tools and techniques of estimating - free

7/31/2019 Tools and Techniques of Estimating - Free

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Licensed for individual use without fee. A commercial license ([email protected]) removes this note: Please report unlicensed commercial use & share in fees levied

c Lo ical Model Ltd 2007 consult Lo icalModel.Net

2

Free Version

This is a complete training course in our project skills series!

And for FREE if

used for personal, individual development!!

No catches everything needed is within this file

If you want to use this intellectual property as a commercial offering thats fine

too as long as you cut me in

I dont want much !!

Pre-arranged commercial use removes this notice, gives you animated slides thatbuild procedures step-by-step, also step-by-step exercise files, instructor notes,suggested time-line for delivery and support

For non pre-arranged commercial use (IE where you charge a fee) I hereby offer you a contract to use this materials,

without prior notice in a commercial context at 1,000 per day or per copy which ever is the greater (thats an offer

and

notice of consideration, use will constitute acceptance

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as soon as I become aware of use I will start

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(c) Logical Model Ltd 2007

[email protected]

3

Estimating Managers 2-Day Course Simon Harris, PMP


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Poor Estimates Are Everyones

Problem Why is my poor estimate your problem?


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5

Domestics

Some pages numbers are omitted it isnt an error it s my means to insert pages later without renumbering everything afterwards


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6

Cheese

I had to do something to earn my current Cheese

Having Cheese makes me happy

The more important that my Cheese is to me the more I want to hold on to it

Change happens: the faceless they will (re)move your old Cheese Noticing small changes in my Cheese helps me anticipate change in advance& adapt to big changes when they arrive

Smell the Cheese often to check for small changes

The world changes, my Cheese is moved: If I do not change I will becomeextinct

I did things last week. I had Cheese last week. If I do things differently nextweek I may not have Cheese

Thinking about not having Cheese makes me afraid Being afraid stops me doing things differently

I have to ask myself What would I do if I were not afraid

When I stop feeling afraid I start feeling good

Imagining myself enjoying New Cheese is the first step leading me to itInspired by Who Moved My Cheese by Dr Spenser Johnson an excellent 45 minute read


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Cheese

Movement in a new direction helps me find New Cheese

The sooner I let go of stale old Cheese the sooner I find New Cheese

It is safer to search for New Cheese than remain in a Cheese-less state Old beliefs do not lead to New Cheese

Beliefs only change when we believe that there is New Cheese to be discovered and enjoyed

The new ideas in this or any course need conscious effort to be understood Worse!, it takes much more effort to put them into use

Examine your Old Cheese for mould ((problems with current working)

Imagine your self enjoying your New Cheese (benefits of new practices)

Consider the steps to move from one comfort zone to a new one Who needs to be involved, What actions, When & What is in it for them

Share your insights & FUD (fear uncertainty and doubt) in class

Discussing implementation challenges helps you prepare for action

Gives comfort knowing others have been & are succeeding (and helps networking)

Promise yourself 1 action now, with a date. On your return to the office plan yourintended achievements with a milestone each Friday till done


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[email protected]

8

Lesson 0: Introductions & Logistics


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Who Are We All?

Name, Role and Organisation: Telling others about yourself

Something about your current cheese


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ExerciseIntroductions

Please appoint a scribe & produce 2 flips charts, firstly.

1m each: Would 1 person record the details of each individual

Their name, role at work and years of relevant experience

Shoe size, favourite colour and birth-day & month

An adjective that describes how you feel about being here

When everyone is done then stick First Flip-Chart-Page to the wall using blu-tac

5m: Secondly a group-wide Flip-Chart-Page capturing

As a group discuss What I want from this course to be of value to me is

Record conclusionsof the discussion on the second flip, either as a single consensusview, or multiple individual needs or any mixture of the two

Transfer to the wall using Blu-tac

3m: Thirdly a Flip-Chart-Page capturing

Please discuss and record

what ground rules

should you

and I agree to

for the course

this week that will maximise your chance of achieving your goal

D b i f


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DebriefIntroductions

What were the steps in the exercise

Which ones gave you any:-

Discovery discourse and disclosure,? Any discomfort, disconnection, dislocation (confusion) ?

What have you learnt or are you learning?

What variations might there be around

Context in which we use the new skill at work from classroom

Process changes to account for different needs

Outcomes required or achieved (intended or not!)

How does what we have covered relate to your problems & needs

What actions and steps will you take to make use

Over what timescales & with whose involvement

C Obj ti


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12

Course ObjectivesTo Be Able To:

Create a working environment in which results achieved arematched to expectations Nothing ever matches the estimate without monitoring & control in theexecution phase

Manage those producing & working to estimates Assess & express balanced terms in the equations:

Work determines resource determines cost and duration

Resource divided by duration determines work and cost

Or any other mix of the constrained, controlled & consequential

Apply skills in sizing cost, time, resource, risk and uncertaintyat varying levels of confidence

Estimate probabilistically

R t M


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Route Map

To The Objectives

9:00 10:30 12:30 15:00

EOD-1 EOD-2SoD Coffee Lunch Tea Coffee Lunch Tea

10:30 12:30

P th T S


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Day 1 Estimating

Introductions & LogisticsWhat is an Estimate, Ranges and Planning reality

Planning Concepts

Estimating Approaches & Techniques

Progress Tracking & Feedback loops

Path To Success

Day 2

Things to count & advanced parametric models

Non-numeric Estimates

Experts & Overcoming the Problems With Them

Estimating for Situations with Less Than Certainty

Adding & Showing Uncertainties

End


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Projects run successfully when they use controls effectively

