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Avoid These 5 Common Issues When Estimating Project Work

Brad Egeland

Word estimate on a colourful background

The customer wants new work to be done on the project that isn't currently part of the scope. Or perhaps the project hasn't started yet. You're still putting time and energy into creating your master schedule - building solid work estimates that will turn into timeframes of effort.

Accuracy - as much as you can hope for anyway since you're still really just estimating - is key to staying on-schedule, staying on-budget and ending in the black, profitably speaking.

In managing projects, I've done my share of estimating work and checking my team members' estimates. From those experiences, I've compiled five common issues related to coming up with good estimates on project work and change orders. How many of these do you recognise?

1. Basing the Work on Poor or Incomplete Requirements

Requirements are the lifeblood of the project. Without good, complete requirements, we cannot make good, complete estimates. It just snowballs from there. It's like building a house on sand…you'll likely never recover no matter how hard you try to fix things.

Instead, stop, take ample time and construct detailed requirements with your team and the customer. Then create a meaningful and accurate estimate. Then - and only then - start the work.

2. Padding the Estimate

Developers are notorious for padding - sometimes doubling - estimates. I know…I was once a developer. And I'm a very good estimator. One company wanted to hire me to replace its IT director, who was being promoted primarily just for that reason. The company didn't trust its lead tech, and the outgoing IT director didn't have the experience and skills to know when he was being provided with padded estimates.

Watch out for these. They will throw off your schedule and likely upset your customers if they sense that you're padding work estimates. Not a good position to be in with your project client.

3. Relying on Optimism

Another mistake that estimators often make when planning out work is only looking at the sunniest of days. Be realistic. Relying on overly optimistic work conditions and outcomes serves no good purpose. It isn't in anyone's best interest. It won't likely happen that way.

Plus you'll end up underestimating cost, time, resource availability and probably a few other things that will negatively affect the project just because you were relying on everything to go "just right".

Being Rushed or Under Pressure

One of the biggest problems when estimating is trying to meet someone else's rushed deadline. Pressure from the customer or pressure from your senior management - either way, it's a bad situation to be in.

Take the time you need to work with your team - and the customer, if appropriate - to estimate the work properly. Come up with the realistic numbers and prices that everyone really wants and needs…no matter how badly they say they "need it right now". In the end, they'll be happiest with a "realistic" estimate.

Failing to Consider the Risks

This is similar to relying on the optimism mentioned above. To mitigate risks, you must do some risk planning every time you're estimating work. Trust me, risks are out there - even if you're not yet aware of them.

What if that vendor cannot come through with the equipment on time? What if issues come up during testing? Weigh risks and their likelihood of happening. Then factor that into the estimate. Some will be realised, but not all. Again…be realistic.

Summary

Not everyone is good at estimating. Test yourself. Estimate work before you ask your project team members to provide estimates. See how close you are, and then discuss the differences. You might find you need to work on it, or you might find you're pretty good at it.

Either way, you need to know if it's a strength or weakness because you should always be checking estimates that come to you as you're putting together change orders or project efforts and timeframes. Watch out for these issues I've mentioned in this article, and you should be on the right track.