The following content is based on the whitepaper, “Bigger Than a Breadbox: 10 Tips for Better Project Estimates, Part 2,” written by Jerry Manas. For your reading convenience, we’ve decided to give it everlasting life here on the blog.
So far in this series, we’ve examined a number of ways to improve problems with project estimates. These problems, as mentioned, were cited by a large percentage of respondents in Planview’s resource management study as a primary cause of their resource management pains. But what’s really at the heart of the matter? Before we get into part six of this series, be sure to review any of the previous pieces you may have missed:
- Part 1: Improve Project Estimates and Escape Crisis Mode
- Part 2: Improving Project Estimates is all About Direction
- Part 3: Project Estimation Methods
- Part 4: It’s Time to Start Planning for Resources
- Part 5: How Risk Management is Crucial to Project Management
If we use the class Peter Senge “Five Whys” model (asking why until you get to the root of a problem) and ask why estimates are a resource management pain point, we’ll see that it’s because late projects cause havoc with resource plans. So, then we must ask: Why are projects late? Is it only because of poor estimates?
Why Bad Things Happen to Good Estimates (Other Reasons Projects are Late)
Indeed, poor estimates are a root cause of late projects (not to mention cost overruns), but there are other causes of late projects as well, and they should not be overlooked. Several years back, Jerry Manas conducted a study on the causes of late projects. More than 100 project managers were interviewed. The six most frequently cited reasons for late projects were as follows, in order:
- Unrealistic Deadlines (This could be based on poor visibility into capacity; an overzealous sponsor; the inability of the project manager to “manage up” and educate leadership on the risks; lack of demand prioritization; and/or an inadequate system for providing estimates.)
- Customer/Partner Availability (An organization is an ecosystem, which includes customers, suppliers, consulting partners, and others. This is why the Six Sigma SIPOC model for process improvement initiatives begins with Suppliers, and includes Inputs, Process, Outputs, and Customers. Project risk assessments and expectation agreements need to include outside partners.
- Resource Availability (It’s a vicious circle; Poor estimates lead to project delays, which cause havoc with resource availability, which leads to poor estimates. Project managers need to work closely with resource managers to ensure resource commitment. Demand prioritization is also a critical component. A process should be in place for mid-stream projects that usurp existing initiatives, and rescheduling should be done accordingly, and a new baseline set for the impacted project.)
- Uncertainty/Unpredictable Events (Some projects are late because of unpredictable events. This is why it is a best practice to employ Management Reserve for unknowable risks and Contingency Reserve for known ones. Likewise, estimates should be tied to risk assessments, as mentioned earlier.)
- Management Decision/Change in Priorities (Healthy organizations adapt to changing market environment and other situations, and sometimes this means shifting priorities. A project manager should not be penalized for a project that was intentionally delayed by management. If these changes happen too frequently, however, it speaks to a need for governance process maturity, demand prioritization, and particularly a process that supports evaluating tradeoffs.)
- Poor Estimates or Inadequate Planning (Without a doubt, effective estimation ability is an important success factor and a high “perceived” pain point for organizations. It joins the other reasons mentioned above as a leading cause of project delays, and in ways, impacts those other causes as well.)
One suggestion would be to make an Ishikawa, aka fishbone, diagram, showing the cause-and-effect relationships for the above items in your organization. See what applies, what doesn’t, and draft a plan to address the root causes of project delays. Certainly, the estimation techniques outlined in this series, as well as a solid demand prioritization and governance process would be a good place to start.
We’re just about at the end of this project management series. You’re probably wishing you had the main points from each part of the series in one place, easy to pull out for reference or to add your own notes to. Well, the final part to be published in the next couple weeks will be just that—a checklist of each of the 10 tips we’ve discussed with the main points to consider. While you wait, learn how Planview can be a partner with your organization by registering for a free demo of Planview PPM Pro.