Best Practices for Improving Project Estimation

We can intuitively say it’s a good idea to do our best when estimating project budgets, timelines, and resource requirements. And yet, how do we approach that when estimation is all about making guesses without knowing exactly how the future will play out?

That’s when we turn to best practices: the cumulative wisdom of those who have come before us to tackle similar tasks.

Adopting best practices for estimation techniques is crucial for several reasons:

  • Accuracy: The goal of any estimation is to be as accurate as possible. Best practices come from experience and research and provide a closer approximation to the actuals than other methods.
  • Consistency: Using standardized techniques allows for consistency across estimates, making comparing and contrasting estimates on different projects or tasks easier.
  • Efficiency: Best practices generally include methods that are the most efficient. Following these can save time and resources in the estimation process.
  • Risk Management: Better and more accurate estimates lead to better risk management. We can anticipate possible risks by accurately estimating time, resources, and cost and preparing contingency plans accordingly.
  • Improved Decision-Making: Accurate estimates help everyone make more informed decisions regarding resource allocation, budgeting, and scheduling.
  • Credibility: Using proven estimation techniques can enhance the credibility of the estimates in the eyes of stakeholders.
  • Learning and Improvement: By consistently using best practices, teams can reflect on their performance with their estimates and seek to improve their estimation techniques over time.
  • Transparency: Transparency about the estimation process can foster trust among team members and stakeholders.

Even so, we realize that “best practices” can never provide a one-size-fits-all solution. They provide the most effective results only when we can tailor them to the specifics of our project, team, and organization.

Let’s consider how these best practices can positively influence our estimation capabilities

Break down the project into smaller, more manageable tasks or phases to get a better handle on the small pieces and make our estimates more accurate overall. 

Use a Work Breakdown Structure (WBS) to deconstruct a project into individual components, making it easier to understand and estimate.

Consider historical data from similar projects. Even when you need to adjust for changes in scope, resources, or conditions, you can take advantage of valuable lessons learned on previous projects.

Solicit expert input from team members and stakeholders with valuable insight based on their experience with similar projects.

Use estimation tools and software to help with analysis, such as Gantt charts, PERT charts, or Function Point Analysis.

Incorporate continuous refinement as the project progresses because the more information and feedback you gather, the more accurate your estimates can become. 

Incorporate buffer time in your estimates to account for unexpected delays or issues. The higher the level of complexity or risk involved, the more critical it is to build in buffer time.

Encourage transparency about the level of uncertainty involved in your projects, and explain how estimates were calculated. Transparency helps manage stakeholder expectations and builds trust.

Provide training to project managers and team members on effective estimation techniques. This can improve their skills and confidence in making accurate estimates.

Conclusion

Leveraging best practices in estimation is not just a recommendation—it’s essential for successful project management. Beyond providing more accurate estimates, these best practices can also facilitate better decision-making, foster consistency, promote transparency among stakeholders, and boost the credibility of your work.

At Thurman Co., we embrace best practices and proven methodologies as part of the foundational framework driving how we operate and interact with clients, suppliers, and partners.

We help businesses manage projects to significantly impact their success and growth. When you’re ready to put your project in the hands of a trusted professional organization, contact us to learn more about working together.

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