Rules of Estimating
The rules of estimating focus on honesty. If you want an honest estimate, each element of this list has to be honest.
The rules of estimating are:
- Use the most appropriate approach and the most accurate method. When building an estimate, even if it is high-level, you must follow the rules. Each rule is crucial to successful estimating.
- Communicate the level of accuracy. The level of precision is the level of accuracy and trust that a project manager puts in an estimate (for example, if it is a broad estimate, don't claim total accuracy).
- Involve the on-board project team members that are on board in the estimating process so that they can provide insight and can become vested in the process.
- Base estimates on history. Determine whether the team members have a history of developing poor estimates. If the software estimators are usually correct, then their estimates should have greater credence.
- Use standards, if available.
- When developing estimates, avoid starting with a presumed result and then working backward to justify this result. Making estimates fit the available dollars does not generate an honest estimate. If your estimates are not aligned with the targeted cost or schedule, address the problem and resolve it through trade-offs of scope, schedule, and cost.
- Do not undervalue estimates. Undervalued estimates that might win business usually result in cost overruns that might be invisible at the time of contracting. As the project manager, you will be held accountable for that overrun.
- Recognize that estimating takes time. On average, it can take up to 2% of the total technical time to determine an estimate.
- Document your assumptions. This is a mandatory step in the process. An estimate is not an estimate unless it is written down, including both assumptions and approach, in addition to numerical values.
Remember that these rules are fundamental to estimating. You must follow them if you want to develop a valid estimate.