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Project Duration

Dick Billows, PMP
Dick Billows, PMP
CEO 4pm.com
Dick’s Books on Amazon

Managing project duration to make sure the sponsor and stakeholders are happy is the number one challenge for most project managers. Many executives think the most important metrics are the project duration and the finish date. Sometimes they are the only measures the sponsor and stakeholders ask about.

Project Duration: Why Do Stakeholders Manage Only Dates?

In a date-driven project world, the project managers have usually given the stakeholders nothing else that is measurable. Here’s why:

  • The scope statement is three pages of mush with no metrics
  • No one cares about cost because the project managers don’t measure it
  • There’s no data on hours because the project managers don’t gather it
  • Risk is not managed and most projects don’t bother to identify even the major risks
  • No one tracks the hours of work used by the project because everyone figures the people would be paid anyway.

It’s no wonder the stakeholders only pay attention to dates.

Project Duration: What Tools Do You Need?

Project managers must have tools to handle requests to finish earlier, increase the deliverables or that cut the costs. Tools like critical path analysis are an essential weapon in your tool kit when dealing with these requests.  The tasks on the critical path control the project’s duration.  Stakeholders need to learn they can’t arbitrarily make changes to critical path tasks, their resources, or deliverables and keep the same finish date.  The best way to illustrate that fact is to model the change and show them the impact on the finish date. See Project Schedule & Software Main Page

A skillful project manager doesn’t try to prevent all the changes requests that come up during the initiation and planning phases. They will also arise once you begin to execute the project plan. Those requests usually result in increases to cost or changes to scope so they are difficult to manage. There is a right way and a wrong way to manage these requests. Unfortunately, project managers often handle requests to finish earlier the wrong way. They try to prevent any change to the project plan. Simply denying requests triggers a great deal of conflict. That results in unhappy users or customers who simply go over the project manager’s head.

Project Duration: Model the Impact of Changes

The better way to handle these requests is to welcome change requests. Then you model the changes in the project software and show the stakeholders the impact on the finish date. Next you lead a discussion about the impact of implementing the duration or scope changes. These changes usually include increasing the resources on the project team which often increases the cost of those resources. Models showing the impact of the changes give the stakeholders information they need to make informed decisions. The project sponsor also has this information to use when the change requests come to them for approval or denial.

You can learn all the skills for managing project duration and change requests in our project management courses. Take a look at the courses in your specialty.

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Lessons Learned Project Management

Dick Billows, PMP
Dick Billows, PMP
CEO 4pm.com
Dick’s Books on Amazon

Lessons Learned Project Management is a process that is often bypassed. That’s because project managers and team members are sick of talking about the project they have worked on for months. Skipping the lessons learned process says to your team, “This project is too small to do any of that fancy lessons learned stuff. Let’s save some time and just start the next project.”  What you are “saving” is possibly 60 minutes of time. What you are losing is valuable information about what went well and what did not during every phase of the project you just completed.  The lessons learned information includes your project’s plans, schedules and templates. It also includes estimates of time and duration that are realistic, not “plucked from the sky.” All this lessons learned data from past projects is used to avoid “reinventing the wheel” on future projects.

An organization that doesn’t require a lessons learned process is denying itself the opportunity to improve overall project performance by learning from earlier mistakes. If project managers don’t conduct lessons learned meetings and archive their plans, schedules, templates and forms, the next project managers will waste many hours.  Even worse, they and the team will make the same mistakes on future projects because they didn’t learn from past projects. Lessons Learned Main Page

Lessons Learned Project Management Process: Step One

Here’s how the Lessons Learned Project Management process should work. First, you need to assemble your project team, the sponsor and maybe a stakeholder or two. In that meeting, you identify any mistakes made on the just-completed project and things you could do better next time. It’s always good to start by getting the team’s feedback on how you did as the project manager. Ask for their opinions about your performance in initiating the project, developing the plan, creating the schedule, estimating costs and duration and solving problems. Then ask about how useful your status reporting was. In all those areas, ask how you could do better next time. Some project managers get defensive about the criticism and they don’t welcome the team’s suggestions. But your willingness to accept constructive criticism makes the others accept it when it’s their turn to get feedback on their performance.

 

Lessons Learned Project Management Process: Step Two

Lessons learned project managementThe Lessons Learned Project Management session is a project manager’s best opportunity to train a project sponsor. After taking your criticisms from the group, you might step through the stages of the project and ask everyone what they might have done better on planning, estimating and solving problems. Minor suggestions about how a sponsor’s time investment would have avoided a problem can have a big impact next time. You write down all the ideas for doing things better and send everyone a copy. The hope is that it will positively affect future behavior. Lessons Learned Questions

Lessons Learned Project Management Process: Step Three

Before you file away the lessons learned ideas and send everyone a copy, you have one more task.  Gather up the estimates of the work duration and cost you made during planning.  Then compile the data you have on how long each task actually took and how much it actually cost. That will help improve the estimates on similar projects in the future.  The easy way to archive it is to save your Microsoft Project® file. It is easy to store and access next time.  The last elements to save are the project plans you produced for the just-completed project. Having those available to use on the next project can save a lot of time.

Spending an hour of your time on the Lessons Learned Project Management process is  a wise investment that pays big returns on future projects.

You can enhance your project management skills and master the lessons learned project management process in our online project management courses. You begin whenever you wish and control the schedule and pace. You work privately with an expert project manager 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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Project Management Plans: Three Sizes

Dick Billows, PMP
Dick Billows, PMP
CEO 4pm.com
Dick’s Books on Amazon

There is a great deal of science in Project Management Plans but there’s also a lot of art. The art comes in deciding which processes, tools and techniques are best for each new project. The easy answer is to use the same Project Management Plan steps on every project. That approach buries small projects with paperwork, meetings and processes that don’t contribute to the odds of its success. On the other hand, it often leaves large strategic initiatives with insufficient project management and overly simplified techniques. You must use the right techniques and processes for your Project Management Plans to improve the project’s end results. In this article, I suggest the “right” steps for Project Management Plans on projects of various sizes. Project Plan Template Main Page

Your first step in Project Management Plans is always to define the project scope. That is the basis for the scope statement, the work breakdown structure (WBS) and the estimates of cost and duration. The amount of project planning you do relates to the size, risk and complexity of the project.  But all project management plans should include a scope statement and a work breakdown structure (WBS). On smaller projects, your project management plan can skip the risk and quality management pieces.

Let’s look at specific Project Management Plans recommendations for projects of different sizes.

Project Management Plans for Different Sized Projects

  • Tier #1 Small Projects: Done within one department for the manager who is your boss. The team members also report to that boss.
  • Tier #2 Medium Projects: Affect multiple departments and each department contributes deliverables. The final product benefits customers/clients or an internal user.
  • Tier #3 Strategic Projects: Organization-wide projects or initiatives. They affect a larger number of stakeholders and have long-term effects.

Project Plan Step #1: Identify Stakeholders

Tier #1 Small Projects: This step is not necessary on an in-department project where the manager is the primary stakeholder.
Tier #2 Medium Projects: Process to identify stakeholders across the organization. Prevents surprises when you must add late arriving requirements. These cost more at that point than if they were identified during initial planning.
Tier #3 Strategic Projects: Process of surveys and interviews to identify internal and external stakeholders affected by the project. You must consider their requirements. Project Management Plan

Project Plan Step #2: Project Business Case

Tier #1 Small Projects: This step is not necessary because you don’t need formal project approval.
Tier #2 Medium Projects: Organizations with sound project management processes require a business case. This justifies a project’s priority versus other projects in the portfolio.
Tier #3 Strategic Projects: The amount of financial and human resources requires detailed justification. That is based on the strategic impact and benefit of the project. Project Planning Turf Wars Video

Project Plan Step # 3: Project Charter

Tier #1 Small Projects: A 1-page broad brush plan is enough. Small Project Planning Techniques
Tier #2 Medium Projects: The project charter addresses the project business justification,  acceptance criteria, and rough estimates of the human and financial resource requirements.
Tier #3 Strategic Projects: The size of the investment in these projects usually requires extensive documentation. It includes the risks, benefits and impacts on other strategic initiatives and the entire organization.

Project Plan Step #4: Gather Project RequirementsProject Management Plans

Tier #1 Small Projects: Usually limited to a meeting with the boss where you define the project’s Measure of Success (MOS).
Tier #2 Medium Projects: You survey stakeholders for their requirements. After considering each requirement, it is either included or explicitly excluded from the project.
Tier #3 Strategic Projects: An extensive process of identifying and analyzing requirements gathered from the stakeholders. You also assess stakeholders in terms of their interests in the project and their ability to influence the project’s success (positively or negatively).

