2.2.1.1P Estimating Effort and Duration

(2.2.1.1P.P1)

Webster’s dictionary defines estimating as “A judgment of size, number, quantity, value, distance, quality, etc. of something that needs calculation or assessment.”

This section describes the process for estimating effort, cost and duration. The place to start is estimating effort hours. Duration and cost can be derived using the effort estimate as a starting point.

Before You Begin (2.2.1.1P.P2)

Consider the following techniques before you begin the estimating process.

  • Get a clear picture of the work that is being estimated. Many problems with estimation come because the estimator is not really sure what the work entails. You should avoid estimating work that you do not understand. This does not imply that you can know every detail. The estimating contingency (explained later) is a way to reflect some of this remaining uncertainty.

  • Determine who should be involved in the estimating process. The project manager may or may not know enough to make the estimates on his own. It is usually a good practice to look for estimating help from team members, clients, subject matter experts, etc. This will usually result in the estimates being far more accurate than you would get by yourself.

  • Determine if there are any estimating constraints. If there are estimating constraints, it is important to know them up-front. For instance, the end-date may be fixed (timeboxed). You should also know if the client expects Six-Sigma quality in the deliverables, or if the 80/20 rule will apply. It is possible that there may be a fixed budget that cannot be increased. (This would be of interest so that you can reduce the scope of work, if necessary, to meet the fixed budget.) Knowing these constraints will help the estimators make valid assumptions regarding the cost, duration and quality balance.

  • Utilize multiple estimating techniques if possible. There are a number of techniques that can be used to estimate work. If possible, try to use two or more techniques for the estimate. If the estimates from multiple techniques are close, you will have more confidence in your numbers. If the estimates are far apart, you need to review the numbers to see if you are using similar assumptions. In this case, you can also try to utilize a third (and fourth) estimating technique to see if one initial estimate can be validated and the other rejected.

Estimating Effort (2.2.1.1P.P3)

Effort hours must be estimated first, before duration and cost estimates can be prepared. Use the following process to estimate effort hours:

 

Role

Estimating Effort

1

Project Manager

Determine how accurate your estimate needs to be.

Typically, the more accurate the estimate, the more detail you need to understand about the project, and perhaps the more time that is needed. If you are asked for a rough order of magnitude (ROM) estimate (-25% - +75%), you might be able to complete the work quickly, at a high level, and with a minimum amount of detail. Perhaps you can provide a ROM estimate based on knowledge in your head. On the other hand, if you must provide an accurate estimate within 15%, you need to spend more time and understand the work at a lower level of detail.

2

Project Manager

Create the initial estimate of effort hours

Estimate each activity and for the entire project, using techniques described in 2.2.1.1P Estimating Effort and Duration.

3

Project Manager

(optional) Factor the effort hours based on the resources assigned

Your activity estimates are probably based on the effort it will take an average resource to do the work (or perhaps the estimates are based on the effort it would take if you did the work). Sometimes you also have knowledge of the exact resource or the type of resource that will be assigned. If you do, you may want to factor the estimate up or down. For instance, you may estimate an activity to take 40 effort hours. However, you also know that the person who will do the work is an inexperienced trainee. In this case, you may want to double the estimate to 80 hours.

4

Project Manager

Add specialist resource hours

Make sure you have included hours for part-time and specialty resources. This could include freelance people, training specialists, administrative help, etc. These are people that may not be obvious at first, but you may need them for special activities.  Because they are typically in project support roles, you may have forgotten to include their activities in the original Work Breakdown Structure.

5

Project Manager

(optional) Add rework time In a perfect world, all project deliverables would be correct the first time. On real projects, that usually is not the case. Schedules that do not consider rework can easily end up underestimating the total effort involved with completing deliverables.

This is not to be confused with scope changes. If you produce a deliverable that does not meet all the original requirements, or has a quality problem, then rework may be required. If the original deliverable is not acceptable because of additional requests for new features, functions or requirements, then scope change management should be utilized. There are a number of ways to factor in the effort and time associated with rework. 

  • Add into the original estimate. This is probably the most typical approach. If you think that a deliverable will take 50 hours to complete, you may be already be considering the work required for one set of corrections, or maybe two.

  • Add as separate activities. In this approach, you estimate the effort of completing the deliverable the first time, and then add a second set of activities, effort and duration for making corrections and recycling a second (and third) time through.

  • Add as blocks of time. Rather than add rework to individual deliverables, add a block of time at the end of a phase for rework. This is basically adding a general budget and schedule buffer to help absorb the rework time associated with a group of deliverables. The effort and cost associated with the buffer could be based on individual rework estimates or just a percentage of the original deliverable development time.

6

 

Add project management time

Project management takes effort and there is an associated cost as well. You need to allocate effort hours to successfully and proactively manage a project. You should add 15% of the effort hours for project management. For instance, if a project estimate is 12,000 hours (7 - 8 people), and then a full-time project manager (1800 hours) is needed. If the project estimate is 1,000 hours, the project management time would be 150 hours. This would not be enough for a full-time project manager, so the project manager would either be a part-time project resource or the project manager would also have non-project management activities assigned to him as well.

7

 

Add contingency hours

Contingency is used to reflect the uncertainty or risk associated with the estimate. If you are asked to estimate work that is not well defined, you may add 50%, 75% or more to reflect the uncertainty. If the estimate was required on short notice, a large contingency may be required. Even if you have time to create a reasonably accurate estimate, your contingency may still be 10-25%. If you do not add a contingency amount, it would mean that you are 100% confident in your estimate. This may be the case if similar types of projects have been done before.

