Effective Project Management with MS Project – Estimation

In previous posts we have covered how to handle holidays, contingency and overallocations, in this post we will look at another common area where errors can creep in, estimation.

When developing a project schedule, it is essential that the amount of effort required to complete the project is estimated diligently. When scheduling the project, the estimates will be used as the basis for determining the resource levels so it’s important they are correct. If the estimates are too low, you may not have enough time to complete the project, or charge your client too little. If they are too high, your project might not get off the ground to start with.

The items below are a few basics of project estimation, especially in a professional services arena, but should be of use on other types of project:

Get the correct person to estimate

If you are trying to estimate a project consisting of a number of technologies or products, make sure you get the correct person to estimate the parts they are qualified to estimate. You wouldn’t get the Project Manager to estimate some incredibly complicated SQL query, just like you wouldn’t ask the database administrator to try and estimate the effort required for business analysis.

Document how you estimated

If you made an assumption or estimated a task a certain way, try to record how you arrived at that estimation. Recording the assumption makes it easier to understand how you arrived at an estimation if you need to review it at a later date. The ideal location for storing this information is within a note field against the task. The note fields can be accessed by right clicking on the task, and choosing Notes (P2010) or Task Notes (P2007), this will show the notes dialog for you to record the estimation note.

Try sizings instead of effort

During the estimation process, some people find it easier to use a relative sizing of the task as opposed to trying to assign a number of hours. Only once all parties agree on the sizings, is a metric application to the sizing to give an effort amount. The metric for each sizing will vary, so for instance a Small project sizing may equate to 1 days effort.

The development of these metrics is by no means an exact science, at first they will be pulled out of the air, but as your organisation completes projects successfully and gains useful actuals data, it will be possible to derive the metrics and maintain them.

To implement this estimation approach, perform the following:

1. Open the Custom fields dialog (P2007 : Tools > Customise > Fields , P2010 : Project tab > Custom Fields)

2. Create a new custom Task field called Sizing

3. Select the Lookup radio button and click on Lookup

4. Enter the sizing scale you want to use into the lookup dialog and click close

5. A new column will be added called sizing, containing a look up list consisting of the various sizings.

6. Finally we need to associate the metrics with the sizing to get a work value. This is done by creating a number column but this time using a formula:

Finally, we have a column that now automatically calculates the effort based on a sizing metric:

PERT estimation

The Program Evaluation and Review Technique (PERT) model uses a weighted average of three numbers to come up with a final estimate for a task. In many ways the PERT technique is similar to the metrics above, but just slightly more complex. PERT uses three values:

• The most pessimistic (P) case when everything goes wrong
• The most optimistic (O) case where everything goes right
• The most likely (M) case given normal problems and opportunities

The values for those numbers is then calculated using the formula (O + 4M + P)/6 to give an overall value.

PERT estimation tools exist in MS Project 2007 and can be invoked by right clicking on the toolbar and choosing PERT Analysis.

Once selected a toolbar will be displayed as seen in the top left hand corner of the screenshot above. In Project 2010 however, MS decided not to ship the PERT tools, but there is an external macro you can install that will provide the capability, more details are over at http://blogs.technet.com/projectified/archive/2009/11/24/3296207.aspx

Hopefully this has given you a couple of ideas on how Project can assist in the estimation process, as well as a few tips on what to do and not to do when estimating project work.