These are schedule (time), scope and budget (cost) aspects. The correct estimations of these pillars directly affect projects trend and final achievement. If any aspect miscalculated, it affects others and all project equilibrium. For example, if a project manager could not estimate time variable correctly, there are only 2 ways to correct it: increase cost(more team members or investment for tools) or change scope (cancel some features to gain time). In general, if a project manager can estimate 2 pillars correctly (with accurate data) 3rd pillar is easy to estimate. It is also known as project management triangle.

A crucial lesson I learned from my Senior Project Manager is that accurate estimation is the linchpin of successful project management. It matters because it forms the foundation for realistic planning, resource allocation, and client expectations. Precise estimations enable effective decision-making, help avoid delays, and foster trust with stakeholders by setting clear and achievable project milestones.

Don't underestimate the power of a good estimate. It's your golden compass, guiding you towards realistic project timelines, budgets, and resource allocation. Without it, you're sailing blind, risking missed deadlines, budget overruns, and ultimately, project failure. Remember, accurate estimations build trust with stakeholders and set your project up for success.

From a data-driven perspective, my Senior Project Manager taught me to leverage historical project data for scope estimation. By analyzing past projects, we identify patterns, challenges, and refine our estimates based on real-world experiences.

Break down your project into manageable chunks and define clear deliverables for each. Use techniques like work breakdown structures (WBS) and use cases to visualize the scope and identify potential complexities. Remember, a well-defined scope is the foundation for accurate estimations across all aspects.

Estimating scope involves defining and breaking down the project into manageable tasks, deliverables, and milestones. To estimate scope accurately, you need to involve your team, stakeholders, and experts in the process. You also need to use reliable data, tools, and methods, such as historical records, benchmarks, analogies, parametric models, or expert judgment.

Start by breaking down the project into smaller, manageable tasks. Utilize historical data and benchmarks from successful projects for reference. Engage with experienced project managers and organizations to gather insights and best practices. Consider potential risks and uncertainties that may impact the project scope. Regularly review and update the estimation as the project progresses, incorporating lessons learned for continuous improvement.

My Senior Project Manager showed me how to use past project data for scope estimation from a data-driven standpoint. We find trends, obstacles, and improve our predictions based on practical experience by examining previous projects.

Don't just guesstimate! Use historical data from similar projects, expert opinions, and industry benchmarks to gauge the time each task might take. Factor in dependencies, learning curves, and buffer time for unforeseen delays. Remember, realistic time estimates prevent burnout, keep your team motivated, and ensure deadlines are met.

Considering risk management, my Senior Project Manager taught me to factor in contingency time during estimation. By anticipating potential delays and allocating extra time for unforeseen challenges, we build resilience into our timelines, increasing the likelihood of on-time project delivery.

Time estimate involves assigning start and end dates, dependencies, and buffers to the project's scope. To estimate time realistically, you need to consider the availability, skills, and productivity of your resources. You also need to account for external factors, such as holidays, weather, or market conditions.

Break Down Tasks: Divide the project into smaller, manageable tasks to estimate more accurately. Historical Data: Use data from past projects to identify patterns and improve estimation accuracy. Expert Input: Consult experienced project managers for insights and guidance on potential challenges and time requirements. Risk Assessment: Consider potential risks and uncertainties that may impact project timelines and account for them in your estimates. Regular Review: Continuously review and adjust estimates as the project progresses, incorporating lessons learned for future improvements.

To estimate how long each activity would take, consult industry benchmarks, expert views, and historical data from related projects. Consider learning curves, dependencies, and buffer time for unanticipated delays. Recall that giving your team reasonable time estimates will keep them engaged, avoid burnout, and guarantee that deadlines are reached.

Analogous estimating and bottom-up estimating are very practical. If your organization has completed similar projects before, analogous estimating can provide a quick result by using historical data/key parameters and adjusting costs for teams, technology, and combining SMEs' advice. On the other hand, bottom-up estimating can offer a more accurate result but requires more time and resources. It involves creating the critical path (or listing all activities) and adding up the costs of each activity. If it's a new project that has never been done before, I highly recommend this approach.

Once you have your time estimates, multiply them by the cost per unit of time for each resource involved. Don't forget indirect costs like overhead and equipment. Utilize tools like cost estimation models and budget breakdowns to track and manage your finances. Remember, accurate cost estimations ensure budgetary discipline and prevent financial shipwrecks.

