Project Estimating Sample

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

 Tools and Techniques Overview

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

 Definitive Estimates.

 Help and References

 Additional Questions
    Training Goals

 To understand Estimating Tools and
 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,
     •   Based on documented
There are three primary estimating
  techniques/types used by OIS.
               OIS Primary Estimating
       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)

         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.
            --When is it

 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
      Estimating Spreadsheet.
ROM Parametric Estimating
  Parametric Estimating Steps
   How do I do a Parametric Estimate?

1. Complete the Business and
   Technical Complexity Assessment
2. Enter results in ROM Parametric
   Estimating Spreadsheet.
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
4.   Apply expert judgment and decide on estimate.
5.   Document the estimate and estimating
       Do NOT use Rough-Order-of
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%‖
 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
                    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
    What do I need to do an
    Intermediate Parametric
       Detailed Estimates of an
      early phase.
      Intermediate Parametric
      Estimating Spreadsheet.
Intermediate Sample Project
  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
         Delphi Estimating
       What do I need to do a
       Delphi Estimate?

 A Group   of SMEs
 The product description
and Work Breakdown
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
4.   Review/revise estimates.
5.   Continue step 2-4 until consensus is reached.
 --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
 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 –
 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
 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
        PERT Estimating
       What is a PERT Estimate?

    Program Evaluation Review
•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--
What do I need to do a PERT?
 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 –
       phone - 378-2101 x 236
Additional Questions
Please take some time for
Class Evaluation!

Description: Project Estimating Sample document sample