Tools and Techniques of Estimating - Free

In the beginning was THE PLAN. And then came The Assumptions.
And The Plan was without substance. And The Assumptions were without form. And darkness was upon the face of the Workers. And they spoke among themselves, saying, 'It is a crock of s--t, it stinks.' And the workers went unto their Supervisors, and said, 'It is a pail of dung, and none may abide the odour thereof.' And the Supervisors went unto their Managers, saying 'It is a container of excrement, and it is very strong, such that none may abide it.' And the Managers went unto their Directors, saying, 'It is a vessel of fertiliser, and none may abide its strength.' And the Directors spoke among themselves saying one to another, 'It contains that which aids plant growth, and it is very strong.' And the Directors went to the Vice-Presidents, saying unto them, 'It promotes growth, and it is very powerful.' And the Vice-Presidents went to the President, saying unto him, 'This new plan will actively promote the growth and vigour of the company, with powerful effects.' And the President looked upon The Plan, and saw that it was good. And The Plan became policy. And that is how S--t happens.
Slip: Being first at the bar Float: Remaining Beer kitty Milestone: Paul buys a round
Results are promising : Turned power on and no smoke detected -- this time... Elements will be phased in Good, gradually as butperhaps a the software little more matures: detail here ? It's late!
es iqu n ch Te ing oject at s Pr tim r ie Es Se
Simon Harris, PMP, CGEIT, IPMA-D, P2
Logical Model Ltd 2010
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This is a complete training course in our project skills series! And for FREE if used for personal, individual development!!
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Pre-arranged commercial use removes this notice, gives you animated slides that build procedures step-by-step, also step-by-step exercise files, instructor notes, suggested time-line for delivery and support
For non pre-arranged commercial use (IE where you charge a fee) I hereby offer you a contract to use this materials, without prior notice in a commercial context at 1,000 per day or per copy which ever is the greater (thats an offer and notice of consideration, use will constitute acceptance and forms contract) as soon as I become aware of use I will start proceedings to collect fees due If in doubt Ask
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(c) Logical Model Ltd 2007 consult@LogicalModel.Net
Estimating Managers 2-Day Course Simon Harris, PMP
Poor Estimates Are Everyones Problem
Why is my poor estimate your problem?
4
Domestics
Some pages numbers are omitted it isnt an error its my means to insert pages later without renumbering everything afterwards
Cheese
I had to do something to earn my current Cheese Having Cheese makes me happy The more important that my Cheese is to me the more I want to hold on to it Change happens: the faceless they will (re)move your old Cheese Noticing small changes in my Cheese helps me anticipate change in advance & adapt to big changes when they arrive Smell the Cheese often to check for small changes The world changes, my Cheese is moved: If I do not change I will become extinct I did things last week. I had Cheese last week. If I do things differently next week I may not have Cheese Thinking about not having Cheese makes me afraid Being afraid stops me doing things differently I have to ask myself What would I do if I were not afraid When I stop feeling afraid I start feeling good Imagining myself enjoying New Cheese is the first step leading me to it
Inspired by Who Moved My Cheese by Dr Spenser Johnson an excellent 45 minute read
Cheese
Movement in a new direction helps me find New Cheese The sooner I let go of stale old Cheese the sooner I find New Cheese It is safer to search for New Cheese than remain in a Cheese-less state Old beliefs do not lead to New Cheese Beliefs only change when we believe that there is New Cheese to be discovered and enjoyed
The new ideas in this or any course need conscious effort to be understood
Worse!, it takes much more effort to put them into use
Examine your Old Cheese for mould ((problems with current working) Imagine your self enjoying your New Cheese (benefits of new practices)
Consider the steps to move from one comfort zone to a new one
Who needs to be involved, What actions, When & What is in it for them
Share your insights & FUD (fear uncertainty and doubt) in class
Discussing implementation challenges helps you prepare for action Gives comfort knowing others have been & are succeeding (and helps networking)
7 Promise yourself 1 action now, with a date. On your return to the office plan your intended achievements with a milestone each Friday till done
Lesson 0: Introductions & Logistics
Who Are We All?

Name, Role and Organisation: Telling others about yourself

Something about your current cheese
9
Exercise: Introductions
Please appoint a scribe & produce 2 flips charts, firstly. 1m each: Would 1 person record the details of each individual
Their name, role at work and years of relevant experience Shoe size, favourite colour and birth-day & month An adjective that describes how you feel about being here When everyone is done then stick First Flip-Chart-Page to the wall using blu-tac
5m: Secondly a group-wide Flip-Chart-Page capturing

As a group discuss What I want from this course to be of value to me is Record conclusions of the discussion on the second flip, either as a single consensus view, or multiple individual needs or any mixture of the two Transfer to the wall using Blu-tac
3m: Thirdly a Flip-Chart-Page capturing

Please discuss and record what ground rules should you and I agree to for the course this week that will maximise your chance of achieving your goal 10
Debrief: Introductions
What were the steps in the exercise Which ones gave you any: Discovery discourse and disclosure,? Any discomfort, disconnection, dislocation (confusion) ?
What have you learnt or are you learning? What variations might there be around
Context in which we use the new skill at work from classroom Process changes to account for different needs Outcomes required or achieved (intended or not!)
How does what we have covered relate to your problems & needs What actions and steps will you take to make use
Over what timescales & with whose involvement
11
Course Objectives: To Be Able To:
Create a working environment in which results achieved are matched to expectations

Nothing ever matches the estimate without monitoring & control in the execution phase
Manage those producing & working to estimates Assess & express balanced terms in the equations:
Work determines resource determines cost and duration Resource divided by duration determines work and cost Or any other mix of the constrained, controlled & consequential
Apply skills in sizing cost, time, resource, risk and uncertainty at varying levels of confidence
Estimate probabilistically
12
Route Map To The Objectives

Coffee Lunch Tea EOD-2 10:30 12:30
SoD Coffee
Lunch Tea
EOD-1
9:00
10:30 12:30
15:00
13
Path To Success
Day 1
Estimating
Introductions & Logistics What is an Estimate, Ranges and Planning reality Planning Concepts Estimating Approaches & Techniques Progress Tracking & Feedback loops
Things to count & advanced parametric models Non-numeric Estimates Experts & Overcoming the Problems With Them Estimating for Situations with Less Than Certainty Adding & Showing Uncertainties
Day 2
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End
Projects run successfully when they use controls effectively Our controls include your feedback
I try hard not to offend, bamboozle or bore you. If you have feedback at any time please advise me in what ever way is comfortable for you so I can act
EG: Comment, in person in class/ at a break/ at the end of day or Add a note to one of the Ground-Rules flip-charts or Blu-tac a note or stick a Post-it to the back of the training room door
While comments on the end of event form are always welcomed and acted upon they are too late to make the event better for you
If I dont know its unlikely I will fix it, If I do know I can at least try Eg Course pace, topic depth, time given each topic, heating/ lighting, Exercises & debrief, Anecdotes & jokes, Catering or parking, Course notes and pens, etc etc etc without limit
Chapter Notes & Actions to Implement

15
Lesson 1: What is an Estimate?
17
Estimates Are Not Guesses

What is the difference between a guess and an estimate? What are the components of an estimate? People rely on estimates
Short-term: pride in a good job well done Long-term: keep your job Final analysis: return value to the shareholders
An estimate is defensible at all times

Open to re-estimation when basis of defence changes
The
greatest of all gifts is the power to estimate things at their true worth Frabcois de la Rochefoucauld 1613-1680 (c) Logical Model Ltd 2007 consult@LogicalModel.Net
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Content Of An Estimate ?
Scale Basis of quantification

Perhaps including sensitivity to factors in basis
Assumptions
Factors used in derivation that are less than 100% reliability
Markers on the scale for optimistic & pessimistic assessment

A range: may be accompanied by a Confidence Level
There
is no such thing as absolute worth. You can only estimate what a thing is worth to you Charles Warner 1829-1900 (c) Logical Model Ltd 2007 consult@LogicalModel.Net
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Use of Estimates
Who needs estimates ? For what purposes do we need estimates ?