Project Plan Step #5: Project Scope Statement

Tier #1 Small Projects: A short statement of the project’s result and acceptance criteria.
Tier #2 Medium Projects: A more detailed scope statement that covers the major deliverables, assumptions and limits.
Tier #3 Strategic Projects: A full scope baseline developed. It includes explorations of different ways of delivering the project scope. Project Plan Approval

Project Plan Step #6: Stakeholder Management & Communications Plan

Tier #1 Small Projects: Not necessary with the limited stakeholder group.
Tier #2 Medium Projects: Communications plan developed. It takes includes the information requirements of the stakeholders.
Tier #3 Strategic Projects: Plan developed for meeting stakeholders’ communication needs. It requires actively managing and resolving all the stakeholders’ issues. Fast Track Project Planning

Project Plan Step #7: Project Change Control

Tier #1 Small Projects: Project sponsor approval is the only requirement.
Tier #2 Medium Projects: Use existing organizational process for change control (if it exists). Alternatively, develop a project-specific change control  procedure. It must include analysis and documentation standards and identification of specific individuals authorized to approve changes of a specific size.
Tier #3 Strategic Projects: Change control and configuration management are often combined for handling changes to project baselines as well as changes to the specifications of the deliverables.

Project Plan Step #8: Project Schedule

Tier #1 Small Projects: Schedule based on work estimates made by the team members.
Tier #2 Medium Projects: Schedule based on work estimates plus work packages for each assignment.
Tier #3 Strategic Projects: Work-based schedules, work packages with estimates and a work breakdown structure (WBS) dictionary.

Project Plan Step #9: Project Procurement

Tier #1 Small Projects: Usually handled by the purchasing department.
Tier #2 Medium Projects: Request for Quotations (RFQs) on smaller purchases. Competitive bids on larger purchases.
Tier #3 Strategic Projects: Full competitive bid process. Large Project Planning Techniques

Project Plan Step #10: Project Quality Management

Tier #1 Small Projects: Not necessary.
Tier #2 Medium Projects: Quality control effort to measure deliverables against their quality metrics and specifications.
Tier #3 Strategic Projects: Quality control plus active quality assurance. The latter is a continuous improvement effort for the processes that produce deliverables.

Project Plan Step #11: Human Resource Management

Tier #1 Small Projects: Not necessary.
Tier #2 Medium Projects: Simple resource acquisition plan with limited training provided to team members.
Tier #3 Strategic Projects: Human resource staffing, acquisition and team development plans are fully detailed. They are tied to gaps in a “requirements versus capabilities” analysis.

Project Plan Step #12: Risk Analysis

Tier #1 Small Projects: 1-2 hours total.
Tier #2 Medium Projects: Qualitative risk analysis with a risk response plan for 5 – 10 key risks.
Tier #3 Strategic Projects: Qualitative and quantitative risk analysis with a risk response plan for several dozen risks.

Consider our online project management courses to learn how to use all the tools and techniques for project management plans. You’ll work privately with an expert project manager as your instructor and coach. You begin when you wish and control the pace and schedule. You can have as many phone calls and live video conferences with your instructor as you wish. Take a look at the courses in your specialty.

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Cost-Benefit Analysis in Project Initiation

Dick Billows, PMP
Dick Billows, PMP
CEO 4pm.com
Dick’s Books on Amazon

Cost-benefit analysis is a simple technique for comparing the business value a project will produce with the cost of producing it. Project managers use cost-benefit analysis in the project initiation phase to show the value of doing a project. During project initiation, the sponsor and project manager must justify the project to get the organization’s approval to spend the money. The cost-benefit analysis compares the project’s costs to the business value it will deliver. Few organizations want to go ahead with projects that will cost more than the value they will produce. So project managers conduct the cost-benefit analysis by gathering data on the value of the benefits and the cost of the project.

Cost-benefit Analysis: Examples

Let’s say you determined that the benefits produced by the project would be worth $15,000. And you calculated the cost of producing those benefits at $10,000. Then you would divide the benefits (15,000) by the costs (10,000) and  calculate the cost-benefit ratio of 1.5.

Many organizations have rules about what cost-benefit relationship the project must produce for gain approval. In some organizations, new projects must have a cost-benefit ratio of 1.2 to be approved. That means the benefits of the project exceed the costs by 20%. From an external point of view, a project that pays back its costs plus 20% of its costs sounds like a pretty good investment. Other organizations use higher or lower cost benefit ratios.

