How to Improve the Accuracy of Your Project Estimates
By Reynold Bhatia
When it comes to delivering a successful project, an accurate, workable estimation process is crucial.
In today’s blog, we’ll be:
- Breaking down the estimate process
- Sharing tips for building an accurate system customized to your specific business needs
- Walking you through the steps to attaining the most accurate estimations
And yes, you can take our word for it. Our clients have called our method “One of the most accurate estimation processes they’ve ever worked with“
What are project estimates?
Before we dive in, let’s take it from the top. What are estimates and why do they play a key role in the planning phase of a project?
First, they help us determine how long a project will last.
Second, they help us sort the types of resources needed before getting started.
And third, estimates help us timebox different phases within a project’s lifespan. This is done by combining the above measurements, which include the number of resources, time (days/months), and budget required for any given project.
We want to emphasize that “good estimates” are imperative to project success because they deliver a realistic view of the resources available from a high-level business perspective.
Additionally, a good estimate requires more than an approximation of cost to complete a project. It requires additional resources that include everything from time, funds, and people, to materials, equipment, services, and contingency – i.e. inflation.
However, since estimates are ultimately an approximation, they may never be 100% accurate, which is a challenge many technical teams face. Pulling the right requirements can help avoid unnecessary risk and save you time.
So, let’s look at the ways you can reduce time, remove unnecessary obstacles, and improve overall accuracy.
Why do project estimates change over time?
As we mentioned earlier, estimates are initially prepared before the start of a project and a new estimation is done before the beginning of each iteration in an Agile project. These estimates are usually high level, which is why they aren’t always accurate in the beginning and can evolve as the project progresses. But note, initial estimations are kept as a reference to track future estimation.
The challenge a lot of teams face is that senior team members naturally take over the estimate process, defining most of the tasks without input from the others on the team.
Why is this a problem? It could potentially hinders accuracy because those that are doing the actual work are not being included in gauging the level of time and effort it might cost. So instead of getting multiple perspectives across various levels, we end up very high-level estimates.
We realized a long time ago that this created major gaps. Not only could it stunt the process, it risked delivering poor estimates that needed heavy re-work.
How to estimate a project
To avoid this type of situation, we deploy a simpler approach that ensures multiple team members contribute to the estimation process. Everyone gets a voice.
When we have everyone involved with defining the tasks, we get a bigger and better perspective. This method might be more involved than just jumping on a call but it offers far more accurate estimates and empowers our teams to speak up and own their work.
Let’s take it a bit further. Here’s how we do it.
Before the team meets, each team member involved with the project is asked to fill out a document corresponding to their tasks and their projected estimates.
Here’s an example of what that template could look like.
Task – The actual task is usually high-level information as it’s still in the planning phase, but add as much detail as you can.
Category – Category usually refers to the type of task (i.e., Development, Management, Testing, QA, Infrastructure, Content, etc.)
Min – Minimum time estimate the task will take.
Max – Maximum time estimate the task will take.
Avg – Average of Minimum and Maximum.
Total – Here we add up all Minimum, Maximum, and Average values.
Avg Time – Total of Average values.
Buffer – Usually 10-20% of the Average Time (but also depends on the project).
Total – Total of Average Time and Buffer.
The template is straightforward and can easily adapt to new requirements.
Once the team members have finished filling it out, we meet to review individual projections and define priorities and needs. Once we have an understanding of everyone’s perspective, we’re then able to collaborate and combine all input.
Some of the benefits to this process are:
Each team member has a voice within the estimation, which allows for a more inclusive environment as well as a safe space for juniors and intermediates to voice potential concerns.
Since individual projections are created solo before the initial meeting, they tend to be more honest and less influenced.
Teams can learn from the process and see what they might have not considered. It works as a learning process that fosters continuous improvement over the course of the project and upcoming estimate rounds. A core value Content Bloom stands by.
Higher accuracy rate
With continuous improvement comes accuracy. In the later estimation rounds or future project estimates, we continue to refine our process to strive to become even more accurate.
Has this process worked for us?
The most recent result we’ve seen involves moving a client project to Production much sooner than the client’s business team estimated/expected.
A big win for everyone involved in the project.
Time to get started
There is nothing incredibly complex about this, but it does take, organization, time, and effort. It’s really about the way you implement your processes and handle changing demands and priorities that make an estimate accurate and successful. Don’t forget, the entire premise of building a precise estimation process is continuous improvement.
We do want to emphasize that our estimation process visibly demonstrates how proper upfront planning is the key to delivering successful results. Estimations are detrimental to project growth because it creates big-picture thinking and forces you to strategically plan ahead.
Additional benefits include:
- Companies have a better grasp on their staffing/resource allocations when committing to set project
- It permits teams to better understand revenue and profit streams
- Makes room to mitigate risk and discover potential gaps
If you’re still not sure how to approach the estimation process, we can help.
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