Our controls include your feedback

I try hard not to offend, bamboozle or bore you. If you have feedback at any time please

advise me in what ever way is comfortable for you so I can act

EG: Comment, in person in class/ at a break/ at the end of day or

Add a note to one of the Ground-Rules flip-charts or

Blu-tac a note or stick a Post-it to the back of the training room door

While comments on the endof event form are always welcomed and acted upon they

are too lateto make the event betterfor you

If I dont know its unlikely I will fix it, If I do know I can at least try

Eg Course pace, topic depth, time given each topic, heating/ lighting, Exercises & debrief,Anecdotes & jokes, Catering or parking, Course notes and pens, etc etc

etc

without limit

Chapter Notes & Actions to Implement


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[email protected]

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Lesson 1: What is an Estimate?

Estimates Are Not G esses


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Estimates Are Not Guesses

What is the difference between a guess and an estimate? What are the components of an estimate?

People rely on estimates

Short-term: pride in a good job well done

Long-term: keep your job

Final analysis: return value to the shareholders

An estimate is defensible at all times

Open to re-estimation when basis of defence changes

The greatest of all gifts is the power to estimate things at their true worth

Frabcois de la Rochefoucauld 1613-1680

Content Of An Estimate ?


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Content Of An Estimate ?

Scale Basis of quantification

Perhaps including sensitivity to factors in basis

Assumptions

Factors used in derivation that are less than 100% reliability

Markers on the scale for optimistic & pessimistic assessment

A range: may be accompanied by a Confidence Level

There is no such thing as absolute worth. You can only estimate what a

thing is worth to you Charles Warner 1829-1900

Use of Estimates


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Use of Estimates

Who needs estimates ? For what purposes do we need estimates ?

In order to quantify project factors and product characteristics

Critical Success Factors

But only in support of decision making!

Basis of our plans & co-ordination of activity with others

Targets for our processes and products

Assessing viability, rationing resources & coordination What qualities make an estimate good (or bad) ?

Accuracy v Precision


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Accuracy v. Precision

What is accuracy?

Truth, relationship between assertion & facts

Inaccurate estimate are useless Agreed?

How can we insure accuracy?

What is precision?

Real world estimates must use a range& confidence level

Achieving Accuracy


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Achieving Accuracy

Estimates are uncertain

Educatestakeholders to understand range & confidence

Educatestakeholders to understand continuous elaboration Promises (IE certainty) WILL include a premiumfor risk

Someone must make visible

provision for uncertainty somewhere in the

projects baselines

Hidden contingency cannot be managed and is habitually wasted

Make uncertainty explicit and place allowances under control

Quote & justify the budget, the confidencelevel, the

contingencyprovision and reservesseparately

Establish the process forrefiningestimates over time

Iterative application of techniques with feedback loops

Early Estimates: Wide Ranges


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Early Estimates: Wide RangesEngineering Reality

Quality of Estimate Width: Height

Requirement/ Heads ofAgreement

Design/ Contract

Business Winnings Reality?

Concept/ RFP, ITT

Probability

Quality of Scope Definition

Planning Horizons


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Project Plan Updated

Project Plan

Updated

Project Plan

Planning Horizons

Monitoring points based on planning horizons

Often impossible to plan the whole project in detail due to uncertainty about

future work, changing environment and business conditions

Starting up a task

Plan the planning

The horizon is not far off

at this point in the

project!

Investigation

Creates the overall plan. Complete

but detail decreases with time

to horizon

Initiation Stage1st Specialist

Stage

2nd

Specialist

Stage

3rd

Stage

Technical work

Run to detailed

plan

Technical work

Run to the detailed

plan

Technical work

Run to detailed

plan

Detailed PlanShort horizon

Refine overall

Detailed PlanShort horizon

Refine overall

Update overall

Plan to

closure

Detailed Plan

Short time horizon

Management Stages


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Rolling Wave Planning


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Actuals

Planning Horizon

Planning

Packages

Rolling Wave PlanningAfter a Stage Boundary

Far TermActivities

Time Now

Near TermActivities

Workpackages

As detailed as is possible with what we know today

Named resourcesDetailed tasksFinal/Definitive Estimates

Generic resourcesActivitiesIndicative Estimates

Uncertainty Decreases As


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Uncertainty Decreases As..

Closer in time and / or better understanding(EG after Design or we have prior experience) Width of range (peak height) matches understanding

Probability

Cost, TimeEstimate

Any Level

Near term and well understood task

Near term and poorunderstanding

Far term and good

understanding

What Is Different In Each Quadrant?


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What Is Different In Each Quadrant?

Clear Goal Unknown GoalWhere ever we are goingit is away from here

Experienced& Skilful

Unskilled,

Inexperienced

What are the

characteristics of each quadrant?

Risks, Rewards, Controls, ?

Increasing

Uncertainty

Increasing Uncertainty

Project Control Assessment


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Project Control Assessment

Score your current project or programme0 10 Score

Purpose Clear Un-Clear _____

Goals Stable Changing _____

Resources Adequate Scarce _____

Schedule Flexible in-Flexible _____

Process Tried & tested Novel _____

Technology Familiar Unfamiliar _____

Resources Dedicated Shared _____

Organisation Project Functional _____

Customer One Many _____

Decisions Swift Slow _____

Decision making In Team Out with Team _____Team Collocated Distributed _____

Project SH*T Factor ______

The least used and most valuable phrase is I dont know

The most important subsidiary phrase is Im currently researching it

Exercise Estimates


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Exercise Estimates

Exercise users guide

1.