In order to quantify project factors and product characteristics
Critical Success Factors
But only in support of decision making!

Basis of our plans & co-ordination of activity with others Targets for our processes and products
Assessing viability, rationing resources & coordination What qualities make an estimate good (or bad) ?
20
Accuracy v. Precision
What is accuracy?
Truth, relationship between assertion & facts
Inaccurate estimate are useless

Agreed? How can we insure accuracy?
What is precision?
Real world estimates must use a range & confidence level
21
Achieving Accuracy
Estimates are uncertain

Educate stakeholders to understand range & confidence Educate stakeholders to understand continuous elaboration
Promises (IE certainty) WILL include a premium for risk

Someone must make visible provision for uncertainty somewhere in the projects baselines
Hidden contingency cannot be managed and is habitually wasted Make uncertainty explicit and place allowances under control
Quote & justify the budget, the confidence level, the contingency provision and reserves separately Establish the process for refining estimates over time
Iterative application of techniques with feedback loops
22
Licensed for individual use without fee. A commercial license (License@logicalmodel.net) removes this note: Please report unlicensed commercial use & share in fees levied Probability
Early Estimates: Wide Ranges Engineering Reality
Design/ Contract Requirement/ Heads of Agreement

Business Winnings Reality?
Concept/ RFP, ITT Quality of Scope Definition Quality of Estimate Width: Height
23
Planning Horizons
Monitoring points based on planning horizons

Often impossible to plan the whole project in detail due to uncertainty about future work, changing environment and business conditions
Starting up a task Plan the planning Investigation Technical work Run to the detailed plan Technical work Run to detailed plan Technical work Run to detailed plan
Creates the overall plan. Complete but detail decreases with time to horizon The horizon is not far off at this point in the project! Detailed Plan Short time horizon
Project Plan
Detailed Plan Short horizon Refine overall Detailed Plan Short horizon Refine overall
Updated Updated Project Plan

Update overall Plan to closure
Initiation Stage
1st Specialist 2nd Specialist Stage Stage Management Stages
3rd Stage
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Rolling Wave Planning

As detailed as is possible with what we know today

Planning Horizon Far Term Activities
Time Now
Planning Packages
Work Actuals packages Near Term Activities

Named resources Detailed tasks Final/Definitive Estimates Generic resources Activities Indicative Estimates Generic resources Phases ROM Estimates
25
Rolling Wave Planning After a Stage Boundary

Far Term Activities Planning Packages
As detailed as is possible with what we know today

Time Now Planning Horizon Work packages
Actuals Near Term Activities

Named resources Detailed tasks Final/Definitive Estimates Generic resources Activities Indicative Estimates
26
Uncertainty Decreases As..

Closer in time and / or better understanding (EG after Design or we have prior experience)
Width of range (peak height) matches understanding
Near term and well understood task Far term and good understanding Near term and poor understanding
Probability
Any Level
Estimate
Cost, Time
27
What Is Different In Each Quadrant?

Increasing Uncertainty
Unskilled, Inexperienced
Experienced & Skilful Clear Goal

What are the characteristics of each quadrant? Risks, Rewards, Controls, ?
Unknown Goal Where ever we are going it is away from here
Increasing Uncertainty
28
Project Control Assessment

Score your current project or programme

0 Purpose Goals Resources Schedule Process Technology Resources Organisation Customer Decisions Decision making Team Clear Stable Adequate Flexible Tried & tested Familiar Dedicated Project One Swift In Team Collocated
10 Un-Clear Changing Scarce in-Flexible Novel Unfamiliar Shared Functional Many Slow Out with Team Distributed Project SH*T Factor
Score _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ ______
The
least used and most valuable phrase is I dont know The mostconsult@LogicalModel.Net subsidiary phrase is Im currently researching it important (c) Logical Model Ltd 2007
29
Exercise Estimates
Exercise users guide 1. Appoint a Project Manager (Birthday nearest to today), Scribe next nearest Bday & a Reporter (3rd nearest)
PMs job to deliver on time! Reporters job to tell us the results be ready to tell us more than just what is on the flip-charts
Exercises are designed to make you examine your current working practices. You should feel some dislocation, discomfort and discovery during them
It is OK (expected even!) to be confused during an exercise BUT NOT OK to still be confused AFTER the debrief!
During the Debriefs we will always explore any confusion, all questions & any loose-ends that you raise in exercises
30
Status Quo
Step: 3 minutes Brainstorm to a flip-chart a list of Improvements that we want to achieve in our estimating performance Step: 5m Record to a 2nd flip-chart the groups brainstorm under the title Everything we currently know, or know we dont know about estimating
Record topics you know of within estimating, eg techniques youve heard of (whether used or not), different approaches, skills & other relevant items that you can think of
Step: For those finishing swiftly - Mark any techniques identified for how much use you make of them (Eg always, only if relevant, rarely, never) plus how effective they are
31
Debrief ?
How did the group perform?

Purpose of the step timings?
Did you make any discoveries ? Feel any discomfort? Are you left with any dissatisfaction?
They are often linked out of our comfort zone No gain without pain chance for some gain may evoke feelings of discomfort Are current problems within current knowledge & practices?
What have you learnt about

Trouble creating estimates (before the estimate) And . After the estimate is provided
Relevance, Application & Adaptation

32
The new ideas in this course (or any learning situation) need conscious effort to be understood
It takes much more effort to put them into use
Examine your Old Cheese for mould (problems with current working) Imagine your self enjoying your New Cheese (benefits of new practices)
Consider the steps to move from one comfort zone to a new one
Who needs to be involved & what is in it for them What actions, by whom & when
Share your insights & FUD (fear uncertainty and doubt) with the class
Discussing implementation challenges helps you prepare for action Gives comfort knowing others have and are succeeding (& Helps networking)
Promise yourself one action now, with a date. On return to the office plan weekly achievements with a milestone each Friday till done

33
Lesson 2: Planning Concepts

Context for the generation of estimates
34
Context for Estimates

Estimates are used to create plans that realistically reflect work to be done
Estimates are only meaningful when you know the process that will be applied to achieve the result
Iterative step: process estimate reassess process
Plan is a process map
How are plans created?