In a cost-benefit analysis, you compare the dollar value of the cost of a project, a deliverable or a change request to the dollar value of the benefits you expect it to produce. Here is another example. You may calculate a project will produce benefits worth $290,000 and will cost $272,500. So it’s benefits exceed its costs by $17,500 or 6%. Cost-benefit analysis on a small project is as simple as dividing the benefits by the costs to calculate the benefit-to-cost ratio: 290,000/272,500 = 1.06.Cost Benefit analysis

You can use cost-benefit analysis to test a particular alternative or compare several alternatives. It is usually a very simple process to come up with the cost of an alternative. You have access to list prices for equipment, materials and labor rates for people’s time. This is not to say there are never disputes about the costs. But the data is usually readily available.

You can also make the cost-benefit analysis more advanced by making comparisons over time and by adding elements such as the net present value of the benefits or the cost of cash flow.

Cost-benefit Analysis: Foundation for Calculations

The cost-benefit analysis is also the foundation for these calculations:

The details of these calculations will be subjects for later discussions.

Cost-benefit Analysis: The Tricky Part

Whatever level of sophistication the organization prefers, the difficult part of a cost-benefit analysis is coming up with quantified measures of the benefit of a project or an alternative.  The computation is simpler when the benefits come from cost savings. But it is much more difficult to put a dollar figure on the benefits when they are in the form of increased customer satisfaction or improved employee satisfaction. In fact, it is usually the benefit part of a cost-benefit analysis that is the source of conflict and disagreement.

 

Consider our online project management courses to learn how to use all the tools and techniques of project management. You’ll work privately with an expert project manager as your instructor and coach. You begin when you wish and control the pace and schedule. You can have as many phone calls and live video conferences with your instructor as you wish. Take a look at the courses in your specialty.

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Statement of Work – SOW

Dick Billows, PMP
Dick Billows, PMP
CEO 4pm.com
Dick’s Books on Amazon

In many organizations, 60% to 70% of the projects finish late, over budget and/or fail to deliver much value. Not using a Statement of Work – SOW during the project initiation is a major cause of project failure.  Project Phases Main Page

The project sponsor or customer issues the Statement of Work. It is their first communication to the project manager about what the project should deliver. It also describes what resources the project can consume to deliver it. The Statement of Work – SOW defines the deliverables. The sponsor should define the scope with the acceptance criteria that measures the project’s success. A Statement of Work can include the following (as well as other items):

  • Business Purpose: This includes a link to the company strategy
  • Scope of work: A short narrative definition and the quantified acceptance criteria
  • Location of Work: Describes where the project manager and team will do the work
  • Period of Performance: Specifies the start and finish time frame
  • Deliverables Schedule: Lists and describes what is due and when
  • Budget – The largest amount the project manager can spend to produce the required deliverables
  • Type of Contract/Payment Schedule: The project acceptance will depend on whether the budget available will be enough to cover the work required.

A New Project Without a Statement of Work – SOW

People get excited about implementing a new idea or about solving a new problem. All of the discussion is about the project finish date and all the things they must do. Particular attention is paid to the tasks they must do first. Everyone wants to talk about what to do first because they can immediately start work on them. They don’t take the time to decide what business outcome the project must deliver. They also don’t define the specific acceptance criteria they’ll use for the project’s deliverables. In other words, they don’t prepare a Statement of Work – SOW.

In many organizations, there is no thorough decision-making process. No one makes any decisions or commitments before people start work on the first few tasks. The project has little chance for success if the project starts without the sponsor specifying exactly what he/she wants. They must also specify what is “good enough.” “Good enough” defines how the sponsor will measure the project’s success. Here is an example. A goal of 100% accuracy on billing statements is a difficult and expensive achievement. But the goal of 90% accuracy is “good enough” because it is a 15% improvement over the current accuracy rate. Without the specifics of what the sponsor wants and how he/she will measure success, senior management can’t decide if they should approve the project’s initiation.  Additionally, no one is committed to the project’s success. That’s because they don’t know exactly what the project must deliver to be considered a success.

Statement of Work – SOW Solution

The organization can fix this problem by requiring that the project sponsor complete a Statement of Statement of Work SOWWork – SOW for every project before work can begin. The Statement of Work is the sponsor’s (not the project manager’s) commitment to the organization about what he/she will deliver for the resources they will spend. The Statement of Work supports senior management’s control over the initiation of projects. It ensures there are resources available to work on the organization’s major strategic initiatives. When project sponsors use the Statement of Work – SOW properly, they set measurable goals and decide what to include and, as importantly, what to exclude from the project.

