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.
In the first three parts of this series, we’ve discussed the negative effects of project estimation challenges, a problem for just about every organization regardless of size or maturity level—effects like missed market windows, profit loss, and “invisible killers” like employee apathy and stress.
These issues are often not a matter of project managers being unable to estimate—it’s generally a problem of the underlying process. When your process is broken, it’s hard to move forward and make needed changes that cancel out the immediate impacts of poor estimation: scope creep, milestone slippage, resource under- and over-utilization, and the like.
In parts 1-3 of this series, we covered the topics of:
- Accuracy versus Timing
- Managing uncertainty – Traditional and Agile approaches
- Capital Planning considerations
- Different methodologies to employ in creating estimates
- Contributor Estimates, Earned Value, and Earned Schedule
Before we continue, catch up on any of the topics you may have missed by clicking through the links above. Now, let’s get started.
In the remaining parts of this series, we’ll focus on:
- Planning for resources
- Estimates that mitigate risk
- The mega-project
- Using multi-point estimates
- When bad things happen anyway (and they do)
With the tools, considerations, and process guidelines outlined in this series, your organization can begin to holistically address a perennial and high impact pain point and should notice a positive ripple effect as work becomes more focused and purposeful. Let’s start with tip number six: Planning for resources.
It’s the People, Stupid (Estimates and Resource Availability)
“Many organizations think they have a resource management problem when, in reality, they have a demand prioritization problem.”
No matter the rigor of your estimation method or approach, if resources get pulled off projects unexpectedly or aren’t available for any reason, your estimate will prove inaccurate. For this reason, it is vital to consider resource availability when estimating duration.
A project manager can certainly enter an initial “best guess” task duration, but upon assigning resources, the duration must be revisited based on the estimated effort and the availability of the resources. As mentioned earlier in the series, this requires collaboration between project and resourve managers. It might also mean that alternate resources will be required. These alternate resources may be more expensive, less competent, or both, so a negative schedule and/or budget impact is still quite possible in any case.
If the project does slip as a result of lack of resource availability, other budgetary impacts can occur as well, such as higher supplier prices or penalties.
There is also the can’t-miss project: that project whose drop date is, by virtue of market requirements, regulations, or other concerns, a fixed time that cannot be missed. In this instance, the resource issue often is one of shuffling people around from other projects to this one, and those projects then become the focus of this scrutiny.
It’s clear that resource availability and its impacts must be considered when providing duration estimates. Caveats and risks should be distinctly pointed out. The right resources should also be a consideration, as not all resources are created equal.
Lastly, if tasks slip and must be delayed because of resource availability issues, there will likely be downstream conflicts with other projects that will need those same resources during the time you’ll need them. Thus, the risk of being wrong because of invalid assumptions about resource availability is not only a delayed project, but potentially an entire portfolio thrown into chaos.
This is why demand prioritization is so important, to avoid resources getting constantly shifted in the first place. Demand prioritization has a profound impact on project estimates, and this connection often is given short shrift. Many organizations think they have a resource management problem when, in reality, they have a demand prioritization problem.
To be continued…
In the next part of this series, we will look at tips 7-9: estimates that mitigate risk, the mega-project, and using multi-point estimates. In the meantime, visit www.planview.com to learn more about how our solutions can help you improve your project estimates.