How To Do 3-Point Estimating – Video

It is worth learning how to do 3-point estimating because it is the best technique for developing estimates with your project team members. It is called 3-point estimating because the team member provides their pessimistic, optimistic and best guess estimates for their deliverable. It is also called PERT which stands for Program Evaluation and Review Technique. This estimating technique is a best practice because it gives project managers three benefits:

  1. Increased accuracy over one-point estimates

    Dick Billows, PMP

    Dick Billows, PMP
    Dick’s Books on Amazon

  2. Better commitment from the project team members because the estimate considers the risk in the assignment
  3. Useful information on the risks of each task. Project Estimating Main Page

3-Point Estimating is a 3-Step Process

1. First, you work with the team member assigned to each task and identify both the positive and negative risks involved in their task. Negative risks are the things that could make it take more time and positive risks are the things that could make it take less time.

2. Next you ask the team member to make three estimates. The first is a best guess (BG) which is the average amount of work the task might take if the team member performed it 100 times. The second estimate is the pessimistic (P) estimate which is the amount of work the task might take if the negative factors they identified do occur. The third estimate is the optimistic (O) estimate which is the amount of work the task might take if the positive risks they identified do occur.

3. Then you do some simple mathematics with the three estimates. You calculate the mean and standard deviation using the 3-point estimation formulas: (O + 4BG + P) ÷ 6= the weighted mean and P-O/6 = the standard deviation (used for calculating probabilities). The weighted mean estimate from the three estimates the team member gave you is the one you use for their task. It reflects the amount of risk in the task and the severity of the impact of the optimistic and pessimistic risks.

Teaching Your Team 3-Point and How They Will React

By having this discussion about the risks in the task, you give the team member an opportunity for input into the estimating process. You also go way beyond the game-playing that typically surrounds making an estimate using a single number. Typically, team members are thinking about that single number and padding it as much as they possibly can. They know from experience that the project manager will probably cut it arbitrarily. That’s clearly not the way to get good estimates.

When you use the 3-point estimating technique, you record all three estimates in the team member’s work3-point estimating package as well as the positive and negative risks that were identified. This clearly communicates to our team members and the project sponsor that the estimates are not 100% certain. There are risks you have considered that could affect the amount of time the task will take. This approach removes some of the team members’ uncertainty (and often fear) that is associated with the estimating process.

3-Point Estimating Accuracy

The 3-point estimating technique gives you better data because you’re explicitly considering risks. You learn about the risks of a task early in the process from the person who will be doing the work. That knowledge gives you the opportunity to take corrective actions before you start work on the project. That increases the likelihood of the good risks and decreases the likelihood of the bad risks.

As an example, if a team member says that on previous assignments involving a certain department in the company, the amount of work in the task increased substantially. That was because supervisors and managers from that department repeatedly failed to come to project planning meetings. Knowing that, you would take steps to encourage that department to attend the planning meetings. You might even involve the project sponsor to gain the department supervisors’ and managers’ commitment to attend the meetings. If you can reduce the likelihood of negative risks, you take a big step toward accurately estimating the work and improving our project’s duration.

To learn more estimating skills,  consider our online project management courses. You work privately with a expert project manager. You control the schedule and pace and have as many phone calls and live video conferences as you wish.  Take a look at the courses in your specialty.

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