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7 Reliable Ways to Improve Project Estimates

7 Reliable Ways to Improve Project Estimates
By Harry Hall

Once upon a time, I sat in the office of a CEO as he described ten years of late and grossly over-budget Information Technology projects. He was more frustrated than a New York Mets fan losing another New York Yankees game. He asked why IT continued to promise the moon, but could not get off the launching pad.

As I interviewed stakeholders within the organization, I quickly discovered a primary cause of the underperforming project portfolio—poor estimates driven by a lax attitude. IT would provide estimates with little project definition or analysis. What would IT do when they missed the promised implementation period? Like a spoiled kid failing college, they would ask for another semester, more toys, and more money. They always had an excuse: “The users never know what they want.”

Fixing this type of dysfunctional attitude and behavior is not easy. Read the Complete Article

Common Project Manager Mistakes: #5 Assuming Estimates Can Be Right

Common Project Manager Mistakes: #5 Assuming Estimates Can Be Right
By Samuel T. Brown, III, PMP, Global Knowledge Course Director and Instructor

This article is part of a series. The previous article can be found here.

Estimating is fortune telling. When we estimate how long something will take or how much it will cost or how much resource will be needed, we are using the best information available to us and our experience to predict what is required for an event, activity or deliverable before we begin. This is self-evident, particularly when we see it in writing, but it belies assumptions that we usually fail to account for in the way we estimate or plan.

Since estimating is an attempt to predict a future event, it will never be done with consistent accuracy, and yet we often present our estimates to our stakeholders as if they were clear facts. Read the Complete Article

Which Is Better? A Budget with “Challenge” or a Budget with “Reserve”?

Which Is Better? A Budget with “Challenge” or a Budget with “Reserve”?
By Timothy Prosser

In the defense contracting world budgeting is typically done under a rigorous “earned value management system” (EVMS) that usually includes keeping aside 10% of the budget for use as a “management reserve”. This can then be doled out in bits and pieces as needed to fund changes in what needs to be done (“scope” in the project-organized world) and solutions for problems that arise during the course of business. It also allows people within the organization to cope with unexpected changes without feeling like they are endangering the project or organization when they have to ask for more funding. They all still have to do what they can to stay within budget, but it gives the appearance that upper management accepts that unexpected changes happen and are going to be reasonable in helping people dealing with them. Read the Complete Article

5 Tips To Help Control Your Project’s Budget

5 Tips To Help Control Your Project’s Budget
By Christian Bisson

Controlling your project’s budget can be challenging; there are many obstacles that can lower your budget’s health but there are many tactics you can use to keep it healthy.

Here a are a few tips to help:

  1. Reduce scope

    As simple as this may sound, we may be so focused on the client’s requests that considering to reduce scope skips our mind. However, often the scope includes lots of “nice to haves”, which means that your project could be just as successful without a few of the requested features .

    By identifying and removing those “nice to haves”, you can reduce costs and focus on what’s really necessary.

  2. Leverage past work

    Leveraging work from other projects can save a lot of time in a new project. This is often an overlooked strategy and for 2 main reasons:

    1. Lack of visibility of what’s been done: We cannot be aware of everything that is available within an agency.
Read the Complete Article

Agile Methodology – Agile Under a Firm Fixed-Price Contract (FFP)

Agile Methodology – Agile Under a Firm Fixed-Price Contract (FFP)
By John Nelson

In our first post on using Agile to develop better software and reduce risk, we discussed Agile in a general sense, talked about its origins, and covered the basic underlying principles.

Project Managers and development teams in today’s business world are becoming more and more familiar with Firm Fixed-Price contracts (FFP). They struggle to adhere to the philosophies of Agile while being confronted with customers and functional managers who want specific features and functionality and want accurate estimates up-front. Many of these customers already have (or believe they have) knowledge of Agile, but want to capitalize on the risk transference that FFP gives them. Having worked in such environments for several years, I have learned just how interesting these situations can be for Project Managers and development teams, and how the development path can be affected as a result. Read the Complete Article

The Best Approach To Estimation Is To Use More Than One Technique!

