A project can be defined as a temporary undertