UBC Award of Achievement eight one-day courses

May 15 - July 3, 2009 (6 Fridays)

1. Scheduling Projects and tasks
May 15, 2009		 2. Managing projects and resources
May 22, 2009		 3. Initiating Projects Laying the Foundations for Success
June 5, 2009		 4. Specifying and Estimating Deliverables
June 19, 2009
5. Building High-performance Teams to fast track projects
June 26, 2009		 6. Communicating Progress to clients and management
July 3, 2009		 Brian Mullen , MSc, MCP,  your workshop leader UBC Robson Square

5. Estimating Project Effort and Cost

Friday, June 22, 2009, 9am - 4pm at UBC Robson Square,

See detailed hour by hour agenda for Estimating effort and cost.

Estimating Effort and Cost is the fifth session presented in the UBC Award of Achievement: Project Management with Microsoft Project.

The biggest challenge a project manager faces is estimating project effort and budget for a project. Before clients commit to a project they want to know how long a project will take and how much the project will cost. Often they want this information within days yet many organizations have no organized methodology for preparing estimates. The accuracy of the estimate depends upon many factors. You need to know the scope of the project. As the project progresses and the scope definition improves you should be able to produce more accurate estimates.

How long a project takes to complete depends upon size of the project, the quality of the project planning, and the performance of the project team. Your deliverables determine the size of your project. Translating scope into realistic estimates requires historical records of previous projects. Projects vary in size so estimating requires a method to extrapolate between projects. The schedule depends upon the work effort and the size of your project team. You can reduce the schedule by increasing the size of the project team.

Your estimate establishes expectations with your client. They plan other business activities based on when the project will be delivered. Underestimating work effort, schedule and budget has significant downstream impact.

The project budget built up from labor, equipment and materials. Labor and equipment costs are the most challenging to estimate.

Labor costs depend upon work effort and cost per unit hour. The work effort depends upon the size of the activities to be completed, the method chosen to complete the work and the performance of the resources performing the work. Higher performance reduces the work required. Performance depends upon the experience of the team, the methods chosen and level of preparation for the task.

Once you know the work effort for a task you can compute the cost with the formula:

Cost = Work * cost rate per hour.

A key step in estimating is to quantify the project size compared to other projects of a similar nature. Accurate project records require creation and update of project plans for these projects. Estimating helped if these projects have a standard work breakdown structure with a detailed specification of the deliverables. As well you need to know how to extrapolate between projects of difference sizes?

Participants will learn to:

  1. Measure project size and performance with parameters
  2. Overcome the challenges of estimating
  3. Apply industry standard estimating methods
  4. Estimate effort and cost by phase for each deliverable.
  5. Calibrate industry methods for your organization.
  6. Develop estimating spreadsheets rules of thumb
  7. Generate project plans from estimating worksheets
  8. Improve estimating capability
Estimating Project Effort and Cost Agenda
Friday, Oct 20, 2006, 9am - 4pm
Friday, Oct. 20, 2006  Topic Estimating Project Effort and Cost agenda
9am Estimate duration, effort and cost
  • Understand scope of estimating. 
  • Objectives of Estimating Section. 
  • Brainstorm challenges of estimating. 
  • Examine why projects fail to meet project deadlines. 
  • Overcome estimating challenges. 
  • Understand three types of estimating. 
  • Compare macro and micro estimating with Build to Cost Estimating. 
  • Estimate budget and schedule. 
  • Estimate cost of a pipeline.
9:30am Estimate software development projects with Function Points
  • Catalog functions within the system. 
  • Count functions by function type and complexity.
  •  Quantify system size with total function points.
  •  Capture software delivery rate with function points per month. 
  • Estimate work effort by activity type with performance figures. 
  • Determine skills and resource types for each activity. 
  • Transfer estimates from Excel to Microsoft Project with Cut and Paste. 
  •  
10am Coffee 
 10:15 am Calibrate industry standards for your organization
  • Research industry standard estimating methodologies.
  • Understand variations in performance between organizations. 
  • Calculate estimates for completed projects. 
  • Calculate calibration factors for standard methods.
11:45 Measure project size and performance with estimating parameters
  • Benchmark other organization performance.
  • Brainstorm estimating factors with Project Managers. 
  • Standardize work breakdown structure. 
  • Define standard types of deliverables. 
  • Select factors to measure project size.
12noon Lunch break  
1 pm Define resource requirements
  • Identify generic resource needs. 
  • Estimate workload by project stage. 
  • Evaluate alternative resource levels. 
  • Allocate scarce resources to achieve maximum results with Zero Based Budgeting. 
  • Determine staff levels for each stage. 
  • Determine resource charge-out rates. 
  • Estimate material costs.
1:30pm Determine phasing strategy
  • Chunk project into phases and  by deliverables.
  • Package project into releases (alternative 3). 
  • Reduce planning complexity by looking for repeating patterns with Matrix decomposition. 
  • Select appropriate sequence for project phasing. 
  • Define tasks and sub-tasks under each project phase with methodology. 
  • Repeat decomposition to next level. 
  • Achieve cognitive economy with matrix decomposition.
2 pm Prepare master schedule
  • Determine resource use and costs. 
  • Generate master plan in Microsoft Project with Visual Basic Routine. 
  • Check for appropriate timing against calendar. 
  • Consider seasonal factors and other scheduling considerations. 
  • Setup project calendar to define working periods and shifts.
2:30pm Coffee
2:45 pm Define estimating framework
  • Estimate future performance with Past performance. 
  • Setup estimating spreadsheets and programs. I
  • Identify units to measure estimating factors. 
  • Calculate resource unit costs. 
  • Define conversion factors between different units.
3pm Develop estimating rules of thumb for work effort
  • Collect statistics for each factor on previous projects. 
  • Reconstruct records for projects with no data with Microsoft Project. 
  • Find significant relationships between factors and effort, duration and cost with Multiple Regression Analysis. 
  • Develop internal rules of thumb based on your organizations performance. 
  • Calculate estimating rules of thumb for each factor.
3:30 pm Manage project to budget
  • Focus efforts on high priority items.
  • Control scope creep with Change control.
3:30 pm Improve estimating capability
  • Train new project leaders in estimating skills.
  • Estimate completed projects where you know the actual results.
  • Review estimates to coach people.
  • Provide contingency for overlooked items.
  • Include estimates for overhead activities.
  • Avoid padding estimates by too much.

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Updated: July 2, 2010.
email Brian Mullen with your questions