The Best Approach To Estimation Is To Use More Than One Technique!
By Kiron D. Bondale

A logical question when approaching any new project is “What is the best technique to estimate project effort or costs?”.

Anyone who has taken a foundation course in project management will have been exposed to a large number of estimation methods including analogous, parametric and three-point estimates.

On most projects, particular techniques simply aren’t applicable. For example, on a highly unique project, parametric estimation may not be feasible since there would have been no past history to develop rules of thumb.

However, on most projects more than one estimation method is viable, especially once planning activities are well underway and scope definition and decomposition are substantially complete.

A common choice is to utilize a single, bottom-up estimation method. Occasionally, this bottom-up method is performed using three-point estimates for those activities with which the team has limited experience or confidence. Read the Complete Article

7 Ways to Create a Budget for Your Project

7 Ways to Create a Budget for Your Project
By Tim Clark

There’s a tight link between project management and budgets. Preparing a project budget requires thinking through the project in detail before anyone starts working.

“Budget is a proxy for project planning.” This aphorism was a live-tweet of a talk given by Aidan Byrne, CEO of the Australian Research Council. In other words, when you finish laying out a budget, you should feel like you’ve walked through the entire project.

While projects can differ dramatically, there are some common strategies when it comes to writing budgets, such as: plan for the worst, identify where changes are likely to originate and watch those areas closely. And don’t forget the contingency plan – and a contingency budget – in case things go a bit haywire.

Here are 7 tips and practices for creating a budget that supports your project:

  1. The hardest project budget you’ll ever write is the first one.
Read the Complete Article

Estimating the Cost of Project Management

Estimating the Cost of Project Management
By Bruno Collet

Isn’t it ironic that we project managers regularly pressure teams to provide estimates but are often unable to estimate the cost of project management? Most organizations, even those reputed to have achieved a high maturity in project management, still apply a standard portion of project budget, typically between 10% and 15%, to estimate project management cost.

Properly estimating of the cost of project management is not just a good idea, it is often critical, for example when providing project management service to clients on a fixed-price basis.

Imagine we want to estimate the cost of project management activities for a project that’s just starting.

One way to estimate cost is by analogy. When used bluntly, analogy estimating can lead to the “standard” project management cost of 10% to 15% mentioned earlier.

Analogy estimating works when three conditions are met:

  1. The organization has a well-kept history of actual project management costs per project.
Read the Complete Article

How to Keep the Project’s Budget Under Control

How to Keep the Project’s Budget Under Control
By Jackson Bruno

Project Managers are faced with the pressures of keeping the project’s budget under control. This pressure is the result of organizations having a real need to deliver projects that are successful, and ‘Cost’ is just one of the many constraints that need to be monitored closely.

As a first step, it is important for Project Managers to actively participate in the process of determining a budget for the project, ensuring that all budgetary items have been covered (e.g. equipment, man hours, consultants, etc.) and that these items have been allocated properly.

A few more steps pertaining to a project’s budget must be taken to ensure a successful delivery.

  • Project Managers must create financial models that compare the amount of work that has been completed against expenditures, and most importantly, a model that can forecast the future cost based on the inputs that the Project Manager is receiving from team members.
Read the Complete Article

Top 4 Surprises That Will Blow Your Project Budget

Top 4 Surprises That Will Blow Your Project Budget
By Michelle Symonds

No matter how carefully you plan things, surprises always happen.

As project managers we need to ensure we are effectively managing our budgets and spending the money in a responsible manner whilst still delivering high quality results. Despite all the strategies and tools at our disposal, there are still a high number of projects that end up over budget, some drastically so, many of which have fallen victim to the nasty surprises our projects often present us with. Here are four of the most common things that project manager’s report as having completely blown their project budget.

  1. Reworking

    There is not much that can blow a projects budget in quite the same way as a rework can. Whatever the reason for the rework, doing the work all over again will invariably cost the same is it did to do it in the first place.

Read the Complete Article

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