The Hazards ofEstimating

Consider the case of Karen. One day her boss stopped by her desk at about 1 o'clock. "Need for you to do an estimate for me," he told her. "Promised the Big Guy I'd have it for him by 4 o'clock. You with me?"

Karen nodded and gave him a thin smile. The boss described the job for her. "Just need a ballpark number," he assured her. Given so little time, Karen could only compare the project her boss described to one she had done about a year before. She added a little for this and took a little off for that, put in some contingency to cover her lack of information, and gave the estimate to the boss. After that, she forgot all about the job. Two months passed. Then the bomb was dropped. Her boss appeared, all smiles. "Remember that estimate you did for me on the xyz job?"

PMliMl

She had to think hard to remember, but as her boss droned on, it came back to her. He piled a big stack of specifications on her desk. "It's your job now," he told her and drifted off again into manager dreamland.

As she studied the pile of paper, Karen felt herself growing more concerned. There were significant differences between this set of specs and what her boss had told her when she did the estimate. "Oh well, I'm sure he knows that," she told herself. She managed to work up a new estimate for the job on the basis of the real specs. It was almost 50% higher than the ballpark. She checked her figures carefully, assured herself that they were correct, and went to see her boss.

He took one look at the numbers and went ballistic. "What are you trying to do to me?" he yelled. "I already told the old man we would do it for the original figure. I can't tell him it's this much more. He'll kill me."

One of the ten primary causes of project failures is that ballpark estimates become targets.

"But you told me it was just a ballpark number you needed," Karen argued. "That's what I gave you. But this is nothing like the job I quoted. It's a lot bigger."

"I can't help that," her boss argued. "I already gave him the figures. You'll have to find a way to do it for the original bid."

Naturally, you know the rest of the story. The job cost even more than Karen's new estimate. There was a lot of moaning and groaning, but in the end, Karen survived. Oh, they did send her off to a course on project management. Hoping, no doubt, that she would learn how to estimate better in the future.

Guidelines for documenting estimates:

• Show the percent tolerance that is likely to apply.

• Tell how the estimate was made and what assumptions were used.

• Specify any factors that might affect the validity of the estimate (e.g., will it still be valid after six months?).

Can you fault Karen for anything? Well, perhaps. If she failed to tell her boss that a ballpark estimate may have a tolerance of perhaps 25% to as much as 100%, then she allowed him to think the estimate was better than it was. Also, she should have documented all working assumptions, explaining how she did the estimate, to what project it was compared, and so on. Then, if management still pulled a whammy on her, at least she would have had some protection. In fact, it is impossible to make sense of any estimate unless these steps are taken, so this should be standard practice.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

Get My Free Ebook


Post a comment