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Guesstimates to Estimates:
What can we do to get it right?
Presenter: Richard Vail, PMP
Join the conversation about this web seminar on Twitter!
Follow @ASPE_SDLC and use hashtag #ASPEEVENTS
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Learning Objectivesfor this Web Seminar
Clarify the use of some specific termsrelated to estimating
Identify some useful tools for estimating
Explore some concepts of good
estimating
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Definition:
To form an approximate judgment or
opinion regarding the worth, amount,size, weight, etc.
Estimate (verb)
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Estimating
Concept True estimates are
based on
historical data.
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Estimating
Concept
All estimates should beexpressed as a range.
The range associated
with the estimatereflects ourconfidence level in the
estimate.
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Definition:
The degree to which a set of inherent
characteristics fulfills requirements.PMBOK Guide
Fitness for use
Quality (noun)
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Which is value is a more accuratemeasure of the temperature?
78.634519
or
77
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Definition:
The condition or quality of being true
or correct; Freedom from error ordefect.
Accuracy (noun)
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Definition:
The state or quality of being
strictly defined.
minutely exact
something with no variation
Precision (noun)
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Estimating
Concept When making estimateswe are not trying to be
precise but we aretrying to be accurate.
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Definition:
To arrive at or commit oneself to an
opinion about something without havingsufficient evidence to support theopinion.
Guess (verb)
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Definition:
An estimate without substantial
basis in facts or statistics.
Guesstimate (noun)
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Estimating
Concept A guess is a guessand should beacknowledged as
such.
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Different in different industries.
Used when only high level
information is available, detail levelshave not yet been defined.
PMBOK Guide, page 168 says:+ or 50%
ROM (Rough Order of Magnitude)
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ROM Estimates should only be usedto decide IF we want to take thenext step.
The next step being a more detailed estimate,which will require effort and expense on our part
to produce.
ROM (Rough Order of Magnitude)
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Definition:
A measurement of the size or
amount of work to be done.
Effort/Work Estimate
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Definition:
We might read on a set of plans to
build a home that there is an effortestimate of 600 hours of rough
carpentry work to build the house
described in this set of plans.
Effort/Work Estimate
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Definition:
An Effort or Work Estimate
adjusted for resources.
Duration Estimate
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Definition:
Duration = Effort/Resources
Duration Estimate
If there are 600 hours of rough carpentrywork to build this house and we have two
qualified carpenters, we would expect the
duration estimate to be approximately 300hours.
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Definition:
Most reliable or complete: Based on
substantial historical data with thedata tightly correlated around themean of the data.
Definitive Estimate
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Definition:
An estimate with a very large
distribution in the range of valuesused to generate the estimate.
Probabilistic Estimate
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Probabilistic/DefinitiveEstimates
Large distribution in
the range of the
estimating data
Lots of closely
correlated data
Probabilistic
Estimates
Definitive
Estimates
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Techniques of Estimating
Analogous Estimates
Parametric Estimates
Delphi Estimates
Three Point Estimates Triangular
PERT
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Techniques of Estimating
Analogous Estimates
An estimating technique that uses the values of
parameters, such as scope, cost, budget and
duration or measures of scale such as size, weight
and complexity from a previous similar activity or
project as the basis for estimating the same
parameter or measure for a future activity or
project.
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Techniques of Estimating
Parametric Estimates
An estimating technique that uses a statistical
relationship between historical data and othervariables to calculate an estimate for activity
parameters, such as scope, cost, budget, and
duration.
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Techniques of Estimating
Delphi Estimates
An information gathering technique used as a
way to reach a consensus of experts on a subject.(Time estimates, Cost Estimates, Risk
Identification, etc.) The experts on the subject
participate in this technique anonymously.
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Delphi Estimates
John
SharonGeorge
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Delphi Estimates
John = $ 38,000
Sharon = $ 34,000
George = $ 18,000
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Delphi Estimates
John = $ 38,000
$ 28,000
Sharon = $ 34,000
$ 29,000George = $ 18,000
$ 26,000
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Techniques of Estimating
Three Point Estimates
Two types:
1.Triangular - Three Point Estimates2.PERT - Three Point Estimates
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Techniques of EstimatingThree Point Estimates
Triangular Estimates
Ce = CL + CM +CH
3
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Techniques of EstimatingThree Point Estimates
Tp - To6
Standard Deviation Formula
35
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35
Value to seven decimals Rounded
1 68.2689492 % 68 %
2 95.4499736 % 95 %
3 99.7300204 % 99 %
4 99.993666 %
5 99.999942 %
6 99.999999 % Six Sigma
Standard Deviation ( ) = A measure of dispersionaround some central point. Usually the MEAN.
