Your Guide to Accurately Estimating Projects

February 23, 2018 by Keiko BorkenhagenKeiko Borkenhagen

Estimation is an invaluable tool for anticipating and managing project uncertainties. Accurate project estimates help identify cost and schedule requirements with relative precision, and reduce the risk of running out of time, resources, and budget during a project. But even with years of experience, project managers struggle with accurate project estimates.

One of the key benefits of LiquidPlanner is the ability to estimate tasks in a best-case to worst-case range, as opposed to a single-point estimate. It’s easier to estimate in ranges because it alleviates the pressure of not meeting a single-point estimate. But most importantly, it captures the the inherent uncertainty in a given task.

And with LiquidPlanner, updating estimates provides dynamic, real-time visibility to your project schedule. In this post, we’ll cover estimating techniques and the tools in LiquidPlanner that can help you estimate your project work more accurately over time.

If you are building out a project for the first time or are new to LiquidPlanner, here are common estimation techniques to effectively manage projects:

The first step to estimating your project is to break down the actual work involved for your project. Although you may have a general idea of how much time the project overall will take, capturing scope based on estimating from the project level will likely result in wildly inaccurate estimates.

Starting with estimating the effort at the task level will result in greater accuracy of the total project effort. LiquidPlanner does the heavy lifting by totaling the project estimate for you.

When you’re breaking down your tasks, do you wonder, “How detailed should I get with my task breakdown?” Once your task breakdown structure is finished, ensure that you’ve created tasks that you can reasonably estimate using this criteria: is the task Comprehensible, Manageable, and Assignable?

The initial task breakdown you create may result in some tasks that seem rather large. But how big is too big?

If you end up with a really large task, the actual level of effort involved will be difficult to comprehend and pinpoint with accuracy. If you’re at this juncture, break the large task down further into smaller components that are comprehensible and easier to estimate.

Consider this example: you’ve asked a team member to estimate effort for “Develop the Beta Chat Room Feature.” This is a pretty broadly defined task and could have a very long timeline. You’re likely to get a very high-level guess of the estimated effort, with a high degree of uncertainty. Instead, you might want to break the task down further, such as a task to “Create Add Friend Dialog.” This will help your team members estimate that chunk of work with greater accuracy.

Before you start breaking down your tasks into the smallest increments possible, don’t get too carried away! Breaking down a task to very minute levels of detail means that your team members will have more items in LiquidPlanner to monitor, track time to, post updates to, and keep track of throughout the project duration. You want the task to be manageable, so that you don’t create too much administrative work to manage small minutiae.

So when should you stop breaking down your task structure? Again, no simple answer here. But here are some questions to ask yourself.

Is the task a key action item that helps to convey progress on the project? If the task seems really small, will the ability to track percentage complete of this task be useful for your project reporting needs? Tracking minor task items may serve as a handy checklist, but may not be necessary for reporting on progress of your project.

When thinking about the manageable size of a task, you also want to consider your team’s workflow/methodology. If you’re an Agile team, small 1 to 2 hour tasks may be easy to manage and slip into an upcoming sprint. On the other hand, a small task for a manufacturing team may be more like 6 to 9 days in effort.

Ultimately, you need to determine whether the size of the task is manageable for a team member to update, monitor and track time to.

The third criteria to determine whether a task is reasonable in size is whether the work can be assigned to an individual. Tasks should be broken down to a point where you can identify who would be accountable for executing the work. If the task is so large that a larger team or department is accountable, you may need to break the task down further.

In LiquidPlanner, estimates for remaining effort are given in ranges. Why a range?

Think about the last time you gave a single-point estimate for a task… “I’ll finish this task in six hours.” Did you actually track exactly six hours? Probably not. Single-point estimates rarely match the actual outcome.

It’s more realistic to capture a task in terms of a best-case to worst-case range, for example, “Run Tests on Sample A” w...

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