Project Management: Avoid these common estimating traps

by Tom Mochal | Mar 07, 2006 8:00:00 AM

Tags: Strategy, Tom Mochal, project management, biase, available budget, Project Management Newsletter

Takeaway: Here's how to avoid the common errors that plague the estimating process.

Project managers are asked to provide effort, duration, and cost estimates as a primary part of our jobs. You know then, that the estimation process is partly an art and partly a science. However, once you learn good estimating processes and techniques, you will hopefully be able to move more toward the "science" side of estimating and rely less on the "art" side. One way to move from art to science is to recognize and avoid the common errors and biases that plague the estimating process today. These errors and biases include the following:

Not taking all the work into account

This is perhaps the most common problem, especially with earlier, high-level estimates. You may just miss some major work that you didn't understand to be a part of the project, such as documentation or training. Typically, however, you underestimate the size of deliverables that need to be completed or you do not include all of the activities required to complete the deliverable.

Wishful thinking

Anyone who provides estimates of work knows that there can be pressure from your client to make the estimate as low as possible. Ultimately, the client wants to get what he needs for as little effort (and cost) as possible. In many cases, there is a tendency on the part of the estimator to get caught up in that mindset as well. The estimator ends up "wishing" the work ends up within the client expectations.

Committing to best-case scenario

The client wants it done as quickly as possible. Your manager wants it done as quickly as possible. You think it can be done quickly. However, you get into trouble because you think about what it would take to complete the work if everything goes right. You might even think in terms of a range of effort for the work, but then too often you end up committing to an estimate at the lower, or optimistic, end of the range.

Assuming higher quality work than you can deliver

This error occurs when you think that you can build everything right the first time. (This is similar to the prior best-case estimating scenario.) However, as the project is executing, you realize that your ability to build to a right level of quality the first time is limited, resulting in overages for rework, bug fixes, retesting, etc.

Committing based on available budget

In this case, the client has a fixed amount for the budget. The project manager thinks there is a chance the project team can get it done within available budget, so he commits based on that budget number. Estimating work based on the available budget is so obviously wrong that it's almost a cliché. However, how many times have you fallen into this trap?

Not recognizing estimating biases

Your personal biases can sneak into your estimates. Some are optimistic and some are pessimistic. Optimistic biases will result in underestimating the work and can include:

• Tending to think the work is simple (everything is simple to you).
• Thinking your team can accomplish more than they really can.
• Estimating based on what it would take you to do the work, not the average person.

Pessimistic biases will result in overestimating the work and can include:

• Overestimating the work because you had a bad experience on a similar project in the past
• Overestimating because you don't really want to do the work. You might estimate high and hope the project will be cancelled.

All of us can fall into these estimating traps and biases if we're not careful. Recognizing the problems to begin with can help you avoid the traps when you're creating estimates on your project.

Print/View all Posts Comments on this article

Due Diligence pat.shediack@... | 03/08/06

I also use the Pert estimating with success ... tremblad | 03/28/06

With large (+) projects it's inevitable the estimate will grow Ian ( Chicago ) | 03/29/06