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Normal DistributionNormal Curve
X-3s -2s -1s +1s +2s +3s
Techniques of Estimating
Mean = 50/50
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Normal DistributionNormal Curve
X-3s -2s -1s +1s +2s +3s
68%
Techniques of Estimating
Mean = 50/50
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Normal DistributionNormal Curve
X-3s -2s -1s +1s +2s +3s
68%
95%
99%
Techniques of Estimating
Mean = 50/50
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Techniques of EstimatingThree Point Estimates (application)
Lets say that we are trying to estimatethe length (in days) that we think a specific
task will take.
We consult with the individual that is expected todo the work as well as some other individuals that
have done similar tasks in the past.
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Techniques of EstimatingThree Point Estimates (application)
There seems to be a general consensus that themost likely number of days that it would take would
be 22 days.
An optimistic estimate would
be16
days, and a reasonablepessimistic estimate would be34 days.
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Techniques of EstimatingThree Point Estimates (application)
Te = 16 + (4 *Tml) +Tp
6
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Techniques of EstimatingThree Point Estimates (application)
Te = 16 + (88) + 34
6
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Techniques of EstimatingThree Point Estimates (application)
Te = 138
6
= 23 days
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Techniques of EstimatingThree Point Estimates (application)
Standard
Deviation =34 - 16
6
= 3 days
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Techniques of EstimatingThree Point Estimates (application)
Standard Deviation = 3 days
PERT Estimate = 23 days
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Normal DistributionNormal Curve
X-3s -2s -1s +1s +2s +3s
Techniques of Estimating
Mean = 23 days
50/50
Chance
One Standard Deviation= 3 days
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Normal DistributionNormal Curve
X-3s -2s -1s +1s +2s +3s
Techniques of Estimating
Mean = 23 days
+ 3 days = 26 days- 3 days = 20 days
One Standard Deviation= 3 days
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Normal DistributionNormal Curve
X-3s -2s -1s +1s +2s +3s
68%
Techniques of Estimating
Mean = 23 days
+ 3 days = 26 days- 3 days = 20 days
16/84 84/16
One Standard Deviation= 3 days
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Normal DistributionNormal Curve
X-3s -2s -1s +1s +2s +3s
Techniques of Estimating
Mean = 23 days
- 6 days = 17 days + 6 days = 29 days
One Standard Deviation
= 3 days
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Normal DistributionNormal Curve
X-3s -2s -1s +1s +2s +3s
95%
Techniques of Estimating
Mean = 23 days
- 6 days = 17 days + 6 days = 29 days
2/98 98/2
One Standard Deviation
= 3 days
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Techniques of EstimatingThree Point Estimates (application)
Lets consider two sets of PERT estimates
Set 1:
Optimistic Estimate = 16 days
Most likely Estimate = 22 daysPessimistic Estimate = 34 days
Optimistic Estimate = 10 days
Most likely Estimate = 22 daysPessimistic Estimate = 40 days
Set 2:
PERT Estimate = 23 days
Standard Deviation = 3 days
PERT Estimate = 23 days
Standard Deviation = 5 days
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Techniques of EstimatingThree Point Estimates (application)
The standard deviation also serves as an
expression of our confidence level in theestimates.
An estimate of 22 days with a standarddeviation of 3 days provides us with a
reasonably limited range of expectation for this
estimate. In other words, we are prettyconfident in this estimate.
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Techniques of EstimatingThree Point Estimates (application)
HOWEVER !
An estimate of 23 days with a standarddeviation of 5 days is an estimate that weare much less certain about.
i h
The VALUE of the estimates
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Quality of Historical Data
Quantity
ofHistorical
Data
Low
Low High
HighLimited Range
Estimates
Wide Range
Estimates
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Estimating ConceptDempsters
Triangle
SCOPE
TIME COST
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Estimating
Concept
Dempsters Triangle
You must estimate
scope first, thentime, and ONLY
then can you
estimate costs.
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Estimating
Concept There are no factsabout the future,
there are onlyestimates.
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Estimating
Concept Documentation(lessons learned) can
provide greatinsight to assistus in becoming
good estimators.
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Rough Order of Magnitude
Is a TYPE of estimate
Delphi Technique
Parametric Model
Analogous
Three Point EstimatesAre TECHNIQUES of estimating
What we have discussed
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What we have discussedin this Web Seminar
Clarify the use of some specific terms
Work with some estimating tools
Explore some concepts of good
estimating
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Questions?
If you have questions for Richard, please submit them in the
Q&A function at the bottom right hand side of your screen.
If we do not get to your question, they will be answered byRichard and posted to the ASPE-SDLC blog. You will
receive a link to that blog post in the next few days, along
with a copy of todays slides and a link to the recording of
todays seminar.
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