Post on 21-Dec-2015
transcript
Projmgmt-1/25
DePaul University
Project Management I - Dynamics Of Estimation
Instructor: David A. Lash
Projmgmt-2/25
What is Estimation? Determine time and money required for tasks
– Critical to success of schedule but extremely hard to do
R&D projects may be solving “new” problem New technology may be involved with
“unknown” productivity enhancements Productivity of the individual is likely
unknown to the project manager (what is an average worker?)
If 1 portion of project slips, coordination of resources may throw schedule off (e.g., equipment shows up and not ready for it.)
Projmgmt-3/25
Estimation Without Complete Specification
Almost always leads to trouble. – If pressed for a “ballpark” estimate,
List out all the specification questions needed to better estimate the project.
– Ask what questions you have– Estimate as best as you can. – List the “known-unkowns”
E.g., How long to build the house? – What type of house? How many floors? What type
of construction? Any “custom” features? Etc.
– Estimate XXX days given: not known availability of contractors, type of construction, etc.
Projmgmt-4/25
Some Practical Estimation Advice Padding estimates “just to be safe” can have a
detrimental effect to:– Your reputation as a project manager– You company or organization
Suppose your organization has 1,000,000 for funding projects:
Proj Pri Best 20%Inflated
Rev1 Year
A 1 300,000 360,000 1,000,000B 2 150,000 180,000 750,000C 3 200,000 240,000 750,000D 4 200,000 240,000 600,000E 5 150,000 180,000 500,000Tot 1,000,0000 1,200,000
Projmgmt-5/25
Who Should Make The Estimate?
Estimators should be experienced with work they are estimating. Need to understand the work in order to estimate it.
People doing work should have role in estimation process.– The know own limitations (e.g., learning curve)– know their own schedule
Should have some exposure to techniques and goals of estimating
– e.g., produce accurate estimate VS optimistic schedule. Use experience!
– Organizations can build DB of performance data of various tasks.
When confronted with challenges to schedule– refer to the WBS and project specification
Projmgmt-6/25
3 Estimation Terms “Ballpark Estimate” - Used for some initial estimation. Can
be off by as much as 90%. – Accuracy relies on knowledge of estimator who has some
expertise in area– Only purpose of ballpark estimate is to determine if more
detailed estimate is useful (e.g., continue?)
Rough order of magnitude (ROM) - still has wide variance but is based on extrapolations of similar projects.
– For example, builder may know a house 20% smaller took 100 days to build. Therefore ROM estimate just add 20% to 100 days.
– Purpose is only to decide to start a project or more accurate estimation process.
Projmgmt-7/25
3 Estimation Terms Detailed Estimate - “Bottom Up” - includes
WBS, schedule and budget. Look at each task to develop the estimate.
– Actually used to manage the project.– Details the schedule, resource information and
a forecast of project budget and cash flow
Projmgmt-9/25
Estimation Techniques Phased Estimation - cost and schedule estimates
on a per phase basis only– Phase gate developments - each phase gate is a
decision point to determine if to continue– helps mitigate project risk, since
only estimate 1 phase at a time re-estimate next phase when more info is known
– Start with a detailed estimate of phase 1 and rough order of magnitude for entire project.
Team agrees to detailed estimate for phase.– At end of phase, a new ROM estimate developed
for entire project & repeat detailed estimation.
Projmgmt-10/25
Phased Estimation
Require Design Build Oper
ROM estimate (low confidence)
Detail Est
Reqexec
ROM estimate
Detail Est
exec
ROM estimate
Detail Est
exec
DecisionPoints
Projmgmt-11/25
Incremental Phased Estimation
Phase Construction Oper
ROM Estimate (low confidence) For remaining phases
Detail Est
Reqexec
Design
Build
Test
DecisionPoints
User Experience
Projmgmt-12/25
Phased Estimation II Project Members & managers - like phased estimation since:
– Can be more accurate since not estimate all at once (and have to live with it)
Customers - may not like it since– not know when the entire project is complete– but get more and more accurate information as project
progresses. Examples -
– Used for construction - Not estimate date for house until design and blueprint approved.
– Suppose moving location for company Phase 1 - build new facility - 12-15 months Phase 2 - once new building done then did detailed plan for
move
Projmgmt-13/25
Phased Estimation III
Examples - – Suppose building a D/R capability,
Wanted to acquire redundant machines (to ensure can continue business if disaster), get vital data reproduced, ensure daily production can continue seamlessly
– phase 1 - be able to reproduce more vital products at remote site. Get vital data copied daily and sent over to remote site.
