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Dec 30, 2015
allaboutxpert.com.au
copyright © 2015: all content is the copyright of allaboutXpert Australia (pty) ltd
PMI Australia Conference
Estimation
copyright © 2015: all content is the copyright of allaboutXpert Australia (pty) ltd
introduction
• hi, I am Dennis Grant.
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• I am the CEO of South Africa’s largest independent Project Management Company.
• I am a 15 year old “accidental Project Manager”.
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accidental Project Managers – why?so I wonder just how many accidental Project Managers are
here today?
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• very few people leave school wanting to be a Project Manager.• in South Africa there are no under graduate courses in Project
Management, yet you can do your Masters and you can do your Doctorate.• people often start other careers in IT, Engineering, etc. and evolve into
Project Management. • often this is initiated in terms of moving into a management role and/or
moving into a management pay grade.
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so how did I approach my first estimate?
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all are mostly based on guesswork, personality and resource experience, can be time consuming and are often inconsistently applied.
“Accurate software estimating is too difficult for simple rules of thumb.”~ Capers Jones , 1991
Expert Judgement
BroadbandDelphi
Program Evaluation and
Review Technique
(PERT)
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I soon became a statistic……..the Standish Group “Chaos” report shows:
these findings have been
fairly consistent for
the last 25 years
31.1% ofprojects willbe cancelledbefore theyare evercompleted
52.7% ofprojects willcost 189% oftheir originalestimates
only 16.2%for softwareprojects thatarecompletedon-time andon-budget
projects completedby the largestAmericancompanies haveonly approximately
42% of theoriginally proposedfeatures andfunctions
• the cost of these failures and over runs are just the tip of the iceberg. the lost opportunity costs are not measurable, but could easily be in the trillions of dollars.
• even when these projects are completed, many are no more than a mere shadow of their original specification requirements.
Source: Standish Chaos Report
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and would likely remain a statistic ……..
PricewaterhouseCoopers
, which reviewed 10,640
projects from 200
companies in 30
countries and across
various industries, found
that only 2.5% of the
companies successfully
completed 100% of their
projects
http://teamgantt.com/blog/2014/07/21/seven-shocking-project-management-statistics-and-lessons-we-should-learn/#sthash.pDQqPcz2.dpuf
A study published in the
Harvard Business
Review, which analyzed
1,471 IT projects, found
that all but one in six
projects had a cost
overrun of 200% on
average and a schedule
overrun of almost 70%.
http://teamgantt.com/blog/2014/07/21/seven-shocking-project-management-statistics-and-lessons-we-should-learn/#sthash.pDQqPcz2.dpuf
The failure rate of
projects with budgets
over $1M is 50% higher
than the failure rate of
projects with budgets
below $350,000
http://teamgantt.com/blog/2014/07/21/seven-shocking-project-management-statistics-and-lessons-we-should-learn/#sthash.pDQqPcz2.dpuf
Sadly the trend is
towards more failure
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I figured out what was going on…..
concept evaluatio
n
detailed design
high level design
build, test and fix
implementation
non involvement of userinadequate communication
inadequate planning
inadequate definition
bad / poor estimating
incorrect scheduling
numerous changes
inadequate control
poorly planned teaming
inappropriate projectmanagement approach
unsupportivetop management
failure to usesystems approach
wrong project manager
misuse of management
techniques
and importantly where the really bad “stuff” happens
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some principles that drive success ….
planning is key
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time
reso
urc
es
+
-
t2
t1
additional work for planning and structuring the project
extra effort and rework prevented due detailed upfront planning
increasing the effort in planning and structuring projects leads to cycle time (t2 < t1) and total effort reductions
of 35% - 50%
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some principles that drive success ….
ability to influence is at the beginning of a project
and not when things go
wrong
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knowledgeacquisition
conceptinvestigation
basicdesign
prototypebuilding
pilotproduction
manufacturingramp-up
index
of at
tenti
on a
nd
influen
ceability toinfluenceoutcome
senior management involvement in projects must be focused on the initial stages where the strategic
direction and objectives are defined
actual management
activity profile
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some principles that drive success ….
perceived capacity is
always greater than real capacity
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maintenanceday-to-day
majorprojects
admin
perceived supply
real supply
majorprojects
minorprojects
admin
maintenanceday-to-day
perc
ent
of
tim
e s
pent
real innovation capacity
perceived innovation capacity full capacity (100%)
minorprojects
the real allocation of time to task categories must be assessed to bring resource demand created by projects
in line with real innovation capacity
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where do Project Managers come from?
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The Sydney
Opera House
strategist /
imagineer
organiser / stalwart
or preserver
socialiser /
empathiser
realist / analyst
not everyone is good at planning or estimation
those that can execute a plan
+- 70%
those that can come up with a
plan
+- 30%
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there is no standard estimation process.
project managers make use of their own tools, methods and processes to come up with estimates. these are therefore inconsistent and often dependent on the experience and knowledge of the project manager.
there is no central repository for recording estimates.
assumptions cannot be traced and this problem is compounded by turnover of project management staff.
initial estimates that drive the initial budgeting process tend to be significantly lower then final budget/actuals.
history shows the projects planned for the release miss their release dates. this will increase costs and project delivery timelines.
a large percentage of active projects have no baseline in place.
generic problem statement
estimation is inconsistent and ever changing
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generic problem statement - detail
the above issues result in variances in time, cost and effort when compared to actuals
• lack of clarity around who does the estimates and who is responsible for the estimates.
