Project Estimating Checklist
Hofstadter’s Law: “It always takes longer than you expect, even when you take into account this law.”
Hofstadter was right. Given the lessons we conscientiously learned from our previous projects, at the start of every new project we convince ourselves that, this time, the best-case scenario will be realised. Unfortunately, every project is a unique endeavour with fresh risks and issues to frustrate our best-case expectations.
While an “exact estimate” is an oxymoron, have we ever been on a project where the deadline was way too tight? Chances are that tempers were frayed, sponsors were unhappy, and team members were working ridiculous hours. Chances are, too, that this happened because someone underestimated the time needed to complete the project. “The planning fallacy” is a term used by psychologists to describe our tendency to underestimate the amount of time it will take to complete a task by thinking only of the best-case scenario.
Estimating accurately can be a difficult process but is one of the most critical components for successful EVM. In particular, the project baseline (PV) needs to be as accurate as possible and reflect the current plan including any authorised variations that impact the budget and/or schedule. Using proven estimating tools and techniques is a good start to ensuring there isn’t significant variance.
Our “gut feel” is usually a poor estimator and often we under-estimate the time and money needed. However, in the realm of project management, nothing is more valuable than estimates that accurately reflect reality, motivate their fulfilment, and facilitate rigorous accountability. The following estimating checklist may help us achieve more honest, accurate and credible estimates:
The estimating process typically follows these four steps:
- Prepare to Estimate. This groundwork stage requires we determine the techniques to be used for estimating, identify those who can assist us, and gather the necessary documentation including historical data. Clearly define what is included and excluded from the estimate, and identify specific assumptions.
- Create Estimates. In this stage, resources, task durations, and costs are estimated, including a contingency reserve, which refers to the amount of funds or time needed above the estimate to reduce the risk of overruns. Be sure to involve the project team.
- Manage Estimates. Managing estimates occurs after the original estimate is completed and includes comparing actual costs to our baseline estimate (PV), and re-estimating the baseline after formal approval if there are significant changes.
- Improve the Estimating Process. As projects progress, we learn lessons to improve our estimating process. Improvements can be applied to both our current and future projects.