PRINCE2 - Planning (PL) part 5
of the Cabinet Office under delegated authority from the Controller of HMSO.
Estimating (PL4)
Fundamental principles
Estimating cannot guarantee accuracy but when applied provides a view about the overall cost as time required to complete the plan.
Estimates will inevitably change as more is discovered about the project.
Context
Estimating follows identification of the activities in sub-process PL3 and precedes scheduling in sub-process PL5.
Process description
This is an iterative sub-process.
The objective is to identify the resources and time required to complete each activity.
This will include not only people but also all other resources that will be required.
Since the type of estimating will vary according to the type of project and level of plan, the guidance is of a general nature.
A Project Plan will normally require top-down estimating (that is, an estimate for the total project, broken down across the normal stages for a project of this type), whereas a Stage Plan or Team Plan would use bottom-up methods (an estimate for each product, built up into a figure for the whole plan).
The two major steps in a typical estimating process are:
- Identify resource types required
Specific skills may be required depending on the type and complexity of the project.
Requirements may include non-human resources, such as equipment, travel or money
It is important to agree a definition of resource types.
For staff this should include:
- The skills and experience level(s) required
- Where these skills can be found so that the commitment required of different parts of the organisation can be identified.
- Estimate effort required for each activity by resource type
At this point the estimates will be approximate and therefore provisional.
The reliability of estimates depends on:
- How detailed the understanding of the activity is
- The assumptions made
- Understanding the products (from the Product Description)
From this information we can estimate the elapsed time (duration) for each activity for use in Scheduling (PL5) (See the example list of activities for the organisation of a conference and their duration, in file ‘conference tabular list.doc’ in the product package).
The assumptions that underpin the estimate, the margin of error and the degree of confidence in the estimate should be recorded in the plan.
This information will enable the Project Board to set appropriate tolerances. Tolerances are full described in the section on Controls.
If current understanding is insufficient, the earlier planning sub-processes may have to be reworked.
Responsibilities
The Project Manager is responsible for estimation on Project and Stage Plans.
Team Manager will be responsible for Team Plan estimates.
It is a difficult job and, wherever possible, extra help should be sought.
It requires previous experience in the subject matter of the plan as well as training in the job of estimation.
This is where expertise from Project Support can help greatly.
| Management information | Usage | Explanation |
|---|---|---|
| All planning information so far | Input | Products and activities that require estimation. |
| Activity estimates (effort and duration) | Output | Estimated activities are passed to Scheduling (PL5). |
These are given in tabular form in the file ‘PL4 estimating.doc’ in the product package.
Key criteria
- Is the estimation to be made against known resources or general requirements for skill and experience?
- What level of productivity should be taken for the resources?
- Should allowance be made for different levels of productivity in the resources?
- What supporting infrastructure does the estimate assume is in place?
- Are these assumptions documented in the plan text?
- Has allowance been made for quality checking products?
There may be a computerised estimating tool, written text, tables, graphs or formulae available for the type of work identified in the plan.
These tools are normally based on information of actual time taken by identical or similar activities to the ones required in the plan.
The figures can generally be tailored to some extent to reflect more closely the environment for which the plan in question applies.
Estimation is best performed by a group of two or three people experienced in both the subject matter and estimating.
This number tends to balance out any individual over-optimism or pessimism in estimation.
Where possible, estimating should include discussion with the people who will be responsible for doing the work.
In a large project or difficult areas of work, it is prudent to estimate at least twice, either by using two distinct approaches or by allowing two different sets of people to estimate independently.
When resources have been estimated, it may become clear that resource constraints cannot be met.
If this should happen, the matter should be referred to the Project Board.
More uncertainty should be expected in Project Plan than in a Stage Plan.
A Stage Plan is for a shorter time frame, in the near future and planned in much greater detail.
Refer to the Lessons Learned Reports fro earlier similar projects.
Understanding past estimation successes and failures by reading the Lessons Learned Reports of other projects can assist with estimating.
Any assumptions made during the estimation process should be documented under the heading of ‘Assumptions’ in the plan text.
If the assumption refers to a risk, should be documented in the Risk Log.
Managing Successful Projects with PRINCE2 - 2005 edition
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