Project planning and estimating

How long is a piece of string?

1
 Estimates and Estimating

 An estimate is an approximation of project

time and cost targets that is refined
throughout the project life cycle

 Estimating uses a range of tools and

techniques to produce estimates

Estimating: 2
 Estimating methods
High
Accuracy
& Detail
Bottom-up
Parametric Estimate
Estimate
Comparative
Estimate

3-point
Estimate

Expert
Judge-
“Quick & ment
Dirty”

Perception Fact

Estimating: 3
 Bottom-up estimating
 Assumes that future costs for a product can
be predicted accurately from historical costs
of that product
 Uses detailed costs of components, built up
into an end product (WBS/PBS)
 e.g. 10,000 bricks, 250 tiles, 20 litres of paint =
total cost of £xxx

 Also known as Detailed Estimate,

Engineering Build-up, or Grass Roots method

Estimating: 4
 Parametric estimating

 Collecting relevant historical data, usually at

an aggregated level of detail, and relating it to
the project to be estimated through the use of
statistical techniques
 At the heart of the parametric estimating
methodology are cost estimating
relationships (CERs)
 e.g. 1 hour of filming will require 5 hours of editing
 e.g. 10% of the cost of developing a new website
is associated with User Testing
Estimating: 5
 Comparative estimating

 Takes actual costs of similar existing or past

projects, and makes adjustments for
complexity, technical, or physical differences
to derive the new project estimate
 e.g. 10 new web pages took 3 weeks and £15k on
project X, so we estimate project Y requiring 20
new pages will take 5 weeks and cost £25k

 Also known as Analogous Estimating

Estimating: 6
 Other estimating methods
3-point estimates Expert judgement
 Come up with 3 numbers:  Ask the project team and
 Realistic (most likely) Subject Matter Experts
 Best case (optimistic)
 Worst case (pessimistic)

 Estimate =
 (B + 4R + W)/6
 N.B. the formula is usually
weighted (4 x R), but
sometimes is the “simple”
average of B, R & W

Estimating: 7