Bottom-up Estimating – Video

Dick Billows, PMP
Dick Billows, PMP
Dick’s Books on Amazon

Bottom-up estimating is a project management technique in which the people who are going to do the work take part in the estimating process. Typically those people are the employees, vendors and other project team members. They work with you, the project manager, to develop estimates for tasks in the work breakdown structure (WBS). Setting the estimates of the amount of work, duration and cost at the task level lets  you combine them into estimates of higher-level deliverables and the project as a whole.

Bottom-up estimating is the most accurate approach to estimating the cost and duration of project tasks. It also requires the most time. This estimating technique gives the entire project team the opportunity to take part in developing the estimates used to measure their work. As a result, bottom-up estimating tends to develop a higher level of project team commitment than other types of estimates (like parametric and analogous). The drawback of the bottom-up approach, however, is that it takes more time than other estimating techniques. A second issue is that you must wait until you know who will be on your team before you can do the bottom-up estimating.

In this video, Dick Billows, PMP, discusses how to make accurate estimates for small to medium size projects.

Making Accurate Estimates of Time and Cost

Bottom-up Estimating: Working Your Way Up

In bottom-up estimating, you follow a three-step process, working from the lowest level of detail in the work breakdown structure (WBS). You begin bottom-up estimating by developing a detailed work package to go with the WBS. In the work package, you detail the scope and major deliverable that each team member will produce.  You describe its cost and duration as well as the risks that affect the task.

This work package is like a contract between you and the team member for their task. You need this contract to make the bottom-up estimating process work effectively with as little padding of the estimates as possible. Team members pad their estimates because they’re concerned about the scope of their work expanding without any adjustment to the estimates. They foresee finishing late on the expanded scope and being blamed for missing their commitment. A similar result can happen when external events affect their ability to get the task done within the estimated timeframe. Because of these factors, work packages are an effective tool for clearly explaining to the team member that any changes to the work package are going to reopen the estimating process. In that sense, it gives them protection from scope changes on their task(s). That is why the work package documents the deliverables, the risks and the approach to the task. You record the team member’s estimates and you both sign the document.  This removes a lot of the anxiety from team members who have previously been burned by the estimating process.

Bottom-up Estimating: From the Work Package

Once the work package is complete and the team member is comfortable with it, you can go on to develop the cost and duration estimates. In bottom-up estimating, you must be careful not to force an estimate on the project team members. If you force the estimate on the team member, you cannot expect to earn much commitment from them. That commitment is dependent on a free and open negotiation where the team member feels the estimate is fair and reasonable. You may use the team member’s pessimistic, optimistic and best guess estimates developed in the 3-point estimating process. That technique allows the estimates to show the task’s uncertainty.

Alternatively, you can use an analogous estimating technique with the team member. You will look at the actual amount of work that similar tasks required on completed projects. If you have several projects and tasks to draw information from, you can quickly reach a consensus on how the current task compares to the other tasks. Then you can adjust the estimated work number to show that difference. The team member needs to actively participate in this discussion and in determining the work number that you will use.

Last, you aggregate the estimates for each activity in the lowest level of the WBS and roll the numbers up to develop estimates for the major deliverables and the project as a whole.

You can use a number of mathematical techniques with bottom-up estimating. The most popular and most accurate is  3-point estimating where each team member provides their pessimistic, optimistic and best guess estimates for the calculations. Which is the Best Estimation Technique?

To learn more about how to do bottom-up estimating, consider our online project management courses. You work privately with an 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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Project Estimation Sponsor Games

Dick Billows, PMPProject Estimation Sponsor Games are played by ineffective sponsors who use intimidation and manipulation avoid being held responsible for project results. These sponsors don’t play the sponsor role effectively by clearly detailing the project scope and the deliverables they want.  Instead, the dodge all commitment and seek to set up the project manager and team to take the fall is the project fails.  So as you start a new project you need to know how to play the game to avoid being set up any and executive who plays project estimation sponsor games.

