# Project Estimating Sample

Document Sample

```					Putting the Project
Pieces Together
Estimating Training
Agenda Items
 Estimating Introduction

 Tools and Techniques Overview

 Rough-Order-of Magnitude (ROM)
Estimates
 Intermediate Estimates.

 Definitive Estimates.

 Help and References

Training Goals

 To understand Estimating Tools and
Techniques.
 To learn enough about the various
methods to use them effectively.
 To know where you can access more
information and supporting materials.
Estimating Introduction
What is an estimate?
• An approximate judgment or
opinion regarding the value,
amount, size, weight, timing,
etc.
•   Based on documented
assumptions.
There are three primary estimating
techniques/types used by OIS.
OIS Primary Estimating
Types
   Rough-Order-of-Magnitude
(ROM) Estimates
( + - 50%)
   Intermediate Estimates
(+ or – 30%)
   Definitive Estimates
(+ or – 20%)

One technique or all may be used on a project.
Rough-order-of-magnitude (ROM)
Approach

What is it?
 An  estimate obtained based on
very limited data.
 Consider to have + or – 50%
accuracy range.
 Usually the first estimate
developed or requested.
Supplies a range of values rather
than a single estimate.
Rough-Order-of-Magnitude
--When is it
Appropriate?

Three Key Questions:
 What is   the Purpose of the estimate?
 How   precise of an estimate do I NEED?
 How   much time do I have?
ROM Estimating Techniques
 Parametric Estimating - uses   a
statistical relationships
 Analogous Estimating - Using
actual or historical data, a
form of expert judgment.
--Both can be used with a limited
amount of information
Parametric Estimating

What do I need to do a
Parametric Estimate?

 Initial business and
technical complexity score.
ROM  Parametric
ROM Parametric Estimating
Parametric Estimating Steps
How do I do a Parametric Estimate?

1. Complete the Business and
Technical Complexity Assessment
tool.
2. Enter results in ROM Parametric
3. Make adjustments to estimate.
Analogous Estimating

What do I need to do a
Analogous Estimate?

 A recognized group of
technologists and
estimating experts.
 The product description
or Product Charter.
Analogous Estimating Steps
How do I do an Analogous Estimate?
1.   Identify similar projects or activities.
2.   Obtain actuals or historical data. How much did
the similar project or activities cost?
3.   Re-evaluate and document the similarities and
differences.
4.   Apply expert judgment and decide on estimate.
5.   Document the estimate and estimating
assumptions.
Do NOT use Rough-Order-of
Magnitude…
When a precise or high level of confidence in
an estimate is needed!
Intermediate Approach
What is it?
  Used in support of a preliminary plan, a
partial plan, or a plan that does not require
precise estimating.
 Considered to be within ―+ or – 30%‖
accuracy.
 Often developed to support
the project plan in the early
phases of the project.
Intermediate—When should
I use it?

Four Key Questions:
   What is the purpose of the estimate?
   When is an estimate needed for the project?
   What level of precision is needed?
   What is the estimate intended to cover?
Intermediate Estimating
Techniques
 Parametric Estimating
 An  estimating technique that uses a
statistical relationship between data
and other variables to calculate an
estimate. A Mathematical model.

--Both require a     (Percentage Based Estimating.)

lower level of      Delphi Estimating
detail about the      The Delphi estimating technique
uses a group of subject matter experts
project to be        who develop estimates independently,
discuss differences and assumptions,
defined.             and go through one or more revision
cycles, until a single estimates is
agreed upon.
Parametric Estimating
(Intermediate)
What do I need to do an
Intermediate Parametric
Estimate?
 Detailed Estimates of an
early phase.
Intermediate Parametric
Intermediate Sample Project
Percentages
Parametric Estimating Steps
How do I do a Parametric Estimate?

1. Adjust the recommended work
effort percentages
2. Enter the total known dollar and
duration estimates for the early
sub-phase.
Delphi Estimating
What do I need to do a
Delphi Estimate?

 A Group   of SMEs
 The product description
and Work Breakdown
Structure
Estimating Facilitator
Delphi Estimating Steps
How do I do a Delphi Estimate?
1.   Gather written estimates from the experts for each item
in the WBS Poll group and write estimate on a flipchart
or whiteboard (no discussion).
2.   If estimates are the same, go to next item estimated and
repeat this step.
3.   Discuss differences and assumptions. Rethink if
necessary
4.   Review/revise estimates.
5.   Continue step 2-4 until consensus is reached.
Consensus
--Consensus means either each
estimator strongly agrees with the
estimate or can live with it.
--Consensus is not reached if an
estimator strongly disagrees with
the estimate.
Definitive Approach
What is it?
 Used to develop the precise
estimates needed to tactically
manage and complete a
project.
 Considered to have a
―+ or – 20%‖ accuracy.
 The most accurate estimate for the
amount of work and resources.
 The estimate the organization will
commit to for the project baseline.
Definitive Estimate
--When is it Appropriate?
 When the project needs to commit to an
estimate that is likely to be within + or –
20%?
 Enough information has been obtained
by the project to accurately estimate
what it will take to complete the project.
 The organization can wait
for a precise estimate to
be formed.
Definitive Estimating
Techniques
 Forecasting                             --Variations on the
   Requires a strong historical base   use of three
 Triangulation
estimates, most
optimistic, most
 Range                                   likely and most
pessimistic to
 PERT (Recommended
determine a single
Approach)
estimate.
PERT Estimating
What is a PERT Estimate?

Program Evaluation Review
Technique
•Uses optimistic, pessimistic, and
most likely estimates.
• Most likely estimate is weighted
more heavily
PERT Estimating
Other Facts
-- One single estimate is not always accurate and by using three
estimates, risk factors can be incorporated.
--Using identified risks to estimate:
Most pessimistic (many risk will occur) + most likely (weighted average
number of risks will occur) + most optimistic (few risks will occur)/6
= The Single, most accurate estimate.
Estimate = Pessimistic + (4 x Likely) + Optimistic / 6
PERT Estimating--
Prerequisites
What do I need to do a PERT?
 WBS
 PERT Analysis Formula

 Sources for estimates
PERT Estimating Steps
What steps do I use?
1. Ascertain the most optimistic, most
likely and most pessimistic estimates.
2. Use the PERT formula to calculate a
single estimate.
3. Apply the single estimate to each item
in the WBS.
Wrap It Up!
Help and References

   Available on the PMO Web site or in hardcopy
   Project Management Process Guide
   Estimating Templates
   Estimating Examples
   Estimating Technique - Assessment
   Contact the PMO for assistance
   hardcopy binder of materials
   email – Sanford.Kahn@state.or.us
   phone - 378-2101 x 236