What is Project Estimation?
Estimating is a vital part of the project planning phase and involves estimating the project costs, resources or duration. Estimating a project can be a challenging task, no matter the project's size or budget. The more complex and larger the project's size and budget, the more difficult it gets to appropriately estimate the project. Faulty or incorrect estimates will result in delayed deadlines and breaking budgets – two key project failure symptoms.
What are project estimation 4 main stages?
At this stage, the Analogous estimating technique is used. The estimates here are very high level and are mostly based on similar projects that have been done in the past in the organization.
During this phase, analogous or parametric estimating techniques are used.
Final project plan:
At this stage, team members are involved, and information gathered from them is used in the estimation.
Rolling estimates are used every week until the completion of the project.
Why do you Estimate?
Estimating for a project is important to get a fair idea about the size /cost/ timelines for planning purposes. Estimating cost, resources, and time will help to understand when a project will get delivered and how much we will need to spend until completion. Estimates help to set expectations. It helps to show a client what’s going to be done.
Who will do it, at what rate, what currency, and how much tax, and how many hours or days will be required? Estimation can serve as a valuable input to make a significant decision. It also helps in coordination. When several teams are involved, and the dependency of deliverables on a task that one team needs to complete, having near accurate estimates will help.
For example, A system is being built and has the involvement of team A and Team B. If a feature to be built by team A has been estimated to take 10 days to be completed before Team B can make the next feature, Team B can accordingly plan to work on some other deliverable while it is waiting for Team A to build the dependent feature.
Project Estimation Techniques
There are numerous estimation methods, but below are a few main ones commonly used for project estimation.
This is a comparative estimation method, wherein the data from similar projects are taken into consideration while estimating for the current project. It is necessary to make sure that these referenced projects have been successful.
This is probably the most common way people get an estimate. People with hands-on experience and understanding of the project requirements can help get fair estimates on the project.
This is another tried and tested method of project estimation. However, it lacks detailed analysis, which can help assess the project’s success ability.
In this method, each task is estimated individually, and then the estimates are rolled up to give higher-level numbers. This method is more accurate than the top-down method.
Parametric model estimation:
This method auto-calculates estimates using detailed data from previous activities. Though this is a quick method to get estimates, the data for these calculations need to be robust.
Project Estimation Template
- Project Name: The name of the project is estimated
- Project Manager: Person managing the project
- Project Id: Unique identifier of the project
- Project Sponsor: Person funding the project
- Start Date: Expected start date of the project
- End Date: Expected end date of the project
- Project phase / Deliverables: This column lists the project deliverables and the phases that are to be estimated
- Estimated hours: This column estimates the hours required to complete each task, thereby helping to measure the total time required to complete the project
- Resources required: This field estimates the number of resources required to complete each deliverable/task.
- Cost: This column estimates the price for every task/deliverable, thereby helping gauge the total amount the project will cost until completion
- Remarks: Additional comments can be noted in this column.
To conclude, project estimation is essential as it helps get a fair idea of the cost, resources, and time required to complete a project