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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

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 Tips When Estimating a Project

7 Tips When Estimating a Project
By Chrisitan Bisson

Estimating a project is a very important part of your project, and can often be taken lightly. Truth is, if you avoid having good estimates, you will likely have a hard time staying on budget, and during your project (or after), it may be hard to analyze why you are outside your budget.

There are some key tips that can help you with that:

  1. List what is being estimated

    Seems obvious at first glance, but bear with me. Listing what is being estimated is more than simply writing: Programming = 40h. If you review your estimate 6 months later, you will have absolutely no idea what was included inside that 40h.

    It is important to list each specific item of your project (home page, contact form, shopping cart, login,etc.).

    How detailed must you go? Detailed enough for you to be able to understand it in 6 months, but also, detailed enough to be able to estimate each item easily.

Read the Complete Article

How to Achieve Accurate Project Time and Cost Estimates

How to Achieve Accurate Project Time and Cost Estimates
By Paul A. Weber

What are Time & Cost estimates?

These are the project estimates in relation to how much time is required for your project. Cost is related to how much financial investment will be necessary for your project,

Why Time & Cost estimates are important?

I know you are thinking “This goes without saying”, but let’s explore this point anyway. Time and cost estimates are intertwined, because either one has a direct effect on the other. When determining the cost of a project, or a specific area of a project, time estimates are usually included, because time is literally money. Projects are not only cost determined based on material, but also according to the time estimated for project completion. This time is usually applied to the overall cost of the project because people get paid for the actually work they perform, but also the time taken to complete a task. Read the Complete Article

5 Tips for Efficient Budgeting Within Project Management

5 Tips for Efficient Budgeting Within Project Management
By Cora Systems

Organizations today are facing increasing pressures when it comes to their budgets around project management. There is a real need to only invest in a project that will be successful. Budgeting queries and benefit awareness should be forefront in the mind for the assigned project manager. How much is this project going to cost? Have all budgetary items been accounted for including man hours, equipment, outside resources etc. To sum up, can this project be delivered successfully within an assigned budget?

Budget distribution can determine the success of a project. Any project that is completed within the predetermined schedule and reaches the goals set should not be deemed a success without the project meeting its budgetary requirements. Therefore today, project managers need financial insight to ensure their projects don’t overrun its financial plan.

A few tips to keep in mind when managing your projects to ensure they stay within budget would be:

  1. Review and Forecast the budget frequently: By not examining the project budget forecast frequently can ultimately leave you in a position of no return.
Read the Complete Article

Estimating Is Often Helpful – Estimates Are Often Not

Estimating Is Often Helpful – Estimates Are Often Not
By Esther Derby

Recently, I tweeted, “Estimating is often helpful. Estimates are often not.”

Several people asked, “How can this be?” Let me say more, in more than 140 characters.

Estimating Is Often Helpful

  • Estimating helps when the process of estimating builds shared understanding among the people who want the work done and the people doing the work..
  • Collaborative estimating gives the best results. Diverse experience yields a broader range of perspectives and questions. Questions and perspectives build understanding of the what, why, and who related to the request. That’s helpful.

  • Group estimating reveals differences in knowledge and understanding. Finding those gaps early is helpful.

  • Group estimating surfaces assumptions. When we are aware of our assumptions, we can verify–or debunk– them.

  • When the group knows enough about the “what” to think about the “how,” they can analyze implementation. Working out implementation details reveals more assumptions, and generates more questions.

Read the Complete Article

How Accurate Is Your Actual vs. Planned Time and Costs?

How Accurate Is Your Actual vs. Planned Time and Costs?
By Peter Collins

With cost and efficiency dominating the corporate agenda in today’s constrained operating environment, the ability to compare and contrast planned versus actual time and costs provides professional services firms with greater visibility and tighter control of performance in billable markets where time is money.
By Peter Collins, director, Retain International

The ability to plan effectively is crucial for professional services firms operating in billable markets such as accounting, consultancy and law. But being able to allocate time and cost (of resources) with absolute confidence that financial and project targets will be met is difficult if resource planning tools and timesheet systems are being used in isolation, as they typically are today.

Timesheets provide an accurate view of the hours being billed at the end of each week or month, making it relatively straightforward to calculate the actual cost of resourcing a project and the revenue generated as a result. Read the Complete Article

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