Project estimation sponsor games tactics

These sponsors add games and high-pressure tactics to the estimating process. These sponsors say things like,

  • “Any competent project manager should be able to give me a precise estimate at the beginning of a project.”
  • “I can’t make any decisions if you cannot give me a firm commitment to be done by December 15.  I mean I spent an hour with you telling you what I want. Why can’t you commit?”
  • “These numbers are padded with at least 25% fat.  What are you looking to take a vacation to the last month the project? Cut these numbers down to something that’s realistic, I don’t care how hard you and the team have to work.”

Games the Sponsor Plays

New project managers or PMs who haven’t encountered a sponsor who plays games can get sucked into this manipulation. Particularly naïve project managers may actually think they sponsor knows what he’s talking about.

From talking and working with dozens of these sponsors from hell, they have one operating principle. They think fear will drive the project manager and team to work themselves to death to finish the project early and under budget.  They think coercing a commitment to a completion date will motivate people to drop other things, including their personal lives, to meet that commitment.

What actually happens most often is that the project manager and the team quickly realize that the sponsor’s numbers are unachievable. Rather than working themselves to death, they put the sponsor from hell’s project on the back burner and work on projects that have a better chance of success. In fact, these intimidating sponsors from hell usually have the highest project failure rate in the organization. Project managers and team members go to great lengths to avoid assignment to the projects of the sponsors because failure is almost certain.

How to play the Project Estimation Sponsor Games

No matter how much effort you spend to get assigned to the right projects, you’ll get stuck working for a sponsor from hell some time in your career. You need to know how to play the game and remember you’re always polite and respectful when talking to senior management

  • First, you need to recognize that no organization has ever fired a project manager for refusing to commit to a completion date or budget for a project.
  • Second, you cannot count on the professional integrity of the sponsors from hell. Accordingly, every mention of completion dates or estimates should be in writing. Never communicate estimating data verbally or over the phone. It’s also wise to put a copy of all the estimating correspondence into the project work file.  Let the sponsor know you’re doing that with a cc to the project file.
  • Third, you never give an estimate that is just a point value you always give a range. In other words, you never say, we’ll be done by June 15.” What you say is I’m 80% certain will be done between June 12 in June 23. Budget estimates are likewise ask expressed as a range. ”I estimate that the project will cost between $15 and $18,000. “

If you follow the rules, you give yourself a defense against the sponsor from hell misrepresenting what you said or telling others that you made commitments when it’s not true.

Importance of Status Reports

As you are identifying stakeholders who are affected by your project for this sponsor, it’s always a good idea to get them to agree to receive your weekly status reports. You don’t want to take a lot of their time but you want people to see what’s happening on the project. Often sponsors from hell restrict the number of people who receive status data or they take over the status reporting job. When this sponsor starts talking about those things, the alarm bell should go off in your head. It’s very valuable to have a list of managers and executives who have asked for status data and you should give it to them every week.

While your status report should be short and concise they should also have a forecast every week of the completion date and estimated budget (both expressed as ranges). That way you have a reasonably good defense against accusations that variances have come as a surprise to the sponsor from hell. It’s great to have a series of status reports that identify variances and also have other people who have received them. That  can protect you from Project Estimation Sponsor Games.

Project Estimation Sponsor Games Summary

You may go through your entire project manager career and never encounter sponsor like the ones I’ve mentioned. Just tuck this article in the back of your project management toolkit and keep these defensive measures in mind if you do encounter a project sponsor who likes to play games and intimidate project managers. Courses in your specialty.

Program Manager – Multiple Projects

program management
Dick Billows, PMP

Program managers are responsible for the performance of several projects, their project managers and the human and financial resources the program consumes. They are also accountable for the benefits, the business value, the projects produce. Program management is focused on allocating resources to the various projects in the program to maximize the overall business value.  As well, the program manager must meet the often conflicting needs and requirements of the stakeholders of those projects. Program management  uses the tools and techniques of project and portfolio management but must also deal with complex interpersonal relationships.  The program manager deals with senior management as well as lower management levels. Controlling the expectations of these manages and securing their support for projects is the heart of the job. The large number of stakeholders affected by the projects in the program consume much of the program managers time.

Becoming a program manager is the next step up for experienced senior project managers. Program management includes the skill to managing multiple projects with related outcomes that the organization bundles into a program. The program manager usually has project managers as subordinates, each of them managing one of the component projects in a larger program. Many program managers manage several programs at a time. They may even manage all of the projects and programs in an organization. Project Management Careers Main Page

Program Manager: Interpersonal Skills

The program manager must have very strong interpersonal skills because they interact with the organization’s executives. They must persuade and influence the executives in order to maximize the yield on each of the organization’s projects and programs. There are always executive conflicts about project and program priorities and the program manager must be able to address those issues and build consensus for a solution. Therprogram managemente are also weekly conflicts about the prioritization of projects as new projects are added to the organization’s portfolio. The program manager needs to build consensus on those priorities so that resources can be allocated based on the organization’s priorities.

Program Manager: Technical Skills

Second, the program manager needs to possess the technical skills to allocate resources across all of the organization’s projects and track the status for each of them. The program manager needs to be able to assemble status data and analyze variances with techniques like earned value management to be able to present executives with accurate and timely status data so they can make decisions.

Program Manager: Subordinate Development Skills

Third, the program manager must be able to teach the subordinate project managers a consistent methodology for doing their projects. This means all projects are managed with the same techniques and tools.

Program Manager: Summary

The highest level of certification in the project management area is the program manager certification. There are some important skill sets that you need to add to your project management toolkit to manage multiple projects, either in a large program or a portfolio. Those skills include software techniques to consolidate all the projects, track resource utilization, and ensure people are working on the right assignments at all times. Even more challenging for program managers is the skilled to deal with a group of executives, manage their expectations and persuade them to follow the best practices in project management. The interpersonal, communication and presentation skills at the program manager level require training and practice.

We offer a Program Manager Certification that teaches all of these skills. It’s a two course online program for experienced project managers that is approximately 120 hours of work with individual coaching from an expert program manager. One course is devoted to program management and methodology skills. The other course focuses on interpersonal, professional communication and presentation skills. You give live online presentations to your instructor and practice persuading and influencing executives. You help them reach agreement on issues like program priorities and resource allocations. Courses in your specialty

Project Plan in 5 Steps

Dick Billows, PMP
Dick Billows, PMP
Dick’s Books on Amazon

You can produce an excellent project plan that can fit on one side of one piece of paper and take less than an hour to create. It will be suitable for 90% of the projects that most organization do. The key to making this work is for you and the project sponsor to play your roles properly. The project sponsor (that’s the boss, executive or customer who wants the project done) has to define the business result that the project must produce. That business result is the scope of the project and it has to be a metric. The scope must have acceptance criteria that define success in objective, measurable terms. If the sponsor prefers to “plan as we go,” and “stay flexible so we can adjust,” they are not fulfilling their role on the project. It would be foolish to start work on the project without knowing where you need to be at the end.   Main Project Planning Page

Your role as the project manager is to get the sponsor to tell you the acceptance criteria-type of scope definition. Then you and the sponsor break the scope down into the major deliverables the project has to produce. These deliverables the stepping stones for how the project will move from where it is now to the end result the sponsor defined. You are not doing your job if you start work before you have a clearly defined scope with major deliverables. Let’s look at the steps you need to follow.

Project Plan Step 1 – Defining the Scope

Defining the scope involves gaining agreement on the metric that the sponsor (the boss, executive or customer) will use to measure the end result of the project. Project planSponsor who have a successful track record for initiating projects know that you (the project manager) need a clear definition of the project scope that includes a success metric. If the sponsor doesn’t know how to play his or her role, anonymously send them a link to this article. You don’t want your project to fail because the sponsor has a failing record on their projects.

Once you have that success metric, you can create the project plans and schedules rather easily. The difficulty comes when people try to skip this first step or when the sponsor doesn’t know how (or is unwilling) to define the project’s success. Without that scope metric, the rest of the project pieces are useless. Here’s an example of a small project to illustrate how this is done.

A project manager gets a phone call from a project sponsor who says, “I’d like you to run a project for me to deal with our problems getting office supplies out of the warehouse.”

