Infosys-Oracle Blog

To analyze this let us start with understanding what are the possible factors affecting estimations of any project:

Lack of information necessary for estimation

Lack of knowledge on how to estimate and estimation techniques

Inexperience in doing estimation for similar kind of work

Inappropriate estimation methodologies

Historical information availability, Historic Conditions and their Understanding and comparison with current conditions.

Inadequate timeframe to perform estimates

How does one overcome the above shortcomings.

Have an in-depth knowledge on the estimation Tools and Techniques through proper Training Session.

Apply the Estimation Tools and Techniques on smaller projects and then over Bigger Sized projects.

Use different Techniques of estimation over the different phases of the project based on the phase type and the expectation from the phase.

Estimation is an ongoing process and not a onetime process throughout the project life cycle. So re-estimate in case of any change in the assumptions to estimations.

Baseline Estimations by following proper guidelines.

Document Change Request and re-estimate accordingly.

Provide for Known and unknown contingencies in the Estimation.

Document project inputs and Outputs clearly for  better estimation.  

Leverage historical information about project's effort, schedule, cost, risk, and resources which can be referred as lessons learned / best practices from engagements executed in the past. Statistical baselines should be created for each factor affecting project effort for e.g. user training effort baseline or project management effort baseline. These statistical baselines should be revised periodically.

Understand the Scope of the project very well.

Break down the entire work into work Packages and estimation should be at the lower level and then summed up to the higher level.

Every organization has influence on overall project effort which should be considered while estimating the project timelines as each organization has their own tried and tested way of executing project based on their available skill set and capability with the client.

Estimation should not only be based for Cost and Time but also for Size. Size estimation would help in calculating the Budgeted Organizational productivity.

Proper Risk Management will help in reducing the uncertainties and will help to provide better estimates.

Project Health and Decision making should be validated regularly through proper tools and techniques.

What does one Estimate?

Some of the parameters that one needs to estimate for a successful execution of a project are

Project Duration

Finish Time

Cost

Resource

Success rate

Quality

Why estimations deviate from the real.

At the Start of every project Objective or business requirement is just a thought and our understanding of the Business of the Customer. Once requirements are converted to core Designs things get clearer and development is nearing completion uncertainties start reducing. 

Does that mean that we cannot give estimates?

Estimates can always be provided as they represent costs and other values based on certain assumptions.  Distance between Pune and Mumbai approximately  94 Miles and the averge speed of a vechile @ 60KM’s Per hour reaches in 2.5 Hrs. Does that mean that we can commit to reach Mumbai from Pune in 2.5 Hrs. The answer is No. But surely one can commit that we can reach Mumbai to Pune in a minimum of 2.5 Hrs and maximum of 3.2 Hrs based on the speed of the Vehicle, Traffic on the Road, Stoppage time in between etc.

Conclusion

The above recommended solutions will help in improved estimation effectiveness will enhance business to:

Make better investment decisions

Generate more return on investment (ROI)

Gain advantage over competitors by taking appropriate and timely decisions

More control over project execution

Finally improve organizational productivity.

Essentially estimation effectiveness is nothing more than how close your estimates are to actual.