From a vendor relationship standpoint, my Senior Project Manager emphasized the need for open communication with suppliers during cost estimation. Building strong partnerships and negotiating pricing collaboratively help create realistic budgets and foster positive relationships that can impact project success.

Estimating cost involves calculating the direct and indirect expenses of the project's scope and time. To estimate cost effectively, you need to align your budget with your scope and schedule baselines. You also need to include contingencies, reserves, and escalation factors to cover potential variations and risks.

Gather historical data on similar projects to identify patterns and trends. Consult with experienced project managers to leverage their insights and expertise. Use estimation tools and techniques endorsed by successful organizations. Consider potential risks and uncertainties to account for contingencies in the budget. Continuously refine the estimation process based on feedback and lessons learned from previous projects.

Estimation of Quality depends on how much time you allocate to testing team. Its been always a case where developers gets more time to develop but when the timelines are tight they ask tester to test it as soon as possible which eventually reflects on your Quality. If you give more time to test your product better will be the risk analysis.

Quality isn't just a vague wish! Define specific quality standards for each deliverable and consider the resources and processes needed to achieve them. Utilize quality control measures throughout the project to monitor progress and ensure expectations are met. Remember, factoring in quality from the start prevents rework and ensures your project shines with excellence.

From a process perspective, my Senior Project Manager emphasized the importance of incorporating quality standards into every phase of the project. By integrating quality assurance measures early on, we ensure a proactive approach to maintaining high standards throughout the project lifecycle.

Estimating quality involves defining and measuring the quality criteria, standards, and metrics for the project's deliverables and processes. To estimate quality efficiently, you need to balance the trade-offs between quality, scope, time, and cost. You also need to adopt best practices, such as quality planning, assurance, control, and improvement.

Study successful project managers and organizations to identify their estimation methods. Analyze historical project data and performance metrics to understand past estimation accuracy. Incorporate industry benchmarks and standards to set realistic expectations for project outcomes. Utilize feedback loops and continuous improvement processes to refine estimation techniques over time. Foster a culture of collaboration and knowledge sharing to enhance collective estimation skills within the team.

Identify potential threats and opportunities that could impact your project. Use techniques like risk matrices to assess the likelihood and impact of each risk. Develop contingency plans to mitigate their effects and ensure your project stays on course even when storms hit. Remember, proactive risk management prevents unexpected detours and keeps your project afloat.

Properly estimating risks helps project managers identify and understand potential threats that could impact the project's success. This allows them to take proactive measures to mitigate these risks, such as developing contingency plans or implementing preventive actions. By addressing risks effectively, project managers can minimize their impact and increase the chances of project success. Estimating risks properly provides project managers with valuable insights that aid in making informed decisions throughout the project lifecycle. By understanding potential risks, project managers can make strategic choices, such as adjusting project scope, adopting alternative approaches, or reallocating resources.

I was introduced to Monte Carlo simulation for risk estimation. By running multiple simulations with varying inputs, we gain a probabilistic understanding of potential project outcomes, allowing for a more nuanced and data-driven risk assessment.

Study successful project managers and organizations to understand their risk estimation approaches. Analyze historical data from similar projects to identify common risk factors and their impact. Engage in regular communication with experienced professionals to gain insights into their risk assessment strategies. Utilize risk management frameworks and tools recommended by industry leaders. Continuously adapt and refine your estimation processes based on lessons learned and emerging best practices.

Reflecting on my career, grasping how to estimate risks is an art. Successful project managers adopt a proactive stance. Identifying potential risks, assessing their impact and probability, and developing risk mitigation plans contribute to robust risk estimation. I've realized that risk estimation is an ongoing process, requiring continuous monitoring and adaptation.

Practically speaking, try to avoid a theoretical approach. Instead, request some time from the project manager to seek mentorship. Arrange a coffee meeting or sit down for dinner to engage in a casual conversation. A good leader appreciates healthy discussions and is willing to address your queries. As the saying goes, a good conversation is often more enlightening than reading a book.

Best project is perfect balance of quality, cost and time of delivery with perfectly balanced risk. Either of these 4 missing from your estimation will not ultimately deliver success to your project.

Estimation isn't just about numbers – it's about understanding your team and their capabilities. Foster a culture of open communication and collaboration where everyone feels comfortable sharing their insights and concerns. Remember, trust and teamwork are the secret ingredients for accurate and reliable estimations.

Keep it simple by learning from their experience, how they prioritize communication, incorporate buffers, collaborate with the team, refine estimates continuously, how to use historical data, consider dependencies, and assess risks for effective project estimations.