How to tackle padding in project estimation

In any project, there should be an established process in place in order to estimate project’s work packages and activities time/cost. The maturity of the process really depends on the size, complexity and type of the project. In a large scale project generally we need to have Scope Baseline (WBS & project Scope Statement) in order to start decomposing WBS level to activities level and estimate required resources and duration to complete the tasks and subsequently project. If we don’t have a sophisticated estimation method, every team members in project who contribute to estimation might add a subjective contingency to the task as a precautionary measure, which is called padding. Now Imagine, project manager, engineer, Cost controller, planner,... all consider the subjective contingency to a task or a work package, the result would be unrealistic timescale and Budget that does not satisfy nor project team neither other stakeholders. On the other hand, they might underestimate the duration/cost of the tasks and work packages and again the outcome would be unrealistic schedule and budget.

So, the question is how to avoid the padding in project? The answer would be accurate estimation through right processes and channels such as experts, lesson learned from similar projects and analytical estimation methods. Besides, we need to have a risk management system in place in order to identify potential risks in outset and through lifecycle of the project and quantify them (time wise and cost wise) where applicable, and then its outcome could be considered as a time/cost contingency plan for activities, work packages and projects to be included in Baseline Schedule and project Budget instead of just padding on tasks or work packages.

PMBOK introduces contingency reserve and management reserve in order to take into account the known and unknown risks.

It might be easy to say setting accurate estimation but it is difficult in practice. Successful implementation depends on number of factors such as;

• Documentation system: To refer to your lesson learned and historical projects when necessary
• Resources: you need to have competent resources  when you form a project team or having access to external resources or consultant for accurate estimation
• Risk Management System: Never two projects are the same, that’s the core feature of the project.  So even if you are going to plan and execute exactly the same kind of project that your organization completed recently; still you need to go through planning and risk management processes.
• Process and Procedure: If you take a look on any project management methodology such as PMBOK or PRINCE 2, all are based on processes. If we don’t say it is impossible, it would be very difficult to manage project on time and on budget without acceptable processes by project team.

To make a long story short, padding is a sign of poor project management and should be avoided. This could destroy project manager and the project company reputation, whilst utilising project estimation methods through right processes increase the chance of achieving projects targets and stakeholders satisfaction.

Rssources:

Project Management Body of Knowledge 5th Edition

PMP Exam preparation Rita Mulcahy 8th Edition