Appoint a Project Manager

(Birthday nearest

to today), Scribe

next nearest

Bday & a Reporter

(3rd

nearest)

PMs job to deliver on time!

Reporters job to tell us the results

be ready to tell us more than just what is on the flip-charts

Exercises are designed to make you examine your current workingpractices. You should feel some dislocation, discomfort and discovery duringthem

It is OK (expected even!) to be confused during an exercise

BUT NOT OK to still be confused AFTER the debrief!

During the Debriefs we will always explore any confusion, all questions &

any loose-ends that you raise in exercises

Status Quo


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Status Quo

Step: 3 minutes Brainstorm to a flip-chart a list of Improvementsthat we want to achieve in our estimating performanceStep: 5m Record to a 2nd flip-chart the groups brainstorm underthe title Everything we currently know, or know we dont know

about estimating

Record topics you know of within estimating, eg techniques youve heardof (whether used or not), different approaches, skills & other relevantitems that you can think of

Step: For those finishing swiftly

-

Mark any techniques identified for

how much use you make of them (Eg always, only if relevant,rarely, never) plus how effective they are

Debrief ?


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Debrief ?

How did the group perform?

Purpose of the step timings?

Did you make any discoveries ? Feel any discomfort? Are youleft with any dissatisfaction?

They are often linked

out of our comfort zone

No gain without pain chance for some gain may evoke feelings ofdiscomfort

Are current problems within current knowledge & practices?

What have you learnt about

Trouble creating estimates (before the estimate)

And . After the estimate is provided

Relevance, Application & Adaptation


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The new ideas in this course (or any learning situation) need conscious effortto be understood

It takes much more effort to put them into use

Examine your Old Cheese for mould (problems with current working) Imagine your self enjoying your New Cheese (benefits of new practices)

Consider the steps to move from one comfort zone to a new one

Who needs to be involved & what is in it for them

What actions, by whom & when

Share your insights & FUD (fear uncertainty and doubt) with the class

Discussing implementation challenges helps you prepare for action

Gives comfort knowing others have and are succeeding (& Helps networking)

Promise yourself one action now, with a date. On return to the office planweekly achievements with a milestone each Friday till done



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[email protected]

34

Lesson 2: Planning ConceptsContext for the generation of estimates

Context for Estimates


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Co te t o st ates

Estimates are used to create plans that realistically reflect workto be done Estimates are only meaningful when you know the process that will beapplied to achieve the result

Iterative step: process estimate reassess process

Plan is a process map

How are plans created?

Review of the steps in planning

Consideration of usage comes later when we look at feedbackloops

Development and Maintenance of


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pProject Baseline

Schedule Estimating

Scope

Estimating

Needs or Objectives

Strategic Risk

Needs or Objectives

Strategic Risk

Task List (WBS) &

Work Assignments (OBS)

Task List (WBS) &

Work Assignments (OBS)ResourcingResourcingDependenciesDependencies

Response toTactical Risk

Response toTactical Risk

Finalised

Cost/ Time/ Scope baselines

Finalised

Cost/ Time/ Scope baselines

Monitoring,

Tracking &Control

Monitoring,

Tracking &Control

Cost BaselineCost BaselineScope & Responsibility

Baseline

Scope & ResponsibilityBaselineSchedule Baseline

Schedule Baseline

CostResource Estimatin

Deliverables

Bill of Materials & Quality Description

Deliverables

Bill of Materials & Quality Description

Scope


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pProject, Phase & Work-Package

Customers (& possibly the Boss) view of scope is

Allthe deliverables (NOUNS)

All final deliverables (eg services and physical items)

All

intermediatedeliverables (eg

tasking orders, design drawings)

All

managementdeliverables (eg

progress reports) &

quality activity

Project

Need

Satisfied need

Deliverables(Products)

Phase Boundaries

Work-Packages

ALL the Products = ALL the Tasks


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Crucial first step

Identify all results: deliverableand

projects internal deliverables

Include temporary or throw-away deliverables

Prototypes, mock-ups, test-rigs, stubs & drivers, scaffolding & jigs

Include management and quality products

Risk and issue reviews, assumption analysis, communications plans,resource acquisition

Progress reports, lessons learned & problem diagnosis

Work (i.e. Tasks) derived from product specifications

Include specification of the Grade or Quality required

ALL the Tasks = ALL the Effort


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Every product (noun) has a lifecycle oftasks(verbs) to create it

Include all tasks to do the work

Include all tasks: raw work plus defect creation & defect prevention Include all tasks to check the work is OK

Include all tasks for defect detection

Include all tasks to report the status Include all tasks to rework defects & errors

Include all tasks for defect and error resolution & retest

Include all tasks for repair to reputation & relationships

Work Breakdown Structure


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Project

Need(satisfied need)

Product

BS

Process

Standards

Product

Standards

Quality

Functional Non-

Functional

Management

Ditto

Definition of all thework in the project

Definition of all thework in the project

Hierarchy down to level needed for planning and controlHierarchy down to level needed for planning and control

Specialist

Measuring And Estimation Of Quality


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g yAttributes

Functional specification is common and relatively easy

Text, diagrams and specification languages

Good quality specification is rarer & more important fordetermining cost & schedule

Scale & tests to measure

Best required & worst acceptable

Current & target value (& achievement date)

Best possible (State of the Art)

