project estimating process

ProjectN MotionProject Estimating

Getting Started

What is an Estimate?

– PMBOK Definition of estimate• An estimate is defined as a quantitative

assessment of the likely amount or outcome.

– Importance of precision in estimating• Precise estimating in today’s business

environment is crucial to the success of any project. A well compiled estimate sets the groundwork for successful project planning, and management of time, cost, and resources.

Project Management Body Of Knowledge (PMBOK)Project Time Management KA

Project Time management

Estimate Activity

Resources Process

Estimate Activity

Durations Process

Getting Started

Process Overview

• Requirements for process or project presented

• High level estimate (rough order of magnitude) compiled

• Various estimating techniques are reviewed and best fitting is selected

• Estimate is performed• Estimate is reviewed• Estimate is presented

The Estimating Process

Getting Started

Build a WBS Detailed task list

Generate Statement of WorkIncluding Assumptions

Identify System RequirementsWith Client

Assign Project ManagerResponsible for estimating & execution

Identify Opportunity

Review with Client

Write Proposal

Identify Risks & Calculate

Contingencies

Conduct Group Estimating

Session

Getting Started

Estimating Best Practices

• Expectations • Multiple Estimates • History • Review • Document

Getting Started

Estimating Techniques

• Expert Judgment• Analogous Estimating• Parametric Estimating• Bottom-Up Estimating• Reserve Analysis• Vendor Bid Analysis• Three Point Estimate

Expert Judgment

Other Internal Units

Subject Matter Experts

Industry Groups

Stakeholders

Professional & Technical Associations

Consultants

Analogous Estimating

Maybe Faster to Execute

Less Costly

Limited amount of Data

A form of Expert Judgment

Based on Past Project Information

Parametric Estimating

Produces High-Confidence Estimate

Analyzes Trends

Utilizes Current Statistical Information

Based on Historical Information

Bottom-Up Estimating

Break down activities into

smaller units of work

Estimate the resources for each

section of work

Combine the estimates into a total amount.

New Drug

Project Manageme

nt

Planning

Procurement

Administration

Research Phase

Lab work

Clinical Trials

Market Research

Design Phase

Package Insert

Marketing Strategy

Production Line

Production Phase

Roll Out Phase

16 people

10 Consumers

17 people

5 people

Vendor Bid Analysis

When using a vendor, the cost of their services can be

determined by an RFP (request for proposal). The RFP is sent to

a list of approved vendors.

Reserve Analysis

• Managerial Reserve

• Contingency Reserve

Getting Started

Three Point Estimating

Weighted Average FormulaFinal Estimated Duration = (Pessimistic Estimate) + (4 X Realistic

Estimate) + (Optimistic Estimate) 6

Standard Deviation FormulaStandard Deviation = Pessimistic Estimate – Optimistic Estimate

6

Resource EstimatingAdvertising Workshop

Human Resources

Operations

Trainer

Content Writer

Graphic Designer

Equipment

Operations CPU

Writers CPU

Designers CPU

Office Printer

Consumables

Maps

Training Booklets

Pens

Meals for Delegates

Logistics

Training Venue

Travel Budget

$3,000

$1,000

$1,000

$50

$1,000

$2,000

$5,000

$25,000 Total

$1,000

15 Staff

5 Trainers

$2,000

Inputs to Resource Estimating

Scope Baselines

Project Schedule/Resource Calendar

Activity List/ Human Resource Plan

Project Management Cost

Risk Register

Organizational Process Assets

Enterprise Environmental Factors

Outputs to Resource Estimating

Activity resource requirements

Resource breakdown structure

Project document updates.

Getting Started

Duration Estimating• Estimating Duration Overview• Process Inputs• Estimating Techniques• Process Outputs

Getting Started

Process Inputs

• Activity List• Activity Attributes• Activity Resource Requirements• Resource Calendar• Project Scope Statement• Organizational Process Assets• Enterprise Environmental Factors

Getting Started

Process Outputs

• Estimated Activity Durations• Project Document Updates

Estimating Cost to Initiate Projects

Estimates are usually needed to raise funds, agreement of

contracts with vendors, resources requested and a

timeline for the project picked.

Establishing a Budget and Budgeting the Timeline

A project needs to be broken down into activities. Then the overall

project costs can be calculated by estimating the individual activity

costs.This process of totaling costs by

activities is called cost aggregation.

Getting Started

In Closing

Getting Started

Sources• http://www.pm-primer.com/• http://www.projectmanagementdocs.com/• http://www2.cdc.gov/cdcup/library/• http://doit.maryland.gov/sdlc/documents/• http://pm4id.org/9/1/• http://pmstudycircle.com/2012/06/4-tools-to-estimate-costs-in-the-

project-management/• http://www.free-management-ebooks.com/faqpm/cost-03.htm• https://www.project-management-prepcast.com/• Rad, P. and Anantatmula, V., 2010, Integrated Project Planning, Berkeley

Heights, NJ: Project Management Excellence.• (ed), Rodney Turner. ( © 2014). Gower handbook of project management,

fifth edition. [Books24x7 version] Available fromhttp://common.books24x7.com.ezproxy.lib.uh.edu/toc.aspx?bookid=64390