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Project Estimating Process

FEATURED PAPER

Dan Epstein

New York, USA

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Introduction

The described below methods of project estimating are based on PM Workflow® Framework, developed by me and described in details in the book: Project Workflow Management – The Business Process Approach, written in cooperation with Rich Maltzman. The book will be further referred to as “the book”. You may find more of the book on authors’ website www.pm-workflow.com.

The purpose of this article is to describe practical steps of the project estimating and its timing to develop size, effort, cost, schedule and critical resource estimates. Due to limitations of the article size, some process flow diagrams, their descriptions, tables and examples are not shown here. For more detailed guidance, please refer to the book.

In order to better understand the article’s terminology, it is necessary to highlight minor differences in terminology, such as using the word “frame” instead of “phase,” used in both ISO 21500 and the PMBOK® Guide and PM Workflow®. The difference between frames and phases is that phases imply a sequential execution. Execution of frames instead depends entirely on the workflow. The project management process flow starts with receiving request for project in the requirements management processes of the Requirements frame and ends with the project closeout set of processes in the Closing/Testing frame. Based on the control point test conditions and the project health evaluation results, the process flow may branch forth and back between specific processes in any frame.

The Project Estimating process is not a stand-alone process. It depends on results of execution of other processes and in many cases it runs simultaneously with them. The timing and type of estimates are determined by the project process flow, which leads the project manager through the flow of processes and indicates when and what type of estimate should be made. In order to better understand the estimating process, some familiarity is required with the following processes which may run concurrently with estimating:

  • Project Planning
  • Risk Management
  • Issue Management
  • Communication Management
  • Scope Change
  • Outsourcing
  • Resource Management
  • Quality Management
  • Construction
  • Tracking
  • Testing
  • Closing

Estimating accuracy

Today, the vast majority of projects are incorrectly estimated, which causes monetary losses and may threaten projects and even the entire business. The reason for poor estimates is non-compliance with requirements of estimating process, as described below.

The estimating process is executed many times throughout a project life cycle. Most estimates are done iteratively; first with low accuracy, increasing it as the project is being developed with the final best accuracy of –5% to +10%. The accuracy of each estimate depends on: 

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About the Author

pmwj24-jul2014-Epstein-AUTHOR IMAGEDan Epstein flag-usa

New York, USA

Dan Epstein combines over 25 years of experience in the project management field and the best practices area, working for several major Canadian and U.S. corporations, as well as 4 years teaching university students project management and several software engineering subjects. He received a master’s degree in electrical engineering from the LITMO University in Leningrad (today St. Petersburg, Russia) in 1970, was certified as a Professional Engineer in 1983 by the Canadian Association of Professional Engineers – Ontario and earned a master’s certificate in project management from George Washington University in 2000 and the Project Management Professional (PMP®) certification from the Project Management Institute (PMI®) in 2001.

Throughout his career, Dan managed multiple complex interdependent projects and programs, traveling extensively worldwide. He possesses multi-industry business analysis, process reengineering, best practices, professional training development and technical background in a wide array of technologies. In 2004 Dan was a keynote speaker and educator at the PMI-sponsored International Project Management Symposium in Central Asia. He published several articles and gave published interviews on several occasions. In the summer of 2008 he published “Methodology for Project Managers Education” in a university journal. His book, Project Workflow Management – The Business Process Approach, written in cooperation with Rich Maltzman, was published in 2014 by J. Ross Publishing.

Dan first started development of the Project Management Workflow in 2003, and it was used in a project management training course. Later this early version of the methodology was used for teaching project management classes at universities in the 2003–2005 school years. Later on, working in the best practices area, the author entertained the idea of presenting project management as a single multi-threaded business workflow. In 2007–2008 the idea was further refined when teaching the project management class at a university. In 2009–2011 Dan continued working full time on development of the Project Workflow Management, completing it in 2012.  Dan can be contacted at [email protected].