Convergence of Scope & Quality

Captured in the WBS dictionary

Example: I Want A Fast Car


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How much should we budget & schedule for this project ? Detailed Requirements: Boy racer impressing his friends onthe street

Scale: Acceleration

Test:

Time taken to achieve 60 mph

from standing start Worst Acceptable: 8 seconds

Target

5 seconds

Best Required

4 seconds

State of the Art

3.6 seconds

Example: I Want A Fast Car


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How much should we budget & schedule for this project ? Detailed Requirements: Attempt on World record for wheeledvehicle

Scale:

Miles per hour

Test:

Maximum average speed

achievable over measured mile Worst Acceptable 760 mph

Target

800 mph

Best Required

800 mph

State of the Art

750 mph

Quality DescriptionWBS Di ti


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WBS Dictionary

Provides detail of what is to be produced by the work-packages

WBS dictionary is progressively completed and refined as more is

established during planning & execution Contents

Description: Establish common understanding

Link to all process standardsto be applied during execution

Criteriato be used forproduct acceptanceScope verification dimension of the work-package

Controldetails Eg.

Estimates for all aspects of the work-package: dates, costs etc

Cost-codes for correct booking of work & materials to accounts and for re-

estimating, refining and creation of estimating books

Tasks in PDM/ Network Diagrams


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Only tasks atlowest level ofWBS are used in

networkdependency model

Estimated effortdivided byresource =duration

Duration plus

dependencies =Schedule

ProjectProject

Deliverable 1Deliverable 1 Deliverable 2Deliverable 2 Deliverable 3Deliverable 3

AA BB CC II LL GG HH KKDD EE FF JJ

WBS + Resources & Schedule =C l ti C t & BAC


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Cumulative Cost & BAC

Finallyweknowwhatitwillallcost,

overwhattimescale:whatthe

negativecash-flowlooks

like.

Thepositivecas

h-flowmustalsobe

modelledsotheBusinessCasecan

containmeaningfulDCF

s andNPVs


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47

Lesson 3: Estimating Approaches andTechniques

Context for the use of estimates

Approaches and Techniques


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Always use a combination to cross-validate 1 with another

Approachestimating either top down or bottom up

Cross-check one with the other Generate the values using analogous and parametrictechniques

Answers may be quick but roughorhigher precision later

Gather data from all sources and pass to experts and verify withpeer-groups

Qualify assumptions and detect biases

Always generate three point estimates

Optimistic, Pessimistic & Most frequently occurring

Calculate budget and confidence levels

Estimating Approaches


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Top-down v. bottom-up Top-down: If it is 1m thenlooks like 300k for B, OK? Bottom-up: Looks like B is plus plus

Component A.1

Component A.2

Component A.3

Project

Deliverable A Deliverable B Deliverable C Deliverable D

Component B.1

Component B.2

Component B.3

Component C.1

Component C.2

Component C.3

Component D.1

Component D.2

Component D.3

1m

400k 100k200k

110k

125k

75k WorkBreakdo

wnStructure

WorkBreakdo

wnStructure

Top Down Versus Bottom Up


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Strengths and weaknesses with both

Top-down Produced early

Often created by analogy with previous efforts

Aided by estimating histories (Documented details of last time)

Lacks precision, based on little concrete detail

Cheap, quick, simple, simplistic,

Bottom-up: Increased precision

Not available early in project

More expensive and time-consuming to create

Capable of greater precision

Project uncertainty based on uncertainty described per task

Estimating Techniques


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Analogy

Extrapolation of previously observed results to a new situation

All estimating is analogous (otherwise it would be a guess!)

Identify similarities and differences between historical data and current

context

Parametric

An analogous estimate that uses a mathematical formula

Leads to systematic errors

bad news

Easily fixed once detected

hardly good news

Enabler for continuous improvement in estimating processes

Sometimes known as an estimating relationship

Research shows parametric models are more reliable than their creators!

Parametric Estimates


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How long does it take to cook a chicken ?

What assumptions or facts are material to the estimate ?

How long does it take to analyse a requirement, design a galley,bore a 40mm hole through 20mm plate steel ?Estimators are not modest: if its huge they say so.

Nor are they shy: if its tiny they say so

Analogous Estimates


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How long does it take to cook an ostrich ?

How could we reduce our uncertainty ?

How can we express our uncertainty ?

Estimators do it in groups: top down and bottom up

- PM Proverbs

Exercise: Estimate the following


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Ensure that your estimates are accurate

The weight of the SS Titanic

Debrief


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Now you didnt get any incorrect did you! What were your steps to solving them Suppose you were to do it again (apply now)

What would you repeat or try to do differently next time

Any dj

vu with daily life

Imagine that you have applied these ideas

What steps did you take and who with?

What did you have to adapt in the idea or the people

What have you learnt?


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56

Lesson 4: Project Tracking &Feedback Loops

Use, Not Creation, Is The Issue


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Estimating troubles are more in the usage than the creation

People create estimates, people use estimates

Intention and action are not the same

Deadlines drive action

If it wasnt for the last minute nothing would get done

Nothing gets done until nothing gets done

Estimating requires multiple feed-back loops

Record initial estimates & regularly contrast actuals & estimates

Review up-coming estimates for same sensitivities

Re-estimate periodically & amend analogies or parametric models

Must link to tracking, should link to incentivisation

If 3 days

work took 10 days last month then how long do you expect it to

take next month? Both links apply!

