Information Technology Reference
In-Depth Information
Chapter
4
Project Effort Estimation
Arguably in any project plan, effort estimation is the most difficult proposition.
It is even more difficult for service providers. For bidding purposes, they make an
initial project effort estimate based on initial customer requirements. At this stage,
not many aspects of the project are crystal clear. Understanding about the project is
also still not there. Most of the understanding about a project is gained only after a
project starts getting executed. So effort estimation done at this stage is very crude
and needs to be refined later.
Let us face it! Any service provider's life hinges on good effort estimation. If he
is not able to come up with a good estimate, then he is going to lose money on that
project. At the same time he must justify the efforts to the customer.
For making a quick effort estimate at the bidding stage, project managers use
some formulas to arrive at a reasonable estimate. That is why there are so many
formula-based effort estimation techniques available out there. They also use their
experience and estimates from previous similar projects.
Even at a later stage when there is good clarity about the project, effort estima-
tion can never be 100% accurate. Whereas the initial estimate at bidding level
should be in the range of
±
20% of the actual final effort, the estimate done at proj-
ect strategy level should be
±
10% of the actual final effort. If your estimate comes
in these ranges, then you are in the comfort zone.
Any project needs to have detailed and well-defined time, quality, and cost
estimates before the start of the project so that the project can be tracked any time
during the project execution. For time estimates, time duration for each task in the
project has to be defined and, through the use of PERT/CPM methods, total dura-
tion for the project can be estimated. Here it is assumed that many tasks are done
in parallel. Many tasks are interlinked with each other, and some tasks cannot start
before some other task is finished.
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