Estimation is an invaluable tool for anticipating and managing project uncertainties. Accurate estimates help identify cost and schedule requirements with relative precision, and reduce the risk of running out of time, resources, and budget during a project. But even with years of experience, project managers struggle to paint an accurate picture of a project’s scope and timeline.
What’s the problem?
Let’s take a moment to think about what it’s like to plan a project using traditional project management tools. Here’s the scenario:
I need to get approval for a project, so I want to give my project sponsors a high-level understanding for how much time and effort the project will take. But, I don’t have a good sense for exactly how much effort will be required for each and every task, since I’m not the person who will actually be completing the work. And since the project needs to get the “green light” from my project sponsors before I can spend team resources doing detailed estimates, I end up with a bunch of single-point estimates, like “2 weeks”. So then I take those “estimates”, which are really just wild guesses, and plug them into MS Project (or any number of similar tools) and get a static plan that becomes outdated the moment I finish creating it.
Clearly, I’m not setting my project, or myself, up for success. First off, those high level estimates that I used are pretty far from reality. “2 weeks” isn’t really an estimate, it’s a padded guess. What’s worse is that a single-point estimate is likely to be treated as a promise, since there’s no representation of uncertainty. It’s no wonder why people think estimation is hard!
There’s a simple solution.
With a dynamic project management tool like LiquidPlanner, I can use ranged estimates to break down my projects. A ranged estimate is something like “1-4 weeks” or “3-5 days”. The range allows you to capture the uncertainty in the estimates even in your early planning estimates. Providing a dual-point estimate helps prompt the discussion of what risks could being introduced that would push the effort towards the worst case end of the estimate. This is a smart discussion to have at the start of any project.
Another really nice thing about ranged estimates is that when you need to provide estimates on parts of the project with poorly defined requirements, you can give wide ranges to communicate the uncertainty. Well-defined requirements get estimates like 5-7 weeks whereas poorly-defined, nebulous requirements get estimates like 4-20 weeks. This is especially true when giving early-stage estimates.
There’s pretty much no way to get around doing high-level estimates; your business needs some idea of the investment required to complete a project before signing off on it. But by using ranged estimates, you can be confident that you’re representing the scope of your project as accurately as possible, which translates to you getting the right resources to get the job done.