• skills not adequate to deliver accurate estimates.• limited understanding of the estimation process and terminology.
PEOPLE
• business do not understand the estimation process and their input into this process.
• lack of clearly defined scope management process and principles from an estimation perspective.
• estimation is dependent on the forecasting and budgeting process, which is financially driven rather than size driven.
PROCESS
• lack of historical information.• lack of industry benchmarks.• lack of a central repository for storing estimations and assumptions.
• estimation process is dependent on the requirements process, which is new and slowly maturing within the organisation.
• no standards exist in terms of sizing (function point count).
SYSTEMS
PRACTICE
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a science that drives effective estimation
• Parametric Estimation
– some great examples:
Seers
SPR
etc.
• sizing is the key input to any estimate.
• complexity affects productivity ratio’s.
• environments affects productivity
ratio’s.
• processes affects productivity ratio’s.
• bottom up is better then top down.
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positioning estimation
High Level Design Detailed Design Build, Test, Fix Implementation
E
Stage In Process:End of High Level Design
Stage In Process:Middle of Detailed Design / End of Detailed Design
Stage In Process:Release into Production
Technique – Proxy• Compile estimation
input from all areas and collate for overall time & effort.
• Inputs from other Group Technology areas: High Level Work Breakdown Structure with expert based estimation
Technique – Metric (FP count)• Detailed
documentation• Detailed Work
Breakdown Structure
Technique Actuals versus Estimated tracking and comparison based off Function Point Counting
• Looking at actual project schedule
• Capture Actual value
E E
Idea Cloud / Concept
Evaluation
Stage In Process:Beginning of the conceptphase
Technique - Analogy• Optionally–using to
size and estimate projects where very littlie information is available.
Inn
ovati
on
Pro
ject
Lif
ecycle
Estimation Confidence Factor50 – 60%
Estimation Confidence FactorMiddle of Detailed Design = 60%End of Detailed Design = 85%
Estimation Confidence FactorActual = 100%
Estimation Confidence Factor20-40 %
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most things can be sized
analogy sizing• estimates can be made against a
variety of software products in the table, further categorised by size (small/medium/large)
• the portions of enhancement projects that are new, enhancement, maintenance, and conversion effort are recorded here
proxy sizing• use a multi-tiered approach to
sizing• estimate built from known values• approximation accuracy
approaches that of FPA• combine with size by metric when
more is known
metric sizing• function points (recommended)
confiden
ce
documentation
facilitation
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Project Estimation Process
Schedule and Summary Estimation report sent to
Project Manager
PMT
Estimation Team finalise estimation output and
reporting
Estimation Team and PM + key project resources meet for
estimation workshop – facilitated for larger projects/programs
Environmental Assessment Questionnaire completed and submitted with required
project documentation
PM updates estimation output with current knowledge and compares to current project schedule, updating where he
deems necessary
Updated schedule ready to be baselined
Estimation request submitted to call centre
Support documentation and request for documentation
sent to PM
If iterative updating of estimation output are
required, PM to request from estimation team
If no updates planned or final output accepted and signed
off ->
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Project Management cost and effort benchmarks
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the common sins of Estimation
confusing estimates with targets: early estimates are often used as the “bogy” point but soon develop a life of their own. ROM vs. reality!
saying yes when really meaning no: vigorous, job-defending estimation with little data or quantities. young, junior, introvert software engineer vs. sales person who is more experienced, senior, and extrovert.
committing too early with lots of uncertainties: “cone of uncertainty” means that the uncertainties decrease as the project progresses. early in the software development lifecycle there is a tendency to underestimate. estimate early and estimate often!
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the common sins of Estimation
estimating in the “impossible zone“: schedule compression increases the total cost or effort for the project. “impossible zone” is a compressed schedule with a zero chance of success. “where no man has gone before.”
taking credit for increased productivity BEFORE you achieve it: assume the productivity loss from initial use of new tools or methods considering learning curve and error-proneness.
using only one estimation technique: estimate with different ways and looks. multiple approaches contribute to Brook’s “vigorous defense”. same picture different camera angle.
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the common sins of Estimation
not using estimation software: it can bring more credibility providing a sanity check against completed projects. science of estimation is supported in the tools.
not including risk impact: remember Murphy’s Law? “anything that can go wrong will go wrong.” risk exposure is where “risk buffer planning” starts.
providing off-the-cuff estimates:• treat estimation as an essential task. even simple arithmetic is better than
guessing or intuition.• document your assumptions and knowledge. • define a standardised estimation procedure (multiple approaches,
description of imprecision, re-estimate schedule, point of estimate becoming commitment).
• decompose big estimates into smaller ones (system-modules).
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a practical walkthrough of the estimation process