– phase 2 - identify all data and applications needing D/R coverage and work out processes to reproduce in emergency.
Projmgmt-15/25
Parametric Estimation
Parametric - seeks a basic unit of work to use as a multiplier for entire project.
Always based on historical data as close to reality as possible
Examples– A cycling group cycled every Saturday for several miles.
Planned a 3334 mile trip, – Based on experience felt they could expect to do 80 miles a
day for 3334/80=42 days.– However, they are not accounting for wet weather (add 10%)
or 200 miles of hilly miles. Add 10% for poor weather and believe can only do 30
miles per day on hills. (For calculation see next page)
Projmgmt-16/25
Parametric Estimation - Cycling Calculation
Parametric Calculation
.50_
.10.130
200
80
200334,3_
.__
_
__
__
ddurationTrip
durationTrip
factorweatherratemntn
milesmntn
ratedaynorm
milesmntnmilestotal
Projmgmt-17/25
Parametric Estimation - Examples Engineering company needed to design a new jet
fighter. – Would require 1000s of engineering drawings– based on past experience, each drawing would
require 200 engineering hours– Could use this to build some estimate, not complete
but at least some basis for estimate Manufacturing company needs to translate 340
page manual into several languages– on average 15 pages per day can be translated with
2 people working on each language– 15 pages per day with a new lang is optimistic but
.15
34023
._
_)_(_
days
ratetrans
pagestotallangpertimentranslatio
Projmgmt-18/25
Parametric Estimation - Lessons Better for lower level tasks than for estimating
entire project Good for ROM and even for project selection
estimates Usually need detail specifications of tasks. Need
to know lots about tasks to be accurate. For example need to know amount of hilly terrain or different languages to translate to (and number of pages in manual).
Might use parametric for low level work package estimates. Then roll each of the packages up to get overall project estimates.
Projmgmt-20/25
Bottom-Up Estimation All detailed tasks are estimated and then
combined from lowest level to highest. – Use WBS for framework – Provides most accurate estimates
Since requires details of all work packages used more with phased estimation
Project
Projmgmt-21/25Proj mgmt-3/19
From Project Definition
Project
Rules
S copeDeliverables
Pr ePlanningRisk Management
- D evelop A pproach- R isk Management
Step 1D evelop a WB S
All
Project
T asksStep 2
Sequence thet asks
Step 3Estimate the
wo rk packages
D uration
Estimates
Step 4:C alculate an
initialschedule
Equ
ipm
ent
requ
irem
ent s
& la
bor &
ski
ll
estim
ates
Step 5:Assign & level
resources
Cri
tic
al
Pa
th,
f lo
at,
mi l
es
ton
es
Step 6DevelopB udget
Realist ic schedule& forecast
No
n-l
ab
or
co
sts
Realistic s
chedule
& forecast
Pr oject Plan- al l proj ect t ask s
- sch edul e- respon sibi li ti es
- bu dgetR eso urc e f oreca se
All
Pro
jec
tT
a sk
s
Ne
twd
iag
ram
s
Overall Planning Steps -Provide bottom up estimating
Projmgmt-22/25
The Detailed budget estimate The Detailed Estimate
– Used to get a realistic as possible– Used for detailed cost-benefit– Used to manage the project
Categories include – Internal Labor Costs - figure 8.5 shows the labor
hours summarized for each task – Burdened labor rate - an average cost of employee
per category For example THC rate or Admin HC rate include wages, benefits, workplace costs.
– Internal Equipment Costs - (Next Slide)
Projmgmt-23/25
The Detailed Budget Estimate Categories include
– Internal Labor Costs – Burdened labor rate– Internal Equipment Costs - equipment needed to do the job.
E.g., each person may need 1000 computer or a backhoe Figure 8.6 (pg 177)shows resource usage plan. Need to
identify which equipment will be used up entirely and which will be useful for several projects.
– For example, if useful for 3 years and 5 projects can use then may spread equipment cost across three projects.
– Project cash flow detail Figure 8.6 shows the cash flow estimate for the project. It
shows the week to week projections of costs
Projmgmt-24/25
Example Of Cash Flow Schedule Cash Flow Estimates Important Examples:
– A small housing development that will build 5 houses
Staggers the start data of each house to keep each crew busy (mv from house-house)
Need constant cash flow (sell house to fund next phase.)