7 Tips for Estimating the Unknown

Estimating is challenging, especially when dealing with a new programme of work or planning for the next annual budget cycle. The unknown can feel daunting, but the right approach can transform uncertainty into actionable insights. Whether you're building a business case or addressing stakeholder questions, these seven techniques can help you provide meaningful estimates that drive smarter decisions.

1. Uncover the Real Questions Behind the Estimate

Before diving into the numbers, clarify why the estimate is needed. Often, estimation requests hide deeper concerns, such as feasibility, cost, or priority. Digging deeper reveals the true purpose, allowing you to focus on what matters.

Common hidden questions include:

• Is this idea achievable within a reasonable timeframe?
• Do we have the resources to deliver this?
• Should we prioritise this over other initiatives?
• When can we tell customers they’ll see this feature?
• How will this help fill a revenue gap?

Sometimes, the real question doesn’t even require an estimate. For instance, refining the business case or reframing the problem can provide the clarity needed without pulling developers away from valuable work to estimate uncertain futures.

2. Think Budget, Not Estimate

Budgets are a reality of business. Instead of focusing on precise estimates, uncover the available budget and adjust the scope accordingly. Shift the conversation from “How much will this cost?” to “What can we deliver for this amount?” This approach not only saves time but also creates a more practical framework for decision-making.

3. Use Constraint-Driven Estimation

Start with the constraints—budget, resources, or deadlines—and estimate within these boundaries. By framing the work around what’s achievable, you get rapid, good-enough estimates to evaluate feasibility without getting bogged down in unnecessary detail.

When working with deadlines, it’s crucial to understand their nature and impact:

• Hard deadlines: These are immovable and often tied to external commitments, such as regulatory compliance or seasonal events tied to a key date. Missing these can have severe consequences.
• Soft deadlines: These are more flexible and often driven by internal expectations. Negotiating or adjusting these deadlines might provide more room to manoeuvre without significant fallout.

Recognising the type of deadline allows you to better align your estimation efforts and manage expectations. If there are no clear constraints, it’s worth questioning whether the project is a viable investment in the first place.

4. Leverage Reference Class Forecasting

Historical data is your ally. By analysing similar past projects, you can create a realistic baseline that counters optimism bias. This method not only helps establish credible estimates but also builds stakeholder trust by grounding forecasts in real-world evidence.

If you lack sufficient historical data, don’t worry—Solutioneers can help you build a robust reference class forecasting dataset. With the right data at your fingertips, your team can make faster, smarter decisions with confidence.

5. Balance Accuracy and Precision

Not all estimates are created equal. Discuss with the requester whether they value accuracy (being close to the actual outcome) or precision (a narrow range of uncertainty). Aligning on this trade-off ensures your estimate meets their expectations without overpromising.

For example: A 90% confidence range of 6–10 weeks is often more actionable than a confident but wrong “5 weeks.” When estimating the unknown, clarity and realism trump false precision every time.

6. De-Risk and Validate Through Discovery

When facing a large, uncertain initiative, consider a discovery phase. By investing a relatively small amount of time and money upfront, you can:

• Learn more about the problem you're solving.
• Clarify requirements and uncover hidden challenges.
• Quickly validate the business case through market testing or rapid prototyping.
• Identify weak spots in assumptions or risks in the approach.

In situations where big unknowns or risks abound, planning a short, timeboxed ‘spike’ can be invaluable. Spikes allow you to:

• Investigate a Key Risk or Unknown: For example, research or prototype a tricky feature to uncover potential challenges.
• Generate Concrete Findings Quickly: Use the results of the spike to inform more accurate estimates for the remainder of the work.

By addressing uncertainties early, you create a clearer path forward, reducing the likelihood of delays or costly surprises down the line. Discovery work and spikes aren’t just about reducing uncertainty—they ensure that decisions are based on real-world evidence and not optimistic guesswork.

7. Combine Multiple Techniques to Look for Convergence

Estimation isn’t a one-size-fits-all process, and relying on a single method can leave blind spots. By combining multiple techniques—such as reference class forecasting, constraint-driven estimation, and discovery—you can triangulate your results and look for convergence.

For example:

• Start with historical data to establish a baseline (reference class forecasting).
• Adjust the estimate based on your current constraints, such as budget or deadlines.
• Use discovery work to validate assumptions and refine the estimate further.

When different techniques point to similar outcomes, you gain greater confidence in your numbers. If they diverge significantly, it signals areas where deeper investigation is needed. Convergence not only improves accuracy but also helps build stakeholder trust by showing that your estimates are well-considered and multidimensional.

Estimating the unknown isn’t about guessing—it’s about creating clarity and confidence through structured approaches and clean language. These techniques help you manage uncertainty, guide decisions, and deliver confidence without overcomplicating the process.

Want to master these techniques and more? Our Advanced Estimation Course is designed for technology leaders like you. Dive deeper into:

• Advanced methods for estimating the unknown.
• Real-world examples of successful estimation in high-stakes initiatives.
• Tools and frameworks to enable your teams to estimate with confidence.

Whether you’re building a business case, navigating budget cycles, or aligning your stakeholders, this course will equip you with the strategies to succeed.

Ready to take the guesswork out of estimation? Let's explore how together—book an exploratory chat through my profile above today!