When you add contingency, the best approach is to include it as a separate line item. However, if your organization will not allow you to include a formal estimating contingency, you may have no choice but to include the estimating contingency by padding the estimates of all the underlying activities. This is not the preferred approach, but it is the natural reaction if your organization will not allow a formal estimating contingency budget to reflect estimating uncertainty.

8

 

Calculate the total effort

Add up the estimates for all the work components described above.

9

 

Review and adjust as necessary

Sometimes when you add up all the components, the estimate seems obviously high or low. If your estimate does not look right, go back and make adjustments to your estimating assumptions to better reflect reality. Also make sure that your estimating model is consistent and reasonable. For instance, if a repetitive activity is planned, you might initially calculate the total effort by multiplying the effort to complete one activity by the number of times the activity is executed. However, upon further evaluation, you may realize that the effort to complete the activity will decrease as it becomes routine. You should also make sure that similar activities have similar effort estimates and if they do not, adjust them as needed.

10

 

Document all assumptions

You will never know all the details of a project for certain. Therefore, it is important to document all the assumptions you are making along with the estimate.

Estimating Duration (2.2.1.1P.P4)

Whereas effort is normally given in terms of hours, duration is given in terms of days and an end-date. For instance, it could be confusing to say that the duration of a project is three months, since you don't know if this means that the duration is actually 90 days or 60 work days. What you should say instead is that the project duration is 90 days and the estimated end-date is 31 December 2004. If you describe the duration estimates in those terms (the estimated number of days of duration, as well as the targeted end-date) your final numbers are clear. 

If everyone worked eight hours per day, and was absolutely 100% productive for all eight hours, you could easily calculate duration by taking the number of effort hours, divided by the number of resources. For instance, if an activity was estimated at 80 hours, and you have one person assigned, and he works eight hours per day, the duration would be (80 / 1 / 8) = 10 days. Likewise, if four people were assigned full time, the duration would be (80 / 4 / 8) = 2.5 days.                           

However, those perfect circumstances are not indicative of how work is actually performed. Therefore, you can convert effort hours to duration activities using the following process.

 

Role

Estimating Duration

1

Project Manager

Estimate the productive hours per day

Normally the first step is to determine how many productive hours of work you can count on each person working per day over time. In other words, if an activity is scheduled to take 40 effort hours, it is unlikely that it can be completed in a calendar week, without overtime. Using a factor of 6.5 productive hours per day will help you take into account socializing, ramp-up time, going to the bathroom etc. See 2.2.1.4P Estimating Productive Hours per Day for more details.

2

Project Manager

Determine how many resources will be applied to each activity

In general, the more resources you can apply to activities, the quicker the activities can be completed. Obviously two resources may be able to complete an activity faster than one person, but it may not be twice as fast. Similarly, a third person may allow the task to be completed sooner, but not in one-third the time. However, at some point, adding resources will not make the activity complete any sooner, and in fact, may make it go longer.

3

Project Manager

Factor in available workdays

Take into account holidays, vacations and training.  This was not included in the productivity factor in the first item, since this non-project time can be scheduled and accounted for in advance. For instance, on a three-month project, one team member may be out for two holidays, while another may also have ten days of vacation. To make your schedule more accurate, take into account any days that you know your team will not be available to work on the project.

4

Project Manager

Take into account any resources that are not full-time

If you have a resource allocated 50% of his time, it will take him at least twice as long to do any individual activity. If you have an activity that has an estimated effort of 40 hours, and you assign a resource that is only allocated 25% to your project, the resulting duration will be at least four weeks, if not more.

5

Project Manager

Factor in multi-tasking productivity loss for part-time resources

If one person is working on multiple projects, or perhaps a combination of projects and support, a further reduction in productivity needs to be taken into account. This reflects the fact that if a person is shared on two or more unrelated efforts, it takes time to stop one and start up another. For instance, if a person is on two projects for 20 hours each week, he is going to lose additional productive time switching back and forth between the two work efforts. If the person is on two projects, this might result in a 10% loss of productivity on both projects. If he is on three (or more) each effort could take up to a 20% productivity hit.

For example, let’s assume that a person is split between three projects for 24, 10 and 6 hours per week. The project managers should initially factor in closer to 20, 8 and 4 hours of actual productive time per week. Further, since there are three projects involved and there will be stopping and starting time, the re-factored productive time might be closer to 18, 7 and 3 hours respectively per project.

6

Project Manager

Calculate delays and lag-times

Some activities have a small number of effort hours, but a long duration. For instance, if you are counting on vendor resources, you may need to wait until the vendor is ready before you can begin. Another example is the duration required to get a deliverable approved. You may estimate the effort at only a few hours, yet it may take a number of days or weeks to gain the actual approval.

7

Project Manager

Identify resource constraints

When you build your initial schedule, you identify the activities that can be done sequentially and those that can be done in parallel. If you have enough resources, all of the parallel activities can, in fact, be done in parallel. However, you can only do the activities in parallel if you have the right resources available at the right time. If you do not have enough resources (you rarely do), you will find that some of the parallel activities need to be done sequentially, since the same resource needs to be assigned to the activities. Even if you think you have enough people, you also need to recognize that not all activities and team members are interchangeable. There may be a set of activities that can be done in parallel; however they need to be worked on sequentially because only one person has the right skills to do the work – even though other resources are available.

8

Project Manager

Document all assumptions

You will never know all the details of a project. Therefore, it is important to document all the assumptions you are making along with the estimate.