Review of the steps in planning
Consideration of usage comes later when we look at feedback loops

35
Development and Maintenance of Project Baseline

Needs or Objectives Needs or Objectives Strategic Risk Strategic Risk Deliverables Deliverables Bill of Materials & Quality Description Bill of Materials & Quality Description
Scope Estimating
Schedule Estimating
Dependencies Dependencies
Task List (WBS) & Task List (WBS) & Work Assignments (OBS) Work Assignments (OBS)
Resourcing Resourcing
Schedule Baseline Schedule Baseline
Scope & Responsibility Scope & Responsibility Baseline Baseline Response to Response to Tactical Risk Tactical Risk Finalised Finalised Cost/ Time/ Scope baselines Cost/ Time/ Scope baselines
Monitoring, Monitoring, Tracking & Tracking & Control Control

Cost & Resource Estimating

Cost Baseline Cost Baseline
36
Scope: Project, Phase & Work-Package

Project Phase Boundaries
Need
Deliverables (Products)
Work-Packages
Satisfied need
Customers (& possibly the Boss) view of scope is

All the deliverables (NOUNS) All final deliverables (eg services and physical items) All intermediate deliverables (eg tasking orders, design drawings) All management deliverables (eg progress reports) & quality activity
37
ALL the Products = ALL the Tasks

Crucial first step

Identify all results: deliverable and projects internal deliverables
Include temporary or throw-away deliverables

Prototypes, mock-ups, test-rigs, stubs & drivers, scaffolding & jigs
Include management and quality products

Risk and issue reviews, assumption analysis, communications plans, resource acquisition Progress reports, lessons learned & problem diagnosis
Work (i.e. Tasks) derived from product specifications

Include specification of the Grade or Quality required
38
ALL the Tasks = ALL the Effort

Every product (noun) has a lifecycle of tasks (verbs) to create it Include all tasks to do the work
Include all tasks: raw work plus defect creation & defect prevention
Include all tasks to check the work is OK

Include all tasks for defect detection
Include all tasks to report the status Include all tasks to rework defects & errors
Include all tasks for defect and error resolution & retest Include all tasks for repair to reputation & relationships
39
Work Breakdown Structure

Project
Need
Product
(satisfied need)
BS Quality
Functional NonFunctional
Definition of all the Definition of all the work in the project work in the project
Specialist
Process Standards Product Standards
Management
Ditto
Hierarchy down to level needed for planning and control Hierarchy down to level needed for planning and control 40
Measuring And Estimation Of Quality Attributes

Text, diagrams and specification languages
Functional specification is common and relatively easy Good quality specification is rarer & more important for determining cost & schedule
Scale & tests to measure Best required & worst acceptable Current & target value (& achievement date) Best possible (State of the Art)
Convergence of Scope & Quality

Captured in the WBS dictionary
41
Example: I Want A Fast Car

How much should we budget & schedule for this project ? Detailed Requirements: Boy racer impressing his friends on the street
Scale: Test: Worst Acceptable: Target Best Required State of the Art Acceleration Time taken to achieve 60 mph from standing start 8 seconds 5 seconds 4 seconds 3.6 seconds
42
Example: I Want A Fast Car

How much should we budget & schedule for this project ? Detailed Requirements: Attempt on World record for wheeled vehicle
Scale: Test: Worst Acceptable Target Best Required State of the Art Miles per hour Maximum average speed achievable over measured mile 760 mph 800 mph 800 mph 750 mph
43
Quality Description WBS Dictionary
Provides detail of what is to be produced by the work-packages

WBS dictionary is progressively completed and refined as more is established during planning & execution
Contents
Description: Establish common understanding Link to all process standards to be applied during execution Criteria to be used for product acceptance Scope verification dimension of the work-package Control details Eg.
Estimates for all aspects of the work-package: dates, costs etc Cost-codes for correct booking of work & materials to accounts and for reestimating, refining and creation of estimating books
44
Tasks in PDM/ Network Diagrams

Project Project
Deliverable 1 Deliverable 1 A A B B C C II L L D D
Deliverable 2 Deliverable 2 E E F F J J
Deliverable 3 Deliverable 3 G G H H K K
Only tasks at lowest level of WBS are used in network dependency model Estimated effort divided by resource = duration Duration plus dependencies = Schedule
45
WBS + Resources & Schedule = Cumulative Cost & BAC
st, it will all co what l ly w e know t the Fina escale: wha tim like. over what -flow looks sh be negative ca w must also sh-flo can positive ca The iness Case e Bus Vs elled so th mod CFs and NP gful D tain meanin con
46
Lesson 3: Estimating Approaches and Techniques

Context for the use of estimates
47
Approaches and Techniques

Always use a combination to cross-validate 1 with another Approach estimating either top down or bottom up
Cross-check one with the other
Generate the values using analogous and parametric techniques

Answers may be quick but rough or higher precision later
Gather data from all sources and pass to experts and verify with peer-groups
Qualify assumptions and detect biases
Always generate three point estimates

Optimistic, Pessimistic & Most frequently occurring Calculate budget and confidence levels
48
Estimating Approaches
Top-down v. bottom-up Top-down: If it is 1m thenlooks like 300k for B, OK? Bottom-up: Looks like B is plus plus
1m 400k
Deliverable A Deliverable B Component B.1 Project
200k
Deliverable C
100k
Deliverable D Component D.1
Component A.1 Component A.2 Component A.3
110k 125k 75k
Component C.1 Component C.2
Component B.2
Component B.3
w St eakdo rreakdown rk B Component D.3 Component B Woork C.3 W
uct Strruct re nComponentuD.2
ur e
49
Top Down Versus Bottom Up

Strengths and weaknesses with both Top-down

Produced early Often created by analogy with previous efforts
Aided by estimating histories (Documented details of last time)
Lacks precision, based on little concrete detail Cheap, quick, simple, simplistic,
Bottom-up: Increased precision

Not available early in project More expensive and time-consuming to create Capable of greater precision Project uncertainty based on uncertainty described per task
50
Estimating Techniques
Analogy
Extrapolation of previously observed results to a new situation All estimating is analogous (otherwise it would be a guess!) Identify similarities and differences between historical data and current context
Parametric
An analogous estimate that uses a mathematical formula
Leads to systematic errors bad news Easily fixed once detected hardly good news Enabler for continuous improvement in estimating processes
Sometimes known as an estimating relationship Research shows parametric models are more reliable than their creators!
51
Parametric Estimates
How long does it take to cook a chicken ?
What assumptions or facts are material to the estimate ?
How long does it take to analyse a requirement, design a galley, bore a 40mm hole through 20mm plate steel ?
Estimators
are not modest: if its huge they say so. Nor are they shy: if its tiny they say so (c) Logical Model Ltd 2007 consult@LogicalModel.Net
52
Analogous Estimates
How long does it take to cook an ostrich ?
How could we reduce our uncertainty ? How can we express our uncertainty ?
Estimators
do it in groups: top down and bottom up - PM Proverbs (c) Logical Model Ltd 2007 consult@LogicalModel.Net
53
Exercise: Estimate the following

Ensure that your estimates are accurate

The weight of the SS Titanic
54
Debrief
Now you didnt get any incorrect did you! What were your steps to solving them Suppose you were to do it again (apply now)
What would you repeat or try to do differently next time
Any dj vu with daily life Imagine that you have applied these ideas
What steps did you take and who with? What did you have to adapt in the idea or the people
What have you learnt?

