Estimating Based on a Model of Project Execution

I initiated and managed a lot of projects over my career of 30 years or so. Along the way, I observed some common mistakes, both my own and others, that impact the quality of estimates for cost and schedule. Much of this comes down to the way these estimates are prepared. I’ve got a few thoughts to share on managing the preparation of preliminary estimates, so that proposed projects can be approved based on information that the decision makers can believe reflect an understanding of both the problems and the solutions, and how to achieve them.

An Estimate is Based on a Model

Any estimate of the labor and non-labor costs of planned work must be based on an understanding of what work needs to be done, how it will be accomplished, and who will perform the work. In other words, a project plan. A good estimate should reflect a range of possible values, with a confidence level, and should document identified risks and related assumptions, including an assumed start date.

A Schedule, Not A Plan

A project plan is not merely a schedule, depicted in a Gantt chart. It reflects a number of decisions, from scope and high-level requirements to how the transition from the current state to the end state will occur. It takes constraints, non-functional requirements, and relevant organizational processes into consideration. In addition to direct work on deliverables and supporting activities in the Work Breakdown Structure (WBS), it includes plans for activities such as acquisition, staffing, cost reporting and budget management, risk management, security, and likely others. All of these plans are combined in what is known as integration management. Taken together, they constitute a model of how the project will be executed, which can be used as a basis for meaningful estimates.

What, How, and Who

The matter of what work is to be done is reflected in the WBS. The most meaningful estimate of project costs is rolled up from estimates for each work package. Note that initial work package estimates should assume that all inputs and other resources will be available. Dependencies must be planned for, but work on that when scheduling, rather than when when estimating. There are usually few completely new tasks in most projects, and past experience should drive estimates, even if different people will perform the work. Three-point estimates should be prepared for each work package—most optimistic, most likely, and most pessimistic. These parametric estimates can then be used in Monte Carlo simulations of the project.



How the work will be accomplished is a technical matter. An architecture or technical approach document, based on the high-level capabilities required for the delivered product, is a practical minimum. A more detailed design document is better, if available for an initial estimate. Either way, know how you’re going to skin this cat! Make any necessary assumptions and document them to be delivered as part of the overall estimate model.

Note that the who doesn’t usually need to be a specific, named person. It’s helpful to have an assigned team before any estimates are required, but that isn’t usually the case, unless it’s a purely internal project to be performed by an established team. It is conventional wisdom that those who will perform the work provide the most accurate estimates, but that isn’t always the case.  For projects where some of the work will be performed under contracts or by contingent workers, you may have to make estimates with a lower confidence level, but that doesn’t mean that they can’t be useful.

Reducing Uncertainty

The goal of estimating should be to reduce uncertainty to a level where decisions and commitments can be made. Not commitments to a precise cost or schedule, but simply to proceed, in pursuit of specific benefits. And that decision to proceed must always be contingent on evidence of progress commensurate with expectations. As the project progresses, actual cost and labor figures can be used to update the estimate, further reducing uncertainty, so that decision makers can re-commit to continuing the project. As the project plan and schedule evolve, the estimate model should track that evolution. A baseline estimate is necessary, but so is a current estimate.

The best estimates open a dialog. You wouldn’t seriously support the Hashtag, “#NoCommunicating,” would you?

In Closing

We should not manage on a ballistic trajectory, where nothing can change between pulling the trigger and impact on the target. Like modern guided missiles, continuous corrections must be made, in order to optimize the effects of scarce resources—human, financial, and calendar. Agile methods are commonly used these days, but there are others, such as stage gates. Whatever governance model is used, a detailed estimate model, updated throughout project execution, will provide much better decision support than a round number.




New PM Articles for the Week of March 16 – 22

New project management articles published on the web during the week of March 16 – 22. And this week’s video: Harry Hall talks about the need to identify a risk owner along with the project risks you want to manage. 3 minutes, safe for work.

Ethics, Business Acumen and Strategy

  • Zorana Ivcevic and colleagues reports on results of a survey that found an alarming level of pressure to act unethically in US organizations. 5 minutes to read.
  • Ron Rivers examines the intersection of technology and labor, from early history to the near future. 13 minutes to read.
  • Adam Rasmi reports that COVID-19 is also impacting negotiations between the UK and EU on a post-Brexit free trade agreement. 2 minutes to read.

Managing Projects

  • Mike Clayton explains how to manage multiple projects at once. Video, 15 minutes, safe for work.
  • Marina Pilipenko tutors us on project cost management. 7 minutes to read.
  • Peter Landau coaches us on making a procurement management plan. Part of it is a commercial, but you also watch television, right? 6 minutes to read.
  • Jory MacKay guides us through writing a communication plan. 9 minutes to read.
  • Brad Egeland walks us through the process of handing a project off to another project manager. 4 minutes to read.
  • The nice folks at Clarizen compiled a list of five books that every project manager should read. 3 minutes to read.

Managing Software Development

  • Stefan Wolpers curates his weekly list of Agile content, from what drives performance of a distributed agile team to disagreement in distributed teams to the magic of conflict. 7 outbound links, 3 minutes to read.
  • Kiron Bondale argues that domain and organizational knowledge are the key requirement for prospective product managers. 3 minutes to read.
  • Tanay Agrawal suggests that product managers need to see their product like a new user, every single day. 5 minutes to read.
  • Henny Portman shows the difference between incremental and iterative Here’s Part Two, about ten minutes to read both parts.
  • Ankur Jain explains a diagram of the DevOps life cycle. 2 minutes to read.
  • Maximilian Bauer says that being smarter about test cases and how they are structured can save money in testing. 7 minutes to read.

