Creating your estimation tool
An estimation tool is a great asset to a project as it defines a standard way to deliver and size a project.
Getting ready
Before starting, it is important to have an understanding of how long standard tasks take within your organization and which algorithms are used for estimation.
How to do it...
Once you have created the work breakdown structure, reopen this spreadsheet:
- Decide on an estimation algorithm, for example, three point estimation with a weighted average and standard deviation:
- For each task, identify how many hours you estimate a single task or component will take.
- Apply your formula across each task.
- Sum the tasks at the end to get a grand total of effort:
How it works...
Identifying the task drivers, base hours, and a standard estimating tool makes it easier to get a realistic effort for your project. This is, however, only an effort for one resource, and not duration. For an extra step, you will need to add dependencies and resources to a calendar of working days and additional project management time.
There's more...
Many project estimation algorithms are used. The sample spreadsheet uses the following:
- Three point estimation:
Optimistic=base hoursx#Most likely=(base hoursx#)+15%Pessimistic=(base hoursx#)+25%
- Weighted Average with Estimate
E=(optimistic+4 most likely+pessimistic)/6 - Standard Deviation =
(pessimistic optimistic)/6 - Confidence levels based on Weighted Average (E):
Evalue is approximately50%Evalue+SD is approximately85%Evalue+1.645×SD is approximately95%Evalue+2×SD is approximately98%Evalue+3×SD is approximately99.9%
Weighted Average with Estimate (E) takes into account the optimistic, pessimistic, and most likely estimates for each task.
Standard Deviation determines variation from the average. The Confidence levels shown in the preceding bullet list indicate how likely you are to achieve your goals within your estimate, if you combine the different values.
Therefore, if you need an estimate with about 50% probability achievability to actual, then using the Weighted Average (E) value would suffice. If you required an 85% probability of being able to deliver within your estimate, then Weighted Average+Standard Deviation should be used. For information systems, normally 95% is the standard to utilize.
Over a period of time, you can refine these calculations to reflect your environment more accurately once you have the actual values, which can replace the effort drivers and quantity.
Additional information for this topic can be found at: