Case Study – Scope

Management
The Estimating Problem
Estimating technique is the process of estimating the duration of a project. It is a significant part of
the planning process of a project. Estimating is a best guess and it is well thought out based on using
various estimating techniques as well as all available resources related to a project.
Barbara’s company successfully won a competitive bid. As the Project Manager assigned on the
project, she was not part of the bidding process, but she had knowledge and experience about
estimating projects. Barbara immediately believed that the estimating technique used by the
estimating group was inaccurate and would cause the project to have a late delivery. Thus she
consulted with Peter who had worked on a similar project to determine the best estimating technique
to utilize for this project.

How many different estimating techniques were

There are three estimating techniques discussed in this case study.

1. Analogy estimate technique: It is mentioned by Peter when asked by Barbara about the
accuracy of the estimate provided earlier by the estimating group.
This technique uses one or more similar past projects to estimate a range of project parameters of
the current project. The project parameters that can be evaluated by this technique include project
cost, budget, scope, expected duration among others.

This technique is mostly used to estimate a particular parameter when information about that
parameter within the current project is unavailable until a later day.

This technique is a form of expert judgment that is most reliable when the previous activities are
exactly similar to the current project, and team members have the expertise necessary to estimate
accurately.

2. The three-point estimating technique: It was the technique used by the estimating group to
arrive at project duration of 12 weeks with one grade 7 employee.

The three-point estimating technique is considered to be one of the easiest and accurate estimating
techniques among project managers. It is likely that for this reason the estimating group settled and
believed in it.

In this technique, the optimistic time calculated was 4 weeks, most likely time was 13 weeks and
pessimistic time was 16 weeks.

It makes it possible for several members of the estimating team to contribute and provide their input
during the estimation process.

The technique offers a wide range of project estimates and calculates either average or the weighted
average.

The PERT (Program Evaluation and Review Technique) method uses three-point estimating, but it
takes a weighted average of the three points, with the ‘most likely’ guess carrying more weight.

3. Triangular Distribution: It is a technique where all 3 of the estimates (optimistic, most likely
and pessimistic) have an equal likelihood of occurrence.

If this technique was used then the final estimate would have been 13 weeks which was closer to 14
weeks which Barbara had estimated.

A difference of 1 week seems small but it can cause late delivery of the project resulting in penalties
and loss of reputation for the firm.
Few more estimating techniques:
➢ Top-Down Estimate: Once more detail is learned on the scope of the project, this technique
is usually followed where high-level chunks at the feature or design level are estimated and
are decomposed progressively into smaller chunks or work-packets as information is
detailed.
➢ Bottom-Up Estimate: This technique is used when the requirements are known at a discrete
level where the smaller workpieces are then aggregated to estimate the entire project. This is
usually used when the information is only known in smaller pieces.
➢ Parametric Estimate: This technique uses independent measurable variables from the
project work. For example, the cost for construction of a building is calculated based on the
smallest variable as the cost to build a square feet area, the effort required to build a work
packet is calculated from the variable as lines of codes in a software development project.
This technique gives more accuracy in project estimation.
➢ Wideband Delphi Method: It is a structured communication technique, originally developed
as a systematic, interactive forecasting method which relies on a panel of experts. In this the
estimation team comprise the project manager, moderator, experts, and representatives
from the development team, constituting a 3-7 member team. There are two meetings −
➢ Kickoff Meeting
➢ Estimation Meeting

Process:

▪ Select a team of experts, and provide each with a description of the problem to be estimated.
▪ Ask each expert to provide an estimate (often anonymously) of the effort, including a
breakdown of the problem into a list of tasks, and an effort estimate for each task.
▪ The experts then collaborate, revising their estimates iteratively, until a consensus has been
reached.
If each estimate is different, how does a project
manager decide that one estimate is better than
another?
There are various elements that a project manager can utilize to identify the best estimating
technique for a project.

➢ Size of the project: It is an important element to consider while choosing the best estimating
method. The size of the project affects the amount of time given to a particular project.

A large project allows project managers to invest significant amount of time in unearthing historical
information to be used in analogous technique.

➢ The level of complexity: It is another element that projects managers can utilize to decide
the best method. Every project has it level of complexity as each project has various factors
influencing it. Very complex projects call for analogous estimating so that a comparison can
be made between previous projects and the current project.

➢ The level of expertise: Expertise level of a team can really help a project manager choose the
best estimating technique for his team.

➢ Nature of the project: It is equally important in helping project managers pick the estimation
technique. Understanding of the project specification regarding cost, assumption, constraints
and time are important factors for project managers to choose the best estimation technique.
The project managers also have to identify various aspects that stand out between the
current project and the previously done projects.

Choosing a method that an organization has experience with not only provide accurate estimates but
also gets management support which is crucial for a new project. If a project does not have any
connection with previous project, it calls for the project manager to ask his estimating team to pick
three-point estimation. Project managers who lack a complete understanding of project specification
have a high likelihood of selecting the wrong estimation technique for their teams.

The project manager must take into account all the specific characteristics of the project to be
assessed and if the project has greater or more complex risks, it may be logical to use historical data
for valuation purposes such as a parametric estimate, which uses historical data but as a quantitative
method still offers higher accuracy of than analogous appreciation.
If you were the project manager, which estimate
would you use?
If I was a project manager, I will use Wide band Delphi technology, because as described in the text,
the project is rather complicated, so the direct experience of the staff knowledgeable about the task
will be of great value, but also because it is wise to involve the team members who are supposed to
work on the project from the beginning. This helps to build commitment through participation and
ensures that estimates are accurate on the assumption that these stakeholders are aware of the tasks
required

Also I would take suggestions from the subject matter expert who understands the work package
very well and can suggest the time estimations for that project and they can suggest me in hiring what
grade employee can be suitable for this project.

The Proposal Department neglected to include an expert to assist with the estimate. Given that the
company had an expert for this type of work package (Peter), they failed to get his insight. The
Proposal Department also didn’t account for additional complexity.