Any project cannot do without estimation. Whether you deal with IT, Engineering or Accounting, you always need to keep some crucial methods in mind. Overall, project management is generous for various estimation techniques, but which of them are the most effective? In this article, you will find the answer.
Every project must be taken through its paces. Finding out if your work is viable is one of the primary purposes of project management. As a result, several estimation methodologies have emerged from areas such as IT, accounting, engineering, and so on. Cost management is only one aspect of project estimation. First and foremost, it seeks to determine how much effort is required and what resources are necessary to finish your work. There are numerous questions to consider when estimating your project. The most important of them are derived from the six dimensions that every project manager must deal with: time, quality, risk, scope, cost, and resources. Here are a few examples of these questions:
- How long will the project take?
- What drawbacks does it have and how to eliminate them?
- How exactly will you test your project for strength?
- How much will the project cost?
- What professionals do you need to get the work done?
Project estimation is no rocket science but it can lead you down a blind alley unless you know the most effective estimation techniques. So, that is what we will be talking about in this article.
How to Estimate Your Project?
Many people question the value of project estimation because it is merely a forecast, and you may later require additional time and resources to complete your work. The skeleton does not dictate the exact shape, weight, and geometry of your body, but it is necessary for your survival. This is a poor illustration, but it clearly explains how project estimation works. If you skip this stage, you risk exceeding your budget, becoming stuck in the middle of a project, or not having enough skilled people to finish it. Yes, there is always the possibility of overlooking something, but with an accurate project estimate at your disposal, you will know what to expect and how to cope with setbacks. So, let’s get down to the most popular estimation methods.
This technique intersects with the analogous method. It also relies on the data received from the previous projects. Most projects, in particular, have comparable stages and duties to complete. They might be blended together or in a different order. However, this is still the same set of responsibilities that you have previously dealt with. And if you managed to collect some information about these repeatable components, you can employ this data to evaluate the scope of your current work.
If you have worked on smaller projects, you will frequently need to multiply the prices or the amount of time and effort to arrive at the accurate estimate. However, this strategy works well with low-risk initiatives. In contrast, if you are dealing with one that is difficult to forecast, you will most likely need to take a more creative approach.
This method is largely concerned with the cost-based evaluation. As previously stated, the project is evaluated based on six dimensions. As a result, each of them should be considered when estimating the cost of each stage. The process entails identifying the three probable situations to get the average cost of your project. The first is the most desirable outcome. It happens infrequently, yet it is still conceivable. The second is the worst-case scenario. And the third scenario is the most likely. As soon as you’ve identified them, add the three sums and divide the total by three. The result is the most probable outcome.
In practice, the ultimate cost of your project may vary somewhat, but you will know what to expect. Thus, it is more of an interval than a precise estimate.
If your team has experience with similar tasks, you can use previous project data to make some insights and accurately estimate the current one. The analogous method is frequently seen as the simplest and most convenient because you have statistics, the requisite skill set, an estimated time to finish the job, and, most likely, a budget. The latter, on the other hand, is the most difficult to quantify, especially when developing software. The idea is that the knowledge may be out of date, and the cost of performing the same operation will be greatly raised by inflation over time.
In any case, an identical set of tasks substantially simplifies the project estimation process because you can utilize the schemes and models used in similar projects, providing they were accurate. You need now make some changes, taking into consideration certain more parameters such as price fluctuation, time, project specificity, and so on. However, in general, the analogous strategy works well where it is required.
This methodology, on the other hand, is not completely accurate. Because the world is continually changing, stable variables do not exist. There are dozens of variables that could influence the outcome. As a result, when using this approach, you should constantly keep the context in mind.
This concept entails breaking down the work process into small, basic chunks. The simpler these components are, the easier it is to calculate and estimate them individually. This strategy is quite similar to the Waterfall methodology, which is well-known to anyone who has worked with software development. After you’ve determined what it will take to accomplish each component of your project, you simply need to sum it all up and reach a decision. That’s all there is to it. This method is praised for its accuracy, resulting from the proper particularization.
This technique can be combined with the analogous method to increase the degree of accuracy. Besides, it is essential to take into account all vital components and correct expenditures to avoid unexpected outcomes.
As you can guess, this technique is opposite to the Bottom-Up method. How does it work? The first step is to allocate the available budget you plan to spend on the whole project. The second step is to separate the process of the project’s creation into several parts. It is up to you to determine the scale of each stage. Then, you should calculate the sums necessary for the implementation of each part and check whether your budget can satisfy the needs of your project.
In Wrapping Up
Project estimation is an integral part of successful project management. Thus, you can opt for one specific methodology as well as combine particular techniques to elaborate on your own approach. Estimation techniques in software development help to understand what to expect from the project and how to organize the work. Identifying the accurate budget is just part of the story. But at the same time, this is typically the primary concern among project managers and developers. In the context of software development, they can provide additional assets to finance your work if you accidentally overshoot your budget.
On the final note, there are always a great many free tools and guidelines to help you cope with project management issues. But there’s an art to using them in order to estimate your project accurately. Thus, try as many techniques as you can and choose wisely. In the end, the viability of your entire work depends on it.