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Two major factors of a project’s success are if the project is delivered on time and within budget. However, being able to create accurate estimates sometimes feel like rocket science!! 

So where do you start? As a project manager, we are usually not the subject matter expertise or the ones actually doing work. It is incredibly important that in order to get realistic estimates you should work with the people that will do the actual work. 

At Function1, we use the PERT Technique when we sit down with our consultants to come up with our estimations. 

PERT (Program Evaluation and Review Technique) is an estimating technique that uses a weighted average of three numbers to come up with a final estimate. Using a spreadsheet we put 4 columns: 

Pessimistic (P): Est. if everything goes wrong 

Optimistic (O): Everything goes right

Most Likely (M): Given normal problems and opportunities

The last column would be (O+4M+P)/6. This is the weighted average since the most likely estimated is weighted four times as much as the other two values. 

Here is an example: 

Screen Shot 2016-07-01 at 12.17.03 PM.png

When calculating this formula, in addition to who would actually be the one doing the work, there are other important elements to take into account.  It is important to note the Level of Effort/Duration is also different from timeline. The hours/budget is presented to the client may differ from the actual schedule as sometimes turnaround time (from client feedback, resolving issues, etc.) can’t be broken down in hours, but should be factored into the timeline. 

Other key factors to include when providing estimates: 

1. Reserve Analysis: Give an overall blanket number of hours that is expected to be spent during the engagement which can be used to account for uncertainty. After all, we all know unexpected issues, delays, bugs, etc. come up and this is associated with schedule AND cost.
2. Take the budget out of the LOE. What I mean by this is often we try to fit the LOE to an ideal budget that would win us the client. However, if we ever have to justify an overage to management or the client, it would not bode well as this will impact timeline (and budget) negatively. 
3. Avoid using any high level breakdowns! For example, do not give an estimate of hours it would take to build a dresser. Give an estimate for what it would take to build shelves, install knobs, etc. The more accurate you are in the level of the detail, the better estimate we can provide the client. 
4. We often forget projects don’t happen in a vacuum. There are meetings with the client, with the project team, unplanned bug fixes, etc. Do not forget about these activities that do require a LOE! 
5. Consider any research or learning that may be associated with a project. 
6. Lastly, in an ideal world, a project will run as planned. However, no project ever does! Issues come up, risks occur, etc. It is important to consider these risks both in your level of effort as well as in the duration of the project. 

Considering the above bullets and using the PERT technique, it should greatly increase your team’s success staying within budget and delivering a project on time!

Stay tuned on my next post where we’ll focus on how to build out a project schedule based off the hours you’ve estimated.