55
Lesson 4: Project Tracking & Feedback Loops
56
Use, Not Creation, Is The Issue

Estimating troubles are more in the usage than the creation

People create estimates, people use estimates
Intention and action are not the same

Deadlines drive action
If it wasnt for the last minute nothing would get done Nothing gets done until nothing gets done
Estimating requires multiple feed-back loops

Record initial estimates & regularly contrast actuals & estimates Review up-coming estimates for same sensitivities Re-estimate periodically & amend analogies or parametric models
Must link to tracking, should link to incentivisation

If 3 days work took 10 days last month then how long do you expect it to take next month? Both links apply!
57
Improving The Individuals Estimating Capability

Quickest is only best if 1) accurate & 2) precise enough Good estimates are an expensive investment Not EVERYTHING demands BEST estimates, but some things DO
Allow time for estimating activities
Establish (non-financial) rewards for good estimates

Recognition Choice pieces of work The economy punishes the company for poor estimates
Should there be personal consequences for poor estimating?
Estimating skills require explanation, coaching, learning

Cascade what you know through the teams
58
Improving the Organisations Ability

Organisational ability to estimate improves with historic records

Maintain a metrics database
QMS defines standard work instructions & procedures

Standard tasks = standard durations = standard costs & resources
Standard BS defines products, phases, responsibilities

Budget distribution curve has higher & narrower (less variation) Natural basis for creation of metrics database Provides architecture for recording estimates and actuals Standards in the QMS and WBSs in the PMO form the basis of an estimating database
All adds up to competitive advantage

59
Corporate Development Model

Licensed for individual use without fee. A commercial license (License@logicalmodel.net) removes this note: Please report unlicensed commercial use & share in fees levied Probability
Decisions made on sound basis & Decisions made on sound basis & even in anticipation of affects even in anticipation of affects across all work areas across all work areas
Increasing Maturity Increasing Maturity
Level 2-5
Estimate
Probability
Cost, Time
Improved Performance Improved Performance
Estimates match reality & Estimates match reality & are therefore usable are therefore usable
Cost, Time
Level 1
Estimate
Probability
Plans reflect reality Plans reflect reality
Reality does not Reality does not match estimates match estimates
Level 0
Estimate
Cost, Time
Mismatch between Mismatch between plans & reality plans & reality 60
Sources of Misestimating
Impact of a 10% increase in work at each boundary? Minor changes outside of Change Control Plan
Cascade into major unexpected impacts Design/development delays Parts lists changes Manufacturing plans/methods
Project Need
1 0 0
1 1 1 2 0 1
1 1 1 4 6 3 36 1
Phase Boundaries Satisfied need
61
Scope Verification Occurs Throughout The Project

Project Need Phase Boundaries
100 90 81
72 63
Satisfied need
54
? If outcome of each of 8 stages is 90% correct, how cumulatively correct is end product?
What do we need from our internal acceptance process?
62
Recognising Progress
If it isn't finished weve made no progress

0-100 rule: While WIP only the costs are recognised Task should not span reporting periods
When you start & end in different periods claim 50% of the credit
50-50 rule (and variations for 20/ 80 etc)
% Complete: tasks are objectively measurable

999 bricks laid out of 1000
Milestone based percentage complete

Earnings are pro-rata but capped until a review is passed eg Preliminary design review = 15%, Critical design review = 50% Test Readiness review = 60%
Tasks that are managerial can use apportioned effort

63
Rules for Measuring Performance

Plot the process in a flowchart (or other plan)

Know what information the data provides
Define exactly how to collect data for the indicator and how to make the computation Learn to understand variation
Only management can improve a controlled process Use the numbers to help people improve, not to judge
After Gathering..Analyse
Most important part of estimating, monitoring, correcting
Plan do check act !
64
EV an Estimating Tool: Project Canine

IEAC CPI EAC (PMs Estimate)
k
170 160 150 140 130 120 110 100 90 80 70 60 50 40 30 20 10 0 0
Month 5 Month 5 BCWS: 50k BCWS: 50k ACWP: 60k ACWP: 60k BCWP: 40k BCWP: 40k
Performance Index: Self-adjusting Parametric model for Performance Index: Self-adjusting Parametric model for estimating project outturn estimating project outturn PI ==Plan //Achievement PI Plan Achievement Prediction ==Work_Remaining //PI Prediction Work_Remaining PI
ACWP curve
BCWS Curve (PMB)
BAC
VAC
SV BCWP curve 1 2 3 4 5 6 7 8 9 10 11 12
CV
13
14
15
Months
65
Exercise: EVA
You have been commissioned to build a stained glass window: You have a helper, you can each complete 10 panes per day. There are 2,000 panes budgeted at 15 each Day 42: panes cleaned and installed 1,100 cost to date is 8,400
Calculate EVM, and graph the results. What day is forcast end date? What is FCAC BAC = BCWP = SV = BCWP - BCWS = SPI = BCWP / BCWS = EAC = BAC / CPI = BCWS = CV = BCWP - ACWP = CPI = BCWP / ACWP = ETC = EAC - ACWP =
66
EVA Graph of Stained Glass Window

Day42
30k
SV = SPI = d/ CV = CPI = EAC =
= = = finish day = = =
BAC = Durtn =
20k
10k
10
20
30
40
50
60
70
80
90
100
110
67
Lesson 5: Things To Count

Not everything that counts can be counted Not everything that can be counted, counts. Einstein
68
Base Values Vs. Derived Values

How big is this room? To decorate it how much paint & carpeting is needed? To commission it how much air-conditioning, lighting & furniture is needed? Which are basic?
Which answers are derived? Did you have the skills needed to derive all?
Conclusions?
69
Basics
By trade
Software
Number of use cases/scenario scripts Weighted Methods per Class (WMC) Depth in Inheritance Tree (DIT) Size Size, Complexity Size, Complexity Complexity Complexity
Size
Electrician
Phases in the supply Different types of connected device
Number of devices in each type
Physical accessibility of cable runs
Complexity
By Phase (E.g)
Initiation
Number of stakeholders Political dimension 70
Deriving Schedule
Once the basic work required is known

Insight into how the work will be conducted Insight into who will do the work Knowledge of the dependency between tasks
Duration: Time taken to deliver the effort or work

Duration = ( Work * %Productivity * %Availability ) Set specific resource availability & productivity at known rates
Longer term planning requires generic resource assessed at organisational norms

May need a multiplier/ divider when adjusting for actual assignment
71
Units To Estimate In
1st estimate un-derived factors eg raw work (or effort)

