Estimates are required, to varying degrees of accuracy, at all stages of the project life cycle. The estimate is a crucial part of the project process, and the key to producing a good estimate, is quality of information. Various estimating techniques can be used but here we have concentrated on a summary of 12 basic rules which should be followed when estimating your project:
- Remember to estimate labour, materials, equipment and financial resources.
- Assume that labour resources will only be productive for 80 per cent of their time.
- Labour resources working on multiple projects take longer to complete tasks because of time lost switching between them.
- People are generally optimistic and often underestimate how long tasks will take.
- Make use of other people’s experience and your own.
- Obtain an expert view.
- Include management time in any estimate.
- Always build in contingency for problem solving, meetings and other unexpected events.
- Cost each task in the work breakdown structure to arrive at a total, rather than trying to cost the project as whole.
- Agree a tolerance with your customer for additional work that is not yet defined.
- Communicate any assumptions, exclusions or constraints you have to your customer.
- Provide regular budget statements to your customer, copying your team, so that they are always aware of the situation.
COMMON MISTAKES
- Not understanding what is involved to complete an item of work.
- Starting with an amount of money and making the project cost fit.
- Assigning resources at more than 80 per cent utilisation.
- Failing to build in contingency.
- Failing to adjust the estimate in accordance with changes in scope.
- Dividing tasks between more than one resource.
- Providing estimates under pressure in project meetings.
