Project Schedule and Cost Estimating – Part 1

Project Schedule and Cost Estimating – Part 1
By Martin Webster

There can’t be a crisis next week. My schedule is full. – Henry Kissinger

Project schedule and cost estimating are very important activities. Among other things the schedule tells the project manager how long it will take to complete the project (or any part of it.) It’s also the basis for preparing cost and resource plans. But the problem with estimating is this. When formulating plans at the beginning of a project there is usually insufficient information to estimate with any degree of accuracy. Yet the project manager will face demands to know how long the project will take and how much the project will cost. Worse still the project manager is almost certainly expected to meet publicized delivery dates regardless of their legitimacy.

What do you do? Perhaps you stick a finger in the air and hope for the best or base your estimate on past performance and experience. Maybe you hire consultants to tell you how much and how long. Or you could conduct a little market research and talk to other organizations that have done something similar in the recent past.

What’s more, many things will conspire against the project manager and lead to false hopes. For instance, over-optimistic expectations of executive management, poorly defined requirements, a weak business case, skipping or rushing the planning process and project initiation, or delays mobilizing the project team. All of these things ultimately eat into the schedule plan and introduce delay – delay not accounted for when publicizing the completion date too early.

However, the answer to resolving this situation is not in estimating techniques (albeit these are beneficial and should be used.) Rather, the answer is in your approach to project management and your relationship with the stakeholders. Above all else maintain your integrity. Be open and honest and only commit to what you know the organization can deliver. In other words, understand what aspects of benefit viability – time, cost, and scope – are important to your key stakeholders and break down the project into manageable chunks. That is, plan in summary for the whole project and in detail for the next stage. Use a staged framework.

Thus the project manager needs to show to his stakeholders that the level of uncertainty is high until the business case and requirements are known. Early efforts should focus on understanding the problem the project intends to solve, how this is to be addressed, what benefits are to be had, and if it all stacks up and is worth investment. Therefore time spent developing the initial business case – that is, having a quick look – and preparing broad estimates of time and cost for the project plus more detailed plans and estimates for the next stage will bear much fruit. Progressively the accuracy of estimating will increase as more knowledge about the change or project is known. This is good. The business will have more control over what it is committing resources, won’t set unrealistic expectations or overextend its resources.

Martin Webster is Systems Support Manager at Leicestershire County Council. He has over ten years project and programme management experience. Martin’s professional interests include project management, leadership, and strategic information systems planning. Read more at Martin Webster, Esq.