Applied Leadership

  • George Pitagorsky tells us how to manage fear and anger in projects. 5 minutes to read.
  • Christine Trodella has some thoughts on managing newly remote workers, when you don’t know how long they’ll be working from home. 7 minutes to read.
  • Sharlyn Lauby uses the Marvel Cinematic Universe to illustrate keys points on how to manage the external workforce, both project-based and recurring. 4 minutes to read, plus a video interview, 10 minutes, safe for work.
  • Amelia Salyers curates a list of 22 articles for leaders from the past few years, published by venture capital firm Andreeson Horowitz. 5 minutes to read the synopses.

Cybersecurity and Data Protection

  • Curtis Franklin gives us a brief overview of how to quantify cybersecurity risks. 4 minutes to read.
  • Brenda Sharton sees plentiful opportunities for cybercriminals in the new “work from home” mantra of COVID-19. 4 minutes to read.

Pot Pourri

  • Elizabeth Harrin gives us some useful pointers for setting up our home office. 4 minutes to read.
  • Stephanie Vozza notes that generalists tend to be more successful, but only if they get really good at a few useful skills that combine to make them stand out. 3 minutes to read.
  • Sarath C P shares six tips for creating an effective elevator pitch. 5 minutes to read. You’ll need to find your own elevator …


New PM Articles for the Week of September 3 – 9

New project management articles published on the web during the week of September 3 – 9. And this week’s video: the Martin Jetpack—not really a jet and not really something you wear on your back—might soon be a practical solution for personal flight, with a 30 minute flight time. 5 minutes, safe for work.

Business Acumen and Strategy

  • The Verge staff notes the 20th anniversary of the founding of Google with an extensive timeline of significant events. This is how you grow from a research project into a trillion-dollar business! 15 minutes to read.
  • Blair Levin analyzes Google Fiber, the initiative which triggered massive investment in high-speed internet technologies by competing ISP’s. 7 minutes to read.
  • Russell Brandom summarizes the antitrust law case against de facto monopolies Google, Amazon, Facebook, and Uber. 9 minutes to read.

Managing Projects

  • Mike Clayton tutors us on the essentials of project cost management. 10 minutes to read.
  • John Goodpasture gets into the math of 3-point estimates. “They are the broccoli of projects.” 2 minutes to read.
  • Elizabeth Harrin lays out an excellent strategy for fitting professional development into your schedule. 7 minutes to read.
  • Harry Hall encourages us to ask other project managers for advice on dealing with challenges and issues. 3 minutes to read.
  • Deb Schaffer takes us from the PMBOK description of the project scope statement to a fully fleshed out document, with a template. 3 minutes to read.
  • Dale Howard shows how to customize the Quick Access Toolbar in Microsoft Project. 4 minutes to read.

Managing Software Development

  • Stefan Wolpers curates his weekly list of Agile content, from self-management at Semco to preparing for the sprint planning meeting to the dangers of falling in love with a solution. 7 outbound links, 3 minutes to read.
  • Aneel summarizes the 2018 State of DevOps report from Dora. The best firms are doing far better and so are those at the bottom, but the middle … 6 minutes to read.
  • Pavel N. describes how the IT teams at five major companies are using Kanban. 6 minutes to read.
  • Dave Prior interviews Bob Tarne on his experience as an Agile coach at Toyota. “Here I was at Toyota, teaching people how to use Kanban.” Video, 12 minutes, safe for work.
  • Bob Reselman points out some of the current limitations of performance testing edge computing devices. Maybe standards will help! 6 minutes to read.
  • Trish Koo recommends that you develop a technical debt payment plan. Good extension of an excellent metaphor. 4 minutes to read.

Applied Leadership

  • Alexander Maasik curates his weekly list of leadership articles, from increasing transparency with OKR’s to productivity to the worker confidence index. 5 outbound links, 3 minutes to read.
  • Leah Fessler describes Sheryl Sandberg’s approach to keeping one-on-one meetings with her direct reports efficient and personal. 3 minutes to read.
  • Art Petty coaches us on helping people make a positive emotional connection to a new business strategy.
  • Suzanne Lucas gives us the early read on Generation Z as they start to enter the workforce. 3 minutes to read.

Research and Insights

  • Elijah Wolfson reports on the first AI application to diagnose disease—in this case, diabetic retinopathy. 6 minutes to read.
  • Greg Satell recaps high points from the history of computer games and virtual reality to project ways in which the combination of the two will make skill development more effective. 5 minutes to read.
  • Manfred Kets de Vries and Katharina Balazs help us understand why we sometimes overreact at work. 4 minutes to read.

Working and the Workplace

  • Marcel Schwantes notes that Gallup found 51% of US employees are considering leaving their jobs due to a lack of meaning and purpose. But there are solutions! 3 minutes to read.
  • Sarah Goff-Dupont reports on paid time off for volunteer work in the community—known in HR circles as VTO. The payback is in engagement and retention. 5 minutes to read.
  • Mary Abbajay provides a multi-pronged strategy: what to do when you have a bad boss. 6 minutes to read.