How to Manage a Project

Control & Reporting

Additional Materials

Estimating Guidelines

  1. When to estimate, and who estimates
  2.  Developing Estimates
  3.  Some Rules of Thumb
  4.  Estimating techniques and definitions

1    When to estimate, and who estimates

Estimates are essential both to ensure that finance can be reserved for the project, but also so that the project manager has a baseline to control the project against.

Estimates will be revised throughout the duration of a project, but there are two main points where estimates are developed.

  1. During the drafting of the Project Brief an initial rough estimate of the effort required to complete the project should be produced.  This will help to assess whether the project is viable.  
  2. After the project brief has been signed off, more detailed estimates for the Project Plan.

Before the start of each major piece of work, review the estimates in the light of experience and to reflect changes in what is to be delivered.  

The following general principles may help:


2   Developing Estimates

First, ensure you know what is involved in the project - in particular what work will be involved. This information can be found in the project brief and project plan.

Next, consider what resources you will need. Take into account the scope and complexity of the project and the range of skills that will be needed. If it helps, break the tasks down into smaller tasks.

Then, establish what can be resourced internally, and what will need to be resourced by people with specialist skills, possibly including bought-in resource.

The final step involves estimating how much effort (i.e. the number of person-days of work) will be involved to complete specific project tasks and activities.


3    Some Rules of Thumb

On scheduling:
Don't under-estimate the following:
Don't ignore or neglect:
Make an initial estimates and then adjust to take account of:
Think about Contingency 
Contingency is additional effort/cost added to a project to deal with both risk and estimating inaccuracy. For most projects, the contingency should be:

4    Estimating techniques and definitions

Bottom-Up Estimating  
Bottom-Up Estimating involves estimating the effort involved to complete all the tasks and activities for the project, then adding it up to produce an overall value. This provides more realistic, detailed estimates than does a top-down approach.

Both top-down (see below) and bottom-up estimates can both be used for the same project. Using different estimating techniques will result in several estimates for the same activities. Comparing the estimates and understanding how the estimates were developed provides the best way to arrive at a final estimate for all activities.

Consensus Method (also known as the Delphi method)  
The idea behind the consensus-based approach is to get a small group of people that are involved in an activity to estimate the effort required for that activity. There will be a range of estimates produced based on the different viewpoints, level of interest, and experience of the people in the group.

The group are asked to produce estimates independently and then to explain the reasoning behind the estimates. The estimates can be discussed in the light of these explanations, and gradually, a single figure for the estimate can be agreed.

This discussion is best done in a workshop.

Expert Judgement  

Individuals with expertise in particular areas are consulted for estimates.  The Consensus Method can then be used to gain consensus where more than one expert is involved.

Historical Comparison  
Effort for a project as a whole can be estimated by direct comparison with actual effort for similar past projects. This technique is probably most applicable for smaller follow-on type projects, where the staff involved and system characteristics are almost identical.
Estimate = Past project actual effort x (Current Project Size/Past Project Size)