project estimating process
TRANSCRIPT
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