Improving The Individuals EstimatingCapability


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Capability Allow time for estimating activities

Quickest is only best if 1) accurate & 2) precise enough

Good estimates are an expensive investment

Not EVERYTHING demands BEST estimates, but some things DO

Establish (non-financial) rewards for good estimates

Recognition

Choice pieces of work

The economy punishes the company for poor estimates

Should there be personal consequences for poor estimating?

Estimating skills require explanation, coaching, learning

Cascade what you know through the teams

Improving the Organisations Ability


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Organisational ability to estimate improves with historic records

Maintain a metrics database

QMS defines standard work instructions & procedures

Standard tasks = standard durations = standard costs & resources

Standard BS defines products, phases, responsibilities

Budget distribution curve has higher & narrower (less variation)

Natural basis for creation of metrics database

Provides architecture for recording estimates and actuals

Standards in the QMS and WBSs

in the PMO form the basis of an

estimating database

All adds up to competitive advantage

Corporate Development Mode


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Plans reflect realityPlans reflect reality

Improved PerformanceImproved Performance

Mismatch betweenplans & reality

Mismatch betweenplans & reality

Estimate

Probability

Cost, Time

Decisions made on sound basis &even in anticipation of affectsacross all work areas

Decisions made on sound basis &even in anticipation of affectsacross all work areas

Probability

Cost, TimeEstimate

Reality does not

match estimates

Reality does not

match estimates

Probability

Cost, TimeEstimate

Estimates match reality &are therefore usable

Estimates match reality &are therefore usable

Increasing MaturityIncreasing Maturity

Level 0

Level 1

Level 2-5

Sources of Misestimating


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Impact of a 10% increase in work at each boundary?

Minor changes outside of Change Control Plan

Cascade into major unexpected impacts

Design/development delays

Parts lists changes

Manufacturing plans/methods

Project

Need Satisfiedneed

Phase Boundaries

?

1 0 0

1 1 0

1 2 1

1 4 6

1 3 31 6 1

Scope Verification Occurs Throughout TheProject


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Project

If outcome of each of 8 stages is 90% correct, how cumulatively correct is end

product?

What do we need from our internal acceptance process?

?

100 90 81 72 63 54

Project

Need Satisfiedneed

Phase Boundaries

Recognising Progress


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If it isn't finished weve made no progress

0-100 rule: While WIP only the costs are recognised

Task should not span reporting periods

When you start & end in different periods claim 50% of the credit

50-50 rule (and variations for 20/ 80 etc)

% Complete: tasks are objectively measurable

999 bricks laid out of 1000 Milestone based percentage complete

Earnings

are pro-rata but capped until a review is passed

eg Preliminary design review = 15%, Critical design review = 50%

Test

Readiness review = 60%

Tasks that are managerial can use apportioned effort

Rules for Measuring Performance


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Plot the process in a flowchart (or otherplan)

Know what information the data provides

Define exactly how to collect data for the indicator and how tomake the computation Learn to understand variation

Only management can improve a controlled process

Use the numbers to help people improve, not to judge

After Gathering..Analyse

Most important part of estimating, monitoring, correcting

Plan do check act !

EV an Estimating Tool:Project Canine


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j

0 1 2 3 4 5 6 7 8 9 10 11 12 130

102030

4050

6070

8090

100

110120

k

Months

130140150

160170

14 15

BCWSCurve

(PMB)

BAC

ACWP

curve

BCWP

curve

Month 5BCWS: 50k

ACWP: 60kBCWP: 40k

Month 5BCWS: 50k

ACWP: 60kBCWP: 40k

SVCV

VAC

IEAC CPI

EAC (PMs Estimate)

Performance Index: Self-adjusting Parametric model forestimating project outturn

PI = Plan / AchievementPrediction

= Work_Remaining

/ PI

Performance Index: Self-adjusting Parametric model forestimating project outturn

PI = Plan / AchievementPrediction

= Work_Remaining

/ PI

Exercise: EVA


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You have been commissioned to build a stained glass window: You have ahelper, you can eachcomplete 10 panes per day. There are 2,000 panesbudgeted at 15 each

Day 42: panes cleaned and installed 1,100 cost to date is 8,400

Calculate EVM, and graph the results. What day is forcast end date?What is FCAC

BAC =

BCWP = BCWS =

SV = BCWP -

BCWS =

CV = BCWP -

ACWP =

SPI = BCWP / BCWS =

CPI = BCWP / ACWP =

EAC = BAC / CPI =

ETC = EAC -

ACWP =

EVA Graph of Stained Glass Window


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10k

20k

30k

10 20 30 40 50 60 70 80 90 100 110

Durtn =BAC =

CV = =CPI = =EAC = =

SV = =

SPI = =d/ = finish day

Day42

Li d f i di id l i h f A i l li (Li @l i l d l ) hi Pl li d i l & h i f l i d


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68

Lesson 5:

Things To CountNot everything that counts can be counted

Not everything that can be counted, counts.

Einstein

Base Values Vs. Derived Values


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69

How big is this room?

To decorate it how much paint & carpeting is needed?

To commission it how much air-conditioning, lighting & furnitureis needed? Which are basic?

Which answers are derived?

Did you have the skills needed to derive all?

Conclusions?

f f ( @ ) & f

Basics


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70

By trade

Software

Number of use cases/scenario scripts Size

Weighted Methods per Class (WMC) Size, Complexity

Depth in Inheritance Tree (DIT) Size, Complexity

Electrician

Phases in the supply Complexity

Different types of connected device

Complexity

Number of devices in each type

Size

Physical accessibility of cable runs

Complexity

By Phase (E.g)

Initiation

Number of stakeholders

Political dimension

Li d f i di id l ith t f A i l li (Li @l i l d l t) thi t Pl t li d i l & h i f l i d

Deriving Schedule


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71

Once the basic workrequired is known

Insight into howthe work will be conducted

Insight into whowill do the work

Knowledge of the dependency between tasks

Duration: Time taken to deliver the effort or work

Duration = ( Work * %Productivity * %Availability )

Set specific resource availability & productivity at known rates

Longer term planning requires generic resource assessed atorganisational norms May need a multiplier/ divider when adjusting for actual assignment

Licensed for individual use without fee A commercial license (License@logicalmodel net) removes this note: Please report unlicensed commercial use & share in fees levied

Units To Estimate In


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72

1st estimate un-derivedfactors eg raw work(or effort)

Build a wall

46 high * 86 long * 2 courses wide, 8 * 4 bricks, Flemish bond

Therefore 12 bricks high, 12 bricks long * 2 = 288 bricks Write a 1000 lines of code, Write 450 item Bill of Materials,25 members of customer staff to interview for requirements,100 bulk-heads to penetrate

2nd translate to duration according to resource allocation

Work / resource = duration. EG 10 bricks per brickie per hour

288 bricks30 bricks / hour & 2 brickies = 4.8 hours Durtn

1000 loc / 20 loc/hour * 15 hours/week (ie 50% allocation) = 3.3

weeks

Genericresource at standard delivery rateEG 16dpm


Encapsulate Expert Knowledge


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73

Models available in different industries

Eg Construction, software, even epidemiology/ disease control!

EVM !! Factors they formalise must be understood in any estimatingactivity

Use the concepts to appreciate what matters for producing high-quality

estimates

Understand your own cost drivers

Create your own spreadsheets

Spreadsheet always better than a mental model

Audit trail and tracking of results generates huge improvements in estimating

capability


Models in a Wide Range of Fields
http://www.amazon.com/gp/reader/0872011577/ref=sib_dp_pt/104-0252707-6678309#reader-link


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74


A Document Metric:Gunnings Fog index
http://www.amazon.com/gp/reader/0872011577/ref=sib_dp_pt/104-0252707-6678309#reader-linkhttp://www.amazon.com/gp/reader/0872011577/ref=sib_dp_pt/104-0252707-6678309#reader-link


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75

Robert Gunnings Fog Index

Parametric model to estimates the

reading age required to comprehend

a piece of written English

Process

Select a sample

Determine the average number of words per sentence

Determine the percentage of hard words (3 or more syllables that

are not

a) proper names, b) combinations of easy words, or c) made three

syllables by suffixes such as -ed, -es, or ing)

Add the 2 factors and multiply by 0.4

How does this help a to build a nuclear reactor to time cost &importantlyscope?


Complexity Measure for ProceduraSoftware


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76

Size measured in Lines of Code

KSLOCs

Thousands of Lines of Code

NCLOC (Non Comment Lines of Code )

McCabe Cyclomatic Complexity

CC V(g) = E -

N + p

E = number of edges of the graph

N = number of nodes of the graph

p = number of connected components Cyclomatic Complexity Risk Estimation

1-10 a simple program, without much risk

11-20 more complex, moderate risk

21-50 complex, high risk program greater than 50 un-testable program

(very high risk)


Technical Complexity Assessment


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( @ g ) p


77


What Quantities Do We Estimate


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( @ g ) p


78

Step 1: 1m Form-up into pairs or threes with those adjacent toyou Step 2: 3m Brainstorm as many factors as you can that shouldbe / could be estimated in your work-load

Eg Electrical terminations

Step 3: 5m

Sort the factors into a list of those that are basic to

your work and those derived from other factors For the derived suggest the derivations

A starterbasic factors could be keel length or

task duration

A starterderived items could be miles of cable or task duration

Be sure to DESCRIBE each sufficiently to justify your opinions

Many items could be in either/ both category: explain


Debrief


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79

Visualise the steps you used here

Which ones can your recognise have some parallel at work

Imagine the steps that dont yet have a parallel

What would they look like in use in work?

How relevant & useful are they?

How easily implemented and accepted by the team, the boss and the customer

What variations, adaptations, omissions and inclusions might you

need to make?

Learnings: What to estimate

Any variable of project work or product capability E.G

Contract Profit, Staff availability, Efficiency, Effort & skills

required, Risk impact,

probability event horizon, Affect of changes on plans, Assessing

recent progress

achieved

Cost of ownership, MTBF/MTTR, Speed of operation, Response times

Operator

errors per 000 operations,



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80

Lesson 6:

Non-numeric Estimates


Ordinal Estimates


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81

Customer satisfaction

Does 19.6%? 72.8% 82.7% help and is it actually meaningful?

What is minimum acceptable customer satisfaction level?

Pseudo-numeric estimates may be translated to an ordinalnumber 1st, 2nd, 3rd

etc

Tells us RELATIVE and sequenced data not absolutes

Bob was 1st, Bill 2nd

Could be that Bob ran 337.23

Bill ran 337.24

or

4days 8hrs 9 18.6 or 3yrs

Each level needs a description to be usable


Exercise :Creating an Impacts-Scale


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82

We often have to estimate something ordinal like Customer Satisfaction, orCarpet durability

or Risk probability

which might use a scale such as Very-

High, High, Fairly-High, Medium-Plus, etc

Imagine something you have to estimate that isnt measured in metres orkilos

Step 1: 3m: Decide on something you need a scale for

Take an ordinal scale and label (say) 1 to 10

Assign representative statement to the numbers

Step 2: 10mAdd labels to levels 1 through 10 Example

10

7

Project Cancelled

6 3

Loss of 100,000

2

1

No Perceivable impact


Debrief


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83

Which steps were easy to assimilate? What do you feel is most / least comfortable? dj vu with daily life

Adjustments to make next time?

What would you vary if doing again? Maybe in a different context?

Suppose (apply and adapt)

Was it, or when will it be relevant to work?

Easy to take back to work? Hard? Impossible? Irrelevant?

Learnt

Who will need to do what to achieve application?


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Higher-OrderDrivers for Project Estimates


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85

PESTLE

Political

Economic

Social

Technical

Legal

Environmental



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86

What feedback do you have/ How do you want to provide it?

What are your FUDs

The instructor can raise topics as a class discussion if you advise

Promise yourself at least 1 more dated action to implement an idea

Your investment here is only worthwhile if you plan & act to grab the benefits




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87

Lesson 7:

Experts And Overcoming The Problems With Them


Expert Opinion: Source Of Data


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88

Only source of an estimate is prior

experience -

expertise

Anything else is a guess

Either DIY or you must asksomeone else

Asking is a fairly easy way to obtain

estimates

Simple to conduct

Formal or informal

Works with groups or individuals

Applies to all estimable quantities

Process

ID right individuals

Prepare by researching

Interview to agenda

Qualify & quantify data

Build a model

Build workarounds forthe pit-falls


Problems With Expert Opinion

Pi f ll


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89

Pitfalls

Experts have biases

Based on what has happened in recent past NOT what is probable

Some experts are hard work to extract info from

Requires they have the time & inclination

Hard to assess good v. bad opinion

Relies on accurate description of the problem

Expert may have difficulty seeing wood for trees Expertise & experience may not translate well to current need

Difficult to know how to handle divergent views

Requires interviewing (questioning & listening) skills

How do you test an experts estimate?

Test against another experts opinion!

It is useful to know whenthe experts disagree


Gosh is that the time!?...

O th t t th t


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90

One theory states that

Duration = Work / Resources

Reality says

Duration * Resources = 90% Work

Parkinsons Law

After the work is 90% complete then

2

nd

period of equal D * R might = W

Successful estimating requires psychology


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5 + 5 = 13

O th i f k h bit ddi


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92

On the way up every piece of work has arbitrary paddingadded

At the top

the padding is arbitrarily stripped out

Result: estimates lack reality & transparency Why do we do it?

This IS one of *the* problem with estimating

To prevent both stupidities: Create

Best case & circumstances to achieve it& likelihood

Worst case & circumstances to suffer it& likelihood

Most frequent outcome (most likely) & likelihood

Calculate the as likely as not (50%)

case


Biases

O fid


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93

Overconfidence

Piece of cake, no problem

Harder the task more pronounced the overconfidence

Over prudence

Padding when real or imagined consequences exist

Confirmations

Look for supporting evidence and ignore contradictory facts

Option stopping: stop looking when point proved

Anchor

The first number you say is the ball-park Ill stay in


Delphic Oracle: Concept

An iterati e techniq e sing the skills of man people to


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94

An iterative technique using the skills of many people toconverge on the best estimate available

Typically converges in 2 to 3 rounds or

shows polarised views

Underlying assumptions exposed Allows the PM to assess how fair estimates received are

Variations between estimators will be traceable

To differing views about assumptions

To differing (flawed?) estimating processes

To differing view of the product creation process

Needs access to experts

Works well via eMail


Delphic Oracle: Process

Process


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95

Process

1. Supply available information to estimating panel2. Request each expert estimates separately

Recall that an estimate comprises scale, range, driving factors and known

facts, assumptions plus the estimating basis

3.

Gather all estimates, collate and circulate

4. Optionally: Participants discuss estimates5. Each expert amends estimates as they think fit6. If range within estimates un-acceptable return to step 37. Otherwise record estimating range & confidence level


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Debrief

Learnt


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97

Learnt Felt Steps Relevance Use Adaptation Imagine using this techniques

How does it feel?

What are the implementation challenges


What needs recapping?


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98

What needs recapping?

Any feed-back or FUDs to discuss?

Note 1 (or more) promises to yourself to realise benefits from our investment

1. Outcome sought

Participants & WIIFT

Actions & Timescales

2. Outcome sought



3.

Outcome sought






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Lesson 8:

Estimating For Situations WithLess Than Certainty


Confidence

What is confidence (or uncertainty)


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100

What is confidence (or uncertainty) How do you express confidence

How do you calculate it !?


3 course Dinner, with wine for 10

How confident are you? 16.Your budget is 480 _______


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101

y

1.

Your budget is 30

___ 0%_

2.

Your budget is 60

_______

3.

Your budget is 90

_______

4. Your budget is 120 _______5. Your budget is 150

_______

6.

Your budget is 180

_______

7.

Your budget is 210

_______

8.

Your budget is 240

_______

9.

Your budget is 270

_______

10.Your budget is 300

_______


_______


_______

13.Your budget is 390 _______14.Your budget is 420 _______


_______

17.Your budget is 510 _______


_______


_______

20.Your budget is 600 _______21.Your budget is 630 _______


_______


_______


_______


_______


_______


_______


_______

29.Your budget is 870 _______30.Your budget is 900 __ 99%_

State Assumption & Constraints

Plot on following axis


Confidence Over a Range?

Confidence doesnt change 1:1 with increasing budget


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102

Confidence doesn t change 1:1 with increasing budget

Cumulative confidence typically follows an S

curve

Incremental confidence typically a skewed bell shape

Confidence100%

0%30 per interval

30 120 210 300 390 480 570 660 750 840 900


Confidence

How confident are you the budget/ schedule will be enough ?


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103

y g g

Resources (eg

days) Budgeted

50%

100%

75%

25%

0%

May achieve it this

quick/cheap

Good chance of this

~80%

~95%

Almost a

sure thing!

~20%

Cumulative

Confidence

IncrementalConfidence

Too risky! Wastefull?


2pt v. 3pt

2pt all that is required if we know the shape of the curve and that


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104

p q pit is symmetrical

Just the limits: Minimum and Maximum

If the curve is skewed 3pts are minimum required

The limits

and the peak

(Best, Worst and Most Likely

or Mode)

ML

Min MaxML &

Avg &Middle


Take an average with most likely more heavily weighted( B t W t (M t lik l * 4) ) / 6

Three Point Estimates


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105

g y y g ( Best + Worst + (Most-likely * 4) ) / 6

Common

More likley

Best we canhope for

Most Likely (highest point)

& Middle & the Average value

More likelyWorst case

Budget plus a 1 sixth

Budget plus 2 sixths

20% 80%

Mean (& mode & median)

50% 50%

80% 20%

95% 5%

Revised Most Likely

& Middle

Where is revised 50-50?Simple Average will ignore MOST

likely

50% 50%


Budget Allocation

What we should budget is based on required confidence0% d ((B (M lik l * W i h ) W ) / # )


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106

g q50% or expected

= ((Best + (Most likely * Weight) + Worst) / # terms)

Weighting normally 4 so # terms normally 6

E

= (Best + 4ML + Worst)

680%

= 50% + (Worst

Best)

6

95%

= 50% + (Worst

Best)

3

When allocatingthe task

give the minimum of ML & e 1SD

e

6 SD


Exercise: 3pt Arithmetic

Best + Worst +(Most likely * 4) / (6)


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107

( y ) ( ) (Worst Best ) / 6

Notice how budget moves towards tail Contingency based just on width

Try theseB = 10

ML = 20W = 30B = 10

ML

= 28

W = 30

B = 10

ML

= 12

W = 30

B = 18

ML

= 20

W = 22

Try theseB = 10

ML = 20W = 30B = 10

ML

= 28

W = 30

B = 10

ML

= 12

W = 30

B = 18

ML

= 20

W = 22


Define Levels Of Precision

Rough Order of Magnitude

What was the difference between an estimate producedd d d d


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108

g g Estimate must be interpreted as between upper and lowerlimits Budgetary Reduced range Definitive Final range

time

Estimate

ROM

against a Need and one produced against aRequirement?

Theseterms

onlymeanthesamet

hing

toeveryoneif

weAGREEtheir

definitionsin

advance!

Youmightse

eROMas40

%and

Iseeitas-40to+40

0%

Thesetermsonlymean

thesamething

toeveryoneif

weAGREEtheir

definitionsin

advance!

Youmigh

tseeROMas

40%and

Iseeitas-40to

+400%


Improving Precision Over Time

Range narrows & skew changes over time


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109

g gAt start-up1SD

e

6 SD

Min

Max

Most

Likely

After design

Sta

rt-up

Prelim

inary

Desig

n

Detaile

d

Design

Post-f

act

timeMin

Max

MostLikely

Cross-section atstart-up Plan View

Cross-Sectio

@ DetailedDesign


Qualityof estimate indicates natural variabilityof underlying process Indicated by ratio of the contingency to budget

Improved Estimates


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110

Indicated by ratio of the contingency to budget

Contingency : Budget

2 : 16

(1 in 8 or12%) worse than 0.3 : 16 (1 in 50 or2%)

10% or less

Treat 1sd as 80% confidence & 2sd as 95%

Between 10% and 20%

Only credit 1sd as 70% & 2sd as 80%

Anything worse requires return tothe WBS to decompose the task

Likely the task includes a discreteriskthat is distorting the estimates

Worth investing

effort to improve estimate

One SD

12 13 14 15 16 17 18 19


Assignable Causes & Random Variation

Distinguish random variations& those with a specific cause


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111

Sign your name 10 times

Imagine someone bumps into you on 1 signature

Actual results inexactly match estimates due to variances

Estimating basis & range must account for random variations

Risk/ contingency process should account for assignablecauses

Upper Control Limit

Out of tolerance


Three Parts To Any Estimate

3 Parts of a budget in any quantity (Time, money)


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112

That part derived from the core of the work to be done

That part allowed for as random variationsnatural to the processand product

May be possible to define cause & effect but we choose not to

Minor, often many in number both good and bad

That part allowed against specific causesof variation

Potential problems (& opportunities) that we can identify and assess

probabilistically not deterministically

Risks! Forth element may be reservesagainst unexpected

Can only be a guessTheDr

ivetowork=Miles/Ve

locity

Traffic-light

s

+Delaydueto

rain

+Delaydue

toaccident

- Speed-upduetoscho

ol-holidays

TheDrivetow

ork=Miles/Veloc

ity

Traffic-light

s

+Delaydueto

rain

+Delayd

uetoacciden

t

- Speed-upduetoschool-h

olidays

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