We all do Time Estimation during our daily lives for tasks we do on a regular basis. When you focus more on business processes, Time Estimation is obviously an integral part of Managing Projects.
(Quick note: This document is by no mean a training on the methodology but a high-level description so that you can understand the essence. Also, this is one version of a Time Estimation Methodology and there are several out there following different approaches with different flavours. You are free to pick and choose and even combine.)
“Our goal here is to make you consider certain aspects which, in time, we tend to forget or take for granted in our estimates.”
You will find when reading this memorandum that it tends to be more geared toward project management and you will be correct in that assumption.
Also, you will notice that we will mention Risk Management which, even though we will not go into details here (refer to my recent blog about Risk Management Methodology), has to be considered when estimating time and effort.
Yes, we know … Time Estimation is kind of obvious. And you are correct! So, as the expression says … let’s “Cut to the chase!”, shall we?
In a business environment, we are quite often faced with outside pressure to make things go faster, to make it cheaper, to sell it as being more affordable, and this is just to name a few. So, when you’re in the Program Management Office, for example, you’re always struggling with these concerns. (Keep an eye open for my next blog about Project Management Office.)
Bottom line is that there’s no magic! Any projects out there must be managed, and a key factor is “How long will it take” so that you can meet your goals. The point is to be REALISTIC in your Time Estimates. As a business, you will make the decision to either cut certain tasks or absorb some cost, for example. Also, this is time ESTIMATION and NOT FORECASTING … there is a difference and we will discuss this separately.
Here is what you should take into consideration when you estimate efforts:
- EFFORT: Base effort of time to perform the task.
- BUFFER: Added to supplement certain controllable variables.
- RISK FACTORS: Additional effort because of a Risk Factor applied to the task.
- PROJECT MANAGEMENT: Effort to coordinate the project.
The Items are in sequence and some are cumulative while others are just add-on; this will all be explained in the sections below. And we’d like to point out that we are not taking into consideration here the concept of a Pricing Model with Billable, Chargeable, Expenses and such.
On another note, you will see us referring to the GOLDEN RULES, well that’s just a term to refer to a best practice based on Emyode’s experience in the field.
Before we begin going through each section, here are the five mandatory elements to consider for a successful Estimation.
OK so let’s begin:
- EFFORT (HR): We are not going to go in details on how to estimate an effort since this is what we do every day with our team members such as when we do our Grooming and Planning sessions. Having said that, if you have to take into consideration Over Time because of cost, make sure you calculate that separately. It will make it easier for budget tracking.
- OVERTIME (%): Sometimes we must perform the work overtime. Obviously, the rules of when overtime starts depends on the Organization you work for, but regardless, you know you may have to deal with it. Once you’ve ESTIMATED the effort for each User Story, you then estimate a % of overtime required to perform the different User Story (or if you want to go more granular by Task, it’s your choice).
- BUFFER (HR): This one is controversial since most people say that Buffer and Risk are one and the same. Our view is that it should be added and that it must be calculated separately, and the reason is that a Buffer is more of a rounding than anything else and that the project you are working on may have no risk per say. Also, a Buffer, especially in a Fixed Fee effort, is important to add since it gives us some flexibility and a comfort level.
- RISK FACTOR (%): For Each User Story (and again you can go by Task if you want), there is an element of Risk associated with it. How you define Risks can be opened to discussion, but here is the list for each level. (For more details, refer to my blog about Risk Factor.)
PROJECT MANAGEMENT (HR): Lastly don’t forget Project Management. Now keep in mind we are not referring to PROGRAM Management which would have to be added Over and Above following the same Golden Rules. So, in this case, focus on the tasks a PM does, namely, but obviously not limited to resource assignment, scheduling, prioritization, coordination with internal and external teams, status reporting and so on. Keep in mind that at the Start and the End of any projects there is a larger demand on the Project Manager.
|Overall a 20% should be added using the BASE EFFORT Estimate. Do not include the Overtime, Buffer or any other Additional Estimates you may have added.|
Time Estimation is a very wide subject with several dependencies depending on your organization, what kind of services you’re offering, how the organization view projects, and so on and so forth. The goal here was just to describe a few principals to keep in mind when estimating efforts regardless of any financial aspects.
Have fun estimating!