Estimating: Good, Bad and Ugly

Week 5
How Can Project Manager ensure that estimates are accurate and explain how bad estimates can lead to good projects failing.

Estimates are an important factor in all business projects, they allow the managers to map out the possible outcomes of the project but in some cases businesses over or under estimate and can even get ahead of themselves seeing the benefits before the project is even off the ground.

A project manger is a professional in the field of project management that have the responsibility of planning, procurement and execution of a project.

Project mangers can ensure that estimates are accurate in the following ways:


  1. Involvement - involving all those involved in the process to get all the right information on cost and time estimates as these people are the expert in their own field and would be able to make much more accurate estimates.
  2. Historical Data - use past projects as a way of evaluating how long it will take to complete a project or even how much will it cost.
  3. Complexity Factor - once again using previous projects, mangers should determine if the pending project is more or less complex than previous projects.
  4. WBS - apply a work breakdown structure to clearly define everyone's roles and gives a good time frame indication.
  5. Project Network - applying a project network does allow the business to gain a fairly accurate time frame and indicates which processes are critical and which allow for slack time that could be used elsewhere.
How Bad Estimates can lead to Good Projects Failing

Bad estimating can destroy a good project for many reasons such as the estimates are based on mainly rough guesses and not enough research was done first which can lead to potential problems going undetected until too late. Also if the capital estimates are out then the company could be throwing good money after bad and just trying to start up a dead project.

The difficulty lies not so much in developing new ideas as escaping from the old ones.
- John Maynard Keynes

Credit:
Dan Galorath - Seer
Adele Sommers - Project Smart
Alphawire

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