To learn more about how to work with the project sponsor or customer to create the Statement of Work – SOW, consider our online project management courses. You work privately with an expert project manager who is your coach and instructor. You may begin a course when you wish and work on it at your pace and as your schedule allows. You and your instructor 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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Improve Team Performance – Video

Dick Billows, PMP
Dick Billows, PMP
CEO 4pm.com
Dick’s Books on Amazon

The need to Improve Team Performance is always a challenge for project managers. This  often includes dealing with an individual team member’s poor performance. Sometimes bringing about performance improvement is straightforward. First, the project manager identifies the behavior that is causing the performance problem. Next, the project manager communicates what he/she thinks is causing the problem. Then they suggest a solution. Finally, the employee changes their behavior and the project manager monitors the change. Oh, if only it was always that easy!

In this video, watch how a project manager deals with a team member whose behavior is causing a problem for the project.

Improve Team Performance: Video Synopsis

We see a project manager trying to cope with a very talented but difficult team member. First, the project manager does a correct assessment of the team member’s performance. Then she evaluates alternative ways of changing the team member’s behavior. She comes up with a clever solution that will let the project go ahead.

Here is the problem. The team member was redefining his project task based on his political preferences. He was not concerned about the project’s requirements and he disagreed with the project’s goal. He was giving speeches to company employees which actually undermined the project.

Here is the approach and solution. First, the project manager correctly assessed the team member’s performance. Then she evaluated alternative ways of changing his behavior. The project manager could not terminate the team member because the grounds for termination were not clear enough. The team member was popular with employees throughout the organization, so the project manager didn’t want to make a martyr of him. She had to change his behavior and get him to properly complete his task on the project. She faced a difficult challenge. She had to address the team member’s insubordination and come up with a good solution that would let the project move forward

The project manager cleverly redirected the team member’s efforts and got him to support the overall project goals. She made an insightful assessment of his personality type and traits. Then she focused on the correct way to communicate with him. Her communication technique let her persuade him to honor his original project commitment. The approach wasn’t an instant success and the two of them went back and forth in the discussion.  In the end, however, she succeeded by giving him different assignments and the project was successfully completed.

 

 

 

 

 

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3-Point Estimating

Dick Billows, PMP
Dick Billows, PMP
CEO 4pm.com
Dick’s Books on Amazon

Estimating is tricky for project managers because the customer wants the project to be done quickly and cheaply. You want your team to be committed to the numbers because they are realistic and fair. On top of that, everyone is concerned with the risk that exists on any project. So the best estimating technique should give you accurate numbers and some assessment of the risk in the tasks and the project as a whole. The best approach is to quantify the estimate and the risk of not hitting it. We use the 3-point estimating technique, which comes from the NASA space program, to do this.

This process lets you estimate work and duration with the team and listen to the risks they see on their assignments. It also lets you give project sponsors the opportunity to decide what level of risk they want to accept on the project. Then you can quantify the additional costs that would be incurred to reduce the risks to a lower level.

The 3-point estimating process, which is also known as PERT (Project Evaluation and Review Technique), is a three-step process where you work closely with the team members. First, you discuss the team member’s task and the risks. This includes the good risks that could cause this task to take less work and the bad risks that could cause it to take more work. Second, you note these risks in a work package and discuss the approach to the task with the team member. Third, the team member makes three estimates: an optimistic estimate, a pessimistic estimate and a best guess estimate. You apply the formulas* (at the end of this article) to those three estimates to come up with the actual data that you will use in the project schedule.

Common Estimating & Risk Issues

There are two mindsets that often plague the estimating process:

  • Executives believe that projects have no risk
  • Team members think that padding their estimates will protect them from blame.

Both of these mindsets are false and they  get in the way of accurate estimatingThe 3-point estimating technique deals with both these mindsets. Three-point estimating is a straightforward process for developing estimates using a little bit of statistics.  Three-point estimating gives you a tool to quantitatively communicate about the risk of a task’s estimate.  It lets you stop pretending that task #135 is going to finish in precisely 15 days or that the project will absolutely finish by August 30.  It also lets you address the issue that most projects are launched with less than a 35% chance of finishing by their promised due date. Because no one talks about that issue, executives think the completion date is 100% guaranteed. They believe it’s only time missed when someone goofs off.