The project manager goes to the sponsor’s office and during the discussion, asks open-ended questions aimed at defining the scope. It’s very possible that the sponsor has started the conversation about the project without having a clear picture of the end result they want. The project manager has to ask questions which help the sponsor define the project’s end result. The project manager asks how performance of the warehouse will be different after the project is complete. The sponsor says, “We can’t run out of supplies so often; we have to reduce the number of these stock-outs. And it shouldn’t take people as long to find what they need.” The project manager should follow up with questions like, “How often do we run out of supplies now?  What’s an acceptable number of stock-outs each month?” The project manager might also ask, “How long does it currently take to find supply items and how long should it take?”

That’s a good example of the project manager asking polite and respectful questions in an attempt to get the sponsor to be specific about the project’s scope. Let’s say the sponsor says people should be able to find the supply they want in less than 120 seconds 90% of the time. That is a crystal clear metric or acceptance criteria for the project scope.

Project Plan Step 2 – Breaking Down the Scope into Major Deliverables

With the scope defined as a metric which the warehouse project must produce, the project manager will work with the sponsor to break that scope into 4 to 7 major, high-level deliverables. They will lead from where the warehouse performance is now to the end result the sponsor wants. The PM may talk to people in the warehouse to find out why it to take so long for people to find the supplies they need. The PM may also ask the warehouse staff for their ideas about how to reduce the time needed to get a supply. The project manager may come back to the sponsor with some suggestions based on this fact-finding process. They may suggest the following high-level deliverables:
1. Increase the lighting in the warehouse to an average of 65 lumens
2. Track the location of all supply items with 95% accuracy on a commercial PC inventory system. The system cost should not exceed $500.
3. Discard any supply items in the inventory that have not been used in the last four years.
4. Redesign the inventory layout so the most frequently utilized supplies can be retrieved in less than 30 seconds.
5. Distribute new procedures for using the supply warehouse to all employees.

Each of those high-level deliverables has an acceptance criteria that can be objectively measured. The project manager reviews the deliverables with the project sponsor. The sponsor may change or adjust any of the deliverable’s metrics to fit his/her assessment of the situation. When the sponsor signs off on the scope and the high-level deliverables that will lead to it, the project manager has a strong start on the project plan and can move on to the planning details. The key point here is that the sponsor and project manager worked top-down; starting from the end result down to the contributing deliverables that will help them get there.

Project Plan Step 3 – Breaking Down the Major Deliverables

The next step is for the project manager to continue to break down those major deliverables into smaller deliverables. The lowest level of deliverables should be suitable for assigning to an individual. These assignments should also be measured deliverables so the team members know what is expected of them (what they must produce) before they start work. These deliverables will become tasks in the work breakdown structure (WBS).  They are also the basis for estimating the amount of work, cost and duration of each deliverable.

Project Plan Step 4 – Estimating

Once this breakdown into smaller deliverables is complete, the project manager has an assignment for each team member. The next step is to meet with the people accountable for producing each of those deliverables. Each of the tasks (the lowest level deliverables in the work breakdown structure) will have an estimate of the amount of work and  the duration. The project manager engages the team members in this estimation process. Involving each team member in this part of the process produces more accurate estimates. The team members also become more committed to producing their deliverables in the estimated amount of time. The PM will enter this data into project management software to create the schedule and budget. Using project management software saves project managers a great deal of time. Software options include Microsoft Project and several low cost or free scheduling applications that are available on the web. Any of those are suitable, especially for a small project.The project manager  will track each task’s actual work and duration against the plan.

Project Plan Step 5 – Final Approval By the Sponsor

The last step in developing the project plan is to secure the sponsor’s final approval on the project scope, major deliverables, budget and the planned duration of the work. With that approval, the project plan is finished and the project manager can begin work.

At the beginning of your course, when you and Dick talk to design your program and what you want to learn, you will select case studies that fit the kind of projects you want to manage. Chose you course and then select the which specialty case study from business, or marketing,  or construction, or healthcare, or consulting.  That way your case studies and project plans, schedules and presentations will fit your desired specialty.

  1. 101 Project Management Basics
  2. 103 Advanced Project Management Tools
  3. 201 Managing Programs, Portfolios & Multiple Projects
  4. 203 Presentation and Negotiation Skills
  5. 304 Strategy & Tactics in Project management