Build a wall 46 high * 86 long * 2 courses wide, 8 * 4 bricks, Flemish bond Therefore 12 bricks high, 12 bricks long * 2 = 288 bricks Write a 1000 lines of code, Write 450 item Bill of Materials, 25 members of customer staff to interview for requirements, 100 bulk-heads to penetrate
2nd translate to duration according to resource allocation

Work / resource = duration. EG 10 bricks per brickie per hour 288 bricks 30 bricks / hour & 2 brickies = 4.8 hours Durtn 1000 loc / 20 loc/hour * 15 hours/week (ie 50% allocation) = 3.3 weeks Generic resource at standard delivery rate EG 16dpm
72
Encapsulate Expert Knowledge

Models available in different industries

Eg Construction, software, even epidemiology/ disease control! EVM !!
Factors they formalise must be understood in any estimating activity

Use the concepts to appreciate what matters for producing high-quality estimates Understand your own cost drivers Create your own spreadsheets Spreadsheet always better than a mental model
Audit trail and tracking of results generates huge improvements in estimating capability
73
Models in a Wide Range of Fields

74
A Document Metric: Gunnings Fog index
Robert Gunnings Fog Index

Parametric model to estimates the reading age required to comprehend a piece of written English
Process
Select a sample Determine the average number of words per sentence Determine the percentage of hard words (3 or more syllables that are not a) proper names, b) combinations of easy words, or c) made three syllables by suffixes such as -ed, -es, or ing) Add the 2 factors and multiply by 0.4
How does this help a to build a nuclear reactor to time cost & importantly scope?
75
Complexity Measure for Procedural Software

Thousands of Lines of Code (Non Comment Lines of Code )
Size measured in Lines of Code

KSLOCs NCLOC
McCabe Cyclomatic Complexity

CC V(g) = E - N + p E = number of edges of the graph N = number of nodes of the graph p = number of connected components 1-10 a simple program, without much risk 11-20 more complex, moderate risk 21-50 complex, high risk program greater than 50 un-testable program (very high risk)
Cyclomatic Complexity Risk Estimation

76
Technical Complexity Assessment

77
What Quantities Do We Estimate

Step 1: 1m Form-up into pairs or threes with those adjacent to you Step 2: 3m Brainstorm as many factors as you can that should be / could be estimated in your work-load
Eg Electrical terminations
Step 3: 5m Sort the factors into a list of those that are basic to your work and those derived from other factors For the derived suggest the derivations
A starter basic factors could be keel length or task duration A starter derived items could be miles of cable or task duration Be sure to DESCRIBE each sufficiently to justify your opinions
Many items could be in either/ both category: explain 78
Debrief
Visualise the steps you used here

Which ones can your recognise have some parallel at work Imagine the steps that dont yet have a parallel
What would they look like in use in work? How relevant & useful are they? How easily implemented and accepted by the team, the boss and the customer
What variations, adaptations, omissions and inclusions might you need to make?
Learnings: What to estimate

Any variable of project work or product capability E.G Contract Profit, Staff availability, Efficiency, Effort & skills required, Risk impact, probability event horizon, Affect of changes on plans, Assessing recent progress achieved Cost of ownership, MTBF/MTTR, Speed of operation, Response times Operator errors per 000 operations, 79
Lesson 6: Non-numeric Estimates
80
Ordinal Estimates
Customer satisfaction
Does 19.6%? 72.8% 82.7% help and is it actually meaningful?
What is minimum acceptable customer satisfaction level? Pseudo-numeric estimates may be translated to an ordinal number 1st, 2nd, 3rd etc
Tells us RELATIVE and sequenced data not absolutes Bob was 1st, Bill 2nd Could be that Bob ran 337.23 Bill ran 337.24 or 4days 8hrs 9 18.6 or 3yrs Each level needs a description to be usable
81
Exercise : Creating an Impacts-Scale
We often have to estimate something ordinal like Customer Satisfaction, or Carpet durability or Risk probability which might use a scale such as VeryHigh, High, Fairly-High, Medium-Plus, etc Imagine something you have to estimate that isnt measured in metres or kilos Step 1: 3m: Decide on something you need a scale for
Take an ordinal scale and label (say) 1 to 10 Assign representative statement to the numbers
Step 2: 10m Add labels to levels 1 through 10 Example

10 7 6 3 2 1 Project Cancelled Loss of 100,000 No Perceivable impact 82
Debrief
Which steps were easy to assimilate? What do you feel is most / least comfortable? dj vu with daily life
Adjustments to make next time?
What would you vary if doing again? Maybe in a different context?
Suppose (apply and adapt)

Was it, or when will it be relevant to work?
Easy to take back to work? Hard? Impossible? Irrelevant?
Learnt
Who will need to do what to achieve application?
83
Risk Assessment Matrix

Health & Saftey Environment Reputation Long term Multiple wide-spread Deaths damage Death or Localised Injurys long term Widespread short term Injury National Outrage Local Outrage
Financial Loss
Qualitative
< 1 in 10,000 Extremely Unlikely
< 1 in 1,000 Very Unlikely Crisis High Crisis Medium
<1 in 100 <1 in 10 Unlikely Crisis High Crisis High Possible Crisis High Crisis High
> 1 in 10 Likely Crisis High Crisis High
> 100m >10m
Crisis Catastrophic Medium Crisis Crisis Low
Time off Short term work localised Easy CleanFirst aid up Complaints
Regulatory Censure >1m Local Media & Customer impact >100k >10k
Severe
Low
Moderate High
Unaccep Very High table Very High
Moderate Low
Low Very Low
Low Low
Moderate High Low
Moderate High
84
Higher-Order Drivers for Project Estimates
PESTLE
Political Economic Social Technical Legal Environmental
85
What feedback do you have/ How do you want to provide it? What are your FUDs
The instructor can raise topics as a class discussion if you advise
Promise yourself at least 1 more dated action to implement an idea
Your investment here is only worthwhile if you plan & act to grab the benefits

86
Lesson 7: Experts And Overcoming The Problems With Them
87
Expert Opinion: Source Of Data

Only source of an estimate is prior experience - expertise

Anything else is a guess
Process
ID right individuals Prepare by researching Interview to agenda Qualify & quantify data Build a model
Either DIY or you must ask someone else Asking is a fairly easy way to obtain estimates
Simple to conduct Formal or informal Works with groups or individuals Applies to all estimable quantities
Build workarounds for the pit-falls
88
Problems With Expert Opinion

Pitfalls
Experts have biases
Based on what has happened in recent past NOT what is probable
Some experts are hard work to extract info from

Requires they have the time & inclination
Hard to assess good v. bad opinion Relies on accurate description of the problem Expert may have difficulty seeing wood for trees Expertise & experience may not translate well to current need Difficult to know how to handle divergent views Requires interviewing (questioning & listening) skills
How do you test an experts estimate?

Test against another experts opinion!
It is useful to know when the experts disagree (c) Logical Model Ltd 2007 consult@LogicalModel.Net 89
Gosh is that the time!?...

One theory states that
Duration = Work / Resources

Reality says
Duration * Resources = 90% Work

Parkinsons Law
After the work is 90% complete then
2nd period of equal D * R might = W

90
Successful estimating requires psychology
Psychology
Student syndrome
When the time is too long we waste it at the beginning
If I say 5 and I take 4?

If I say 5 and take 6? Ill say 6 and keep my mouth shut when it is 4
If you expect to start after me, on Wednesday & Ive done my bit by COB Monday? If I dont ask are you on schedule??
91
5 + 5 = 13
On the way up every piece of work has arbitrary padding added

At the top the padding is arbitrarily stripped out Result: estimates lack reality & transparency
Why do we do it?
This IS one of *the* problem with estimating
To prevent both stupidities: Create

Best case & circumstances to achieve it & likelihood Worst case & circumstances to suffer it & likelihood Most frequent outcome (most likely) & likelihood Calculate the as likely as not (50%) case
92
Biases
Overconfidence
Piece of cake, no problem Harder the task more pronounced the overconfidence
Over prudence
Padding when real or imagined consequences exist
Confirmations
Look for supporting evidence and ignore contradictory facts Option stopping: stop looking when point proved
Anchor
The first number you say is the ball-park Ill stay in
93
Delphic Oracle: Concept

An iterative technique using the skills of many people to converge on the best estimate available
Typically converges in 2 to 3 rounds or shows polarised views Underlying assumptions exposed
Allows the PM to assess how fair estimates received are Variations between estimators will be traceable
To differing views about assumptions To differing (flawed?) estimating processes To differing view of the product creation process
Needs access to experts

Works well via eMail
94
Delphic Oracle: Process

Process 1. Supply available information to estimating panel 2. Request each expert estimates separately
Recall that an estimate comprises scale, range, driving factors and known facts, assumptions plus the estimating basis
3. Gather all estimates, collate and circulate 4. Optionally: Participants discuss estimates 5. Each expert amends estimates as they think fit 6. If range within estimates un-acceptable return to step 3 7. Otherwise record estimating range & confidence level
95
Exercise: Delphic Oracle

We need to recruit a Senior Tiddly-winks coach to the after work social club After discussion the tasks have been identified and are listed below Individually estimate the duration of step 1 below
1. Draft, agree & place job ad ( Club Chair, Team Captain, HR rep ) Ad to be placed in specialist publication. Copy date 2 weeks after last issue Publishing lead time 4 weeks from receipt 2. (Milestone) Closing date for applications 3. Filter applications for short list ( PM ) 4. Write to invite to interview ( HR rep ) 5. Write to thank failed applications for interest ( HR ) 6. Hold 1st Interviews ( Captain & Chair ) 7. Hold 2nd Interviews ( Captain & HR ) 8. Make Offer ( HR ) 9. (Milestone) Candidate coaches 1st session 96
Debrief
Learnt Felt Steps Relevance Use Adaptation Imagine using this techniques
How does it feel? What are the implementation challenges
97
1.
What needs recapping? Any feed-back or FUDs to discuss? Note 1 (or more) promises to yourself to realise benefits from our investment Outcome sought
Participants & WIIFT Actions & Timescales
2. Outcome sought
3. Outcome sought

98
Lesson 8: Estimating For Situations With Less Than Certainty
99
Confidence
What is confidence (or uncertainty) How do you express confidence
How do you calculate it !?
100
3 course Dinner, with wine for 10

How confident are you?

1. Your budget is 30 2. Your budget is 60 3. Your budget is 90 4. Your budget is 120 5. Your budget is 150 6. Your budget is 180 7. Your budget is 210 8. Your budget is 240 9. Your budget is 270 10. Your budget is 300 11. Your budget is 330 12. Your budget is 360 13. Your budget is 390 14. Your budget is 420 15. Your budget is 450 ___ 0%_ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______
16. Your budget is 480 17. Your budget is 510 18. Your budget is 540 19. Your budget is 570 20. Your budget is 600 21. Your budget is 630 22. Your budget is 660 23. Your budget is 690 24. Your budget is 720 25. Your budget is 750 26. Your budget is 780 27. Your budget is 810 28. Your budget is 840 29. Your budget is 870 30. Your budget is 900
_______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ __ 99%_
State Assumption & Constraints Plot on following axis 101
Confidence Over a Range?

Confidence doesnt change 1:1 with increasing budget

Cumulative confidence typically follows an S curve Incremental confidence typically a skewed bell shape
Confidence 100%
0%
30 per interval
30
120
210
300
390
480
570
660
750
840
900
102
Confidence
How confident are you the budget/ schedule will be enough ?

100% ~95% 75% 50% 25% 0% Too risky! Resources (eg days) Budgeted Wastefull?
103
~80%
Cumulative Confidence Almost a sure thing!
Good chance of this May achieve it this ~20% quick/cheap
Incremental Confidence
2pt v. 3pt
2pt all that is required if we know the shape of the curve and that it is symmetrical
Just the limits: Minimum and Maximum
ML & Avg & Middle
Min
Max
If the curve is skewed 3pts are minimum required

The limits and the peak (Best, Worst and Most Likely or Mode)
ML
104
Three Point Estimates

Take an average with most likely more heavily weighted ( Best + Worst + (Most-likely * 4) ) / 6
Mean (& mode & median)
Most Likely (highest point) & Middle & the Average value More likley Best we can hope for
Revised Most Likely & Middle Where is revised 50-50? Simple Average will ignore MOST likely 50% 50% 95% 5% More likely 80% 20% Worst case
Common
50% 50% 20% 80%
Budget plus a 1 sixth Budget plus 2 sixths

105
Budget Allocation
What we should budget is based on required confidence

50% or expected = ((Best + (Most likely * Weight) + Worst) / # terms) Weighting normally 4 so # terms normally 6 E = (Best + 4ML + Worst) 6 80% = 50% + (Worst Best) 6 95% = 50% + (Worst Best) 3 e
When allocating the task give the minimum of ML & e

6 SD
1SD
106
Exercise: 3pt Arithmetic

Best + Worst +(Most likely * 4) / (6) (Worst Best ) / 6 Try these Try these
B B ML ML W W = 10 = 10 = 20 = 20 = 30 = 30
Notice how budget moves towards tail Contingency based just on width
B B ML ML W W B B ML ML W W B B ML ML W W
= 10 = 10 = 28 = 28 = 30 = 30 = 10 = 10 = 12 = 12 = 30 = 30 = 18 = 18 = 20 = 20 = 22 = 22
107
Define Levels Of Precision

What was the of Magnitude Rough Order difference between an estimate produced against a Need and one produced against a and lower Estimate must be interpreted as between upper Requirement? limits
Budgetary
Reduced range
ROM
Definitive
Final range
Estimate ing me h aametthing s n he s eaantthe E theirr ei nly m e E mssoonly m e AGRE E th e terrm one i w e AGRnce! e a Thesse tveryyoneiff wn advvance! nd Theto e ver ssi in ad 40% aand ii ii n to e definnttoon M ass 40% defi see RO M a +400% RO o % ht migght see -40 tto +400 u Yoou mi e it aas -40 Y I se e it s I se
time
108
Improving Precision Over Time

Range narrows & skew changes over time

D D eta es il ig ed n
e 1SD
Max
St ar tup P D reli es m ig in n ar y
At start-up
After design
Po st -f ac t
6 SD
Max Most Likely Min
Most Likely
Cross-section at start-up
Min
time
Cross-Section @ Detailed Design
Plan View
109
Improved Estimates
Quality of estimate indicates natural variability of underlying process

Indicated by ratio of the contingency to budget Contingency : Budget 2 : 16 (1 in 8 or 12%) worse than 0.3 : 16 (1 in 50 or 2%)
10% or less
Treat 1sd as 80% confidence & 2sd as 95%
One SD
Between 10% and 20%

Only credit 1sd as 70% & 2sd as 80%
Anything worse requires return to the WBS to decompose the task

Likely the task includes a discrete risk that is distorting the estimates Worth investing effort to improve estimate
12 13 14 15 16 17 18 19
110
Assignable Causes & Random Variation

Distinguish random variations & those with a specific cause

Sign your name 10 times Imagine someone bumps into you on 1 signature
Actual results inexactly match estimates due to variances

Estimating basis & range must account for random variations Risk/ contingency process should account for assignable causes
Upper Control Limit
Out of tolerance
111
Three Parts To Any Estimate

3 Parts of a budget in any quantity (Time, money) That part derived from the core of the work to be done That part allowed for as random variations natural to the process and product
May be possible to define cause & effect but we choose not to Minor, often many in number both good and bad
That part allowed against specific causes of variation

Potential problems (& opportunities) that we can identify and assess probabilistically not deterministically ity Veloocity lc s / Ve Risks! ile = Mile s / rk M Can only be a guess
Forth element may be reserves
= o e o w fk l li hts vvetto wor ic--igghts ri af againstDunexpected to rrann i The Dri Trraffic e Th T y duue to a i nt e d ++Delaay e to aaccde ntidayys Del du to cci ide ol da s y ue ol-h oli ++Delaay ue toosschool112 el d t cho -h D d p ue eed-u ppeed-up d --S S
Responses to Uncertainty
Tolerance allowances
An allowance for natural variations in process execution Describing causes sufficiently to be assignable is not cost effective No cost-benefit to making process more capable
Contingency budget
An allowance associated with restoring alignment between status and plan after an identified and assessed event becomes certain Relates to an assignable cause Only consumed if the event occurs
Change budget (philosophically just part of contingency)

An allowance for allocation against a modified plan Funding for a new set of future intentions and / or new end point
113
Budgeting the Uncertain

Allocated budget What we know we know

The iceberg that sank the Titanic Core work done & in progress & contingency AFTER the risk trigger
Unallocated budget Things we know we do not know

If the iceberg could have been avoided (Between horizon & impact) Core work not yet started, Plan B that might not be needed
Reserves Things we dont know we dont know

The iceberg before the Titanic was launched on her maiden voyage
Contract Price Contract Budget Baseline (CBB) Performance Measurement Baseline (PMB) Distributed Budget Control Account Budgets Planning Packages Work packages
Margin Reserve Undistributed Budget
114
Lesson 9: Adding & Showing Uncertainties
115
What Confidence Of 5 Weeks Parallel Tasks

Assuming even chances of each task duration then what is the probability of this project taking
3 weeks 5 weeks 7 weeks / About % / About % / About %
B=3 ML=5 W=7 B=3 ML=5 W=7
B=3 ML=5 W=7 B=3 ML=5 W=7
B=3 ML=5 W=7 B=3 ML=5 W=7
116
Over-Allocating Contingency Serial Task
What schedule is needed for the following (1/10 chance of the extremes)?
Task 1 Best estimate 1 day (1 in 10 chance), worst 99 days (1 in 10 chance) Task 2 Best estimate 1 days, worst 99 days Task 3 Best estimate 1 days, worst 99 days
t1
t2
t3
?/? chance ?/ chance ?/?
1d+1d+1d = 3d if EVERYTHING perfectly 99d+99d+99d = 298d if EVERYTHING awful (1d+99d)/2+(1d+99d)/2+(1d+99d)/2 = 50d+50d+50d = 150d Is 50 plus 16 plus 50 plus 16 plus 50 plus 16 = 198 better?
How often will 298 be required? When is 150 ok?
117
Confidence in Schedules
Each task B=1, ML=50, W=99, E=50, =16.7

50+50+50+16+16+16 is not 80% case! (ie only 1/5*1/5*1/5 chance)
Will only need 16+16+16 in the 20% * 20% * 20% of cases

20% * 20% * 20% = .8% or 1 / 125 198 is the 99.2% confidence t1 t2
SD =
t3
SD12 + SD22 + SD32 = 27.7
150+28 = 80% confidence 118

Departmental Budget
You have 3 projects you want to run next year, what should you request from the funding committee Project 1 Best = 2m Project 2 Best = 4m Project 3 Best = 4m ML = 5m ML = 6m ML = 5m Worst = 6m Worst = 11m Worst = 6m
Should you ask for 6 + 11 + 6m ? How much contingency should you include in the requested budget
119
Departmental Budget
What SD for the three projects we just looked at

Project 1 B = 2m ML = 5m W = 6m Project 2 B = 4m ML = 6m W = 11m Project 3 B = 4m ML = 5m W = 6m .E 0.67 6.5 5 12.2m .SD .67 1.17 0.33 .sd2 .44 1.36 0.11 1.91
Contingency = 1.9 = 1.38 50% budget = 12.2m 80% budget = 12.2 + 1.38 = 13.58m
120
Reality & Simplicity

14 18 7 14 18 26 Licensed for individual use without fee. A commercial license (License@logicalmodel.net) removes this note: Please report unlicensed commercial use & share in fees levied D 4,7,11 8 15 7 10 G 4,4,4 15 19 17 27 J 7,8,10 19 27 27 29 1 4 6 A 1,4,6 0 4 1 4 6 5 1 4 6 3 6 8 6 7 9 8 10 12 B 2,3,6 8 5 8 10 6 9 11 8 11 13 C 4,5,7 4 9
E 3,3,4 14 17
H 8,10,15 17 27
L 2,2,2 27 29
5 8 10 11 13 15 14 16 18 16 17 16 6 9 11 12 14 16 15 16 19 18 19 19 8 11 13 14 16 18 18 19 21 20 21 23 20 F 6,8,10 9 17 I 2,3,3 19 22
25
K 4,5,6 22 27
Project expected Project sd
= ( e1 + e2 + e3 + e4. =
(sd1**2 + sd2**2 + sd3**2 + sd4**2 + )

121
Calculating Contingency
Task A B C D E F G H I J K L
Best 1.00 2.00 4.00 4.00 3.00 6.00 4.00 8.00 2.00 7.00 4.00 2.00
ML 4.00 3.00 5.00 7.00 3.00 8.00 4.00 10.00 3.00 8.00 5.00 2.00
Worst 6.00 6.00 7.00 11.00 4.00 10.00 4.00 15.00 3.00 10.00 6.00 2.00
e 3.83 3.33 5.17 7.17 3.17 8.00 4.00 10.50 2.83 8.17 5.00 2.00 E=63.17 CP=29.5
SD 0.83 0.67 0.50 1.17 0.17 0.67 1.17 0.17 0.50 0.33 0.00
CP 1.00
Float 1.00
SD*SD 0.69 0.44 0.25
Schedule Protection 0.69 0.25
1.00 1.00 7.00 1.00 1.00 1.00 2.00 1.00 2.00 1.00 Effort & CP protection
1.36 0.03 0.44 1.36 0.03 0.25 0.11 0.00 2.23 0.00 1.66 0.44 1.36
Length of CP & Total Effort
122
Showing Schedule Contingency

D 4,7,11
G 4,4,4
J 7,8,10
Pros and Cons of Pros and Cons of showing contingency showing contingency explicitly? explicitly?
A 1,4,6
B 2,3,6
E 3,3,4
H 8,10,15
L 2,2,2
Contingency 1.66
C 4,5,7
F 6,8,10
I 2,3,3
K 4,5,6
If you can keep your head when all about you are losing theres. You didnt understand the plan (c) Logical Model Ltd 2007 consult@LogicalModel.Net
123
Monte-Carlo Analysis
Software tool to calculate probabilistic project duration
124
Showing Cost Contingency

3pt estimates for work yield expected cost / schedule and standard deviation
Sum costs , calculate project (or phase or path standard deviation) Plot on cumulative cost curve Other Allowances & Reserve sd = (sd1**2 + sd2**2 + sd3**2 + )
e = ( e1 + e2 + e3 + e4) or staff-days or any other quantity
Tolerance?
Time SD
125
Retiring Contingency
%age contingency used or retired by value
Contingency used
Fear
WorstCase Budget / Hrs 50% Budget

Hope
BestCase (all opportunities)

126
Exercise: Estimating
How many sweets are there & what is their value? Step: 1m Rotate the roles Step: 3m Understand the problem, Identify the techniques that may help produce a good estimate and agree team approach
Be sure to assess the factors that your result is most sensitive too not just those you think you can establish with most precision
Step: 10m Estimate the number of sweets AND value based on:
The number of different colours of sweets Assign each a value from the table below You must nominate which colour is 1st , 2nd, etc BEFORE you open the sweets 1st Colour each sweet worth 1p 2nd Colour 2p each 3rd Colour 4p each 4th Colour 8p each Etc Calculate the estimated value of the packet contents
Step: 3m Give me your values
127
Debrief
Your asked to draw-up a modification to a ship

Are the sweets relevant ? What are your sweets now? How many of each? What are their values?
Steps and variations

How did you assess the bag of sweets How could you assess the change to the ship
What is not yet fully understood, what is still missing

What makes this method useless and what makes it useful
What are your feelings about doing it?

What are the reasons that you wont use these steps?
Old beliefs do not lead to new cheese

128
Review
Discuss with your colleagues what we have covered Record on a flip-chart

Mark with A Triangle every-thing that gave you a new angle on existing knowledge Things that told you something quiet new or different to your existing knowledge a Lightening Flash Old knowledge improved: misconceptions resolved or missing parts supplied A Circle For things that agreed with what you already knew a Square and a Cross for disagreed with
129
1.
What needs recapping? Any feed-back or FUDs to discuss? Note 1 (or more) promises to yourself to realise benefits from our investment Outcome sought
2. Outcome sought
3. Outcome sought

130
Please would you complete the evaluation form overleaf Thnx
Appendices
131
There are other free sources of our valueadd on our web-site www.logicalmodel.net
For further help & assistance
Assist@LogicalModel.Net +44 (0) 84 52 57 57 07
Consultancy & training in

Basic structured project management Tools and techniques for advanced project & programme management Leading complex projects Recovery of struggling projects Creating & running PMOs Project Risk and Quality Management Using Earned Value Analysis Board briefings on project control & governance
Continued
Dimension Four Benefits Realisation Method training and consultancy PRINCE2 Exam preparation & PRINCE2 use in the real-world Implementing IT Governance using the CobiT Framework Implementing Benefits Realisation & Lessons Learned processes
132

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In the beginning was THE PLAN. And then came The Assumptions.

es iqu n ch Te ing oject at s Pr tim r ie Es Se

Simon Harris, PMP, CGEIT, IPMA-D, P2

Logical Model Ltd 2010

Estimating Managers 2-Day Course Simon Harris, PMP

(c) Logical Model Ltd 2007 consult@LogicalModel.Net

Poor Estimates Are Everyones Problem

Why is my poor estimate your problem?

(c) Logical Model Ltd 2007 consult@LogicalModel.Net

(c) Logical Model Ltd 2007 consult@LogicalModel.Net

Lesson 0: Introductions & Logistics

(c) Logical Model Ltd 2007 consult@LogicalModel.Net

Who Are We All?

Name, Role and Organisation: Telling others about yourself

5m: Secondly a group-wide Flip-Chart-Page capturing

3m: Thirdly a Flip-Chart-Page capturing

(c) Logical Model Ltd 2007 consult@LogicalModel.Net

Course Objectives: To Be Able To:

Create a working environment in which results achieved are matched to expectations

Route Map To The Objectives

Chapter Notes & Actions to Implement

Lesson 1: What is an Estimate?

(c) Logical Model Ltd 2007 consult@LogicalModel.Net

Estimates Are Not Guesses

An estimate is defensible at all times

Scale Basis of quantification

Markers on the scale for optimistic & pessimistic assessment

Who needs estimates ? For what purposes do we need estimates ?

But only in support of decision making!

Inaccurate estimate are useless

Estimates are uncertain

Promises (IE certainty) WILL include a premium for risk

Early Estimates: Wide Ranges Engineering Reality

Design/ Contract Requirement/ Heads of Agreement

Monitoring points based on planning horizons

Updated Updated Project Plan

1st Specialist 2nd Specialist Stage Stage Management Stages

Rolling Wave Planning

As detailed as is possible with what we know today

Work Actuals packages Near Term Activities

Rolling Wave Planning After a Stage Boundary

As detailed as is possible with what we know today

Actuals Near Term Activities

Uncertainty Decreases As..

What Is Different In Each Quadrant?

Experienced & Skilful Clear Goal

Project Control Assessment

Score your current project or programme

(c) Logical Model Ltd 2007 consult@LogicalModel.Net

How did the group perform?

What have you learnt about

Relevance, Application & Adaptation

Chapter Notes & Actions to Implement

Lesson 2: Planning Concepts

(c) Logical Model Ltd 2007 consult@LogicalModel.Net

Context for Estimates

Plan is a process map

How are plans created?

Consideration of usage comes later when we look at feedback loops

Development and Maintenance of Project Baseline

Schedule Baseline Schedule Baseline

Monitoring, Monitoring, Tracking & Tracking & Control Control

Cost & Resource Estimating

Scope: Project, Phase & Work-Package

Customers (& possibly the Boss) view of scope is

(c) Logical Model Ltd 2007 consult@LogicalModel.Net

ALL the Products = ALL the Tasks