As an example, the best project managers tell sponsors that a project has a 65% chance of finishing by Analogous EstimatingAugust 30. These PMs also explain what they can do to increase those odds to 75% or 90% and what it will cost. Those same PMs manage the assignments of their project team members with an understanding that there is risk on each assignment. They use 3-point estimating techniques to get accurate numbers and reflect the risk.

3-Point Estimating Process

The 3-point estimating process starts with a discussion with the team member about the risk inherent in their task assignment. You discuss the bad risks that will make their task take more work and more time. You also discuss the good risks that will cause it to take less work and time. Why should you do this step? Because you need an estimating process that addresses the team member’s legitimate concern that bad things will happen on their assignment and they’ll be blamed for not meeting the completion date.

Let’s talk a little bit about risk. When you ask me how long it will take to read this newsletter, I might estimate five minutes. Am I guaranteeing you that no matter what happens you’ll be able to read the whole thing in five minutes? No, what I mean is that 5 minutes is my best guess. That means there is a 50% chance it will take you less than five minutes and a 50% chance it will take you more than five minutes.

But if you are my project manager and you ask me for a task estimate, I would be a little hesitant to give you an estimate in which there was a 50% chance of an overrun. What I would rather give you is an estimate where I’m 90% confident that I can finish in that much time or less. As the project manager, you would probably regard that estimate as padded. As the team member, I feel more comfortable with a 90% estimate. Unfortunately, there is no consistency in the amount of padding your team members do.

You want your team members to leave the estimating process knowing that you considered the fact that things can go wrong on a task assignment. Using the three estimates enables you to do that. It’s better than
having a team member give you a single estimate and play the padding game about how certain that estimate is. The three estimates tell you the variability in the task.

3-Point Estimating: Best Guess, Optimistic and Pessimistic Estimates

With agreement on the risks in the task assignment, you go on to ask for their estimates of work and duration (time). As the name implies, 3-point estimating requires three estimates for each task. That sounds like it will take a lot of work but it takes a matter of minutes.  You and the team member develop an optimistic estimate, a pessimistic estimate and a best guess estimate for each task. In developing those three estimates, we get more accurate estimates from team members and assess the task’s degree of risk and the range of durations.

Your team member estimates that a task has a best guess estimate of 80 hours of work.  That means that 50% of the time it will take more work and 50% of the time it will take less work.

Next, the optimistic work estimate is that it will take less work than the best guess.  It is not a perfect world estimate but you want an estimate that’s based on the good risks you identified coming to pass.  The optimistic estimate is low enough that the team member thinks they can get the task done for less than the optimistic estimate 20% of the time.  The task will require more work than the optimistic estimate 80% of the time.

The pessimistic estimate is that it will take more work than the best guess. It is not a “disaster” estimate but you want an estimate that’s based on the bad risks you identified coming to pass.  The pessimistic estimate is high enough that the team member thinks they can get the task done for less than the pessimistic estimate 80% of the time.  The task will require more work than the pessimistic estimate 20% of the time.

Now let’s dip our toe into the statistics and look at two tasks, Alpha and Beta, and the calculated work estimates you would use at three different levels of confidence.

We take the three estimates and use the following simple formulas*to calculate the task’s work estimate for a certain level of confidence of finishing within the estimate.

Mean=(4*BG)+OE+PE/6.  The mean is 4 times the best guess + the optimistic guess + the pessimistic guess divided by 6.

SD=(PE-OE)/6.  The standard deviation is the pessimistic guess minus the optimistic guess divided by 6.

Probability level = work= Mean +(z-score for probability)*SD

For task Alpha we can be 80% confident with an 82.2 hour estimate. But task Beta, with optimistic and pessimistic estimates that are further from the best guess than Alpha, will require an 88.7 hour estimate to reach the 80% confidence level.

Using 3-Point Estimating 

All of the better project management software packages, such as Microsoft Project®, enable you to use 3-point estimates and create a variety of reports that communicate the project’s risks. You can take estimates like those above and calculate the odds of finishing the entire project within various durations.  That information is a solid basis for a discussion with the sponsor about the tradeoffs between cost, scope, duration, risk and resources.

To learn these 3-point estimating techniques and the entire estimating process, consider our private, online courses where you work individually with your instructor. They are available by phone, video conference or e-mail whenever you have a question or need help on an assignment. We can also deliver a customized training program at your site for up to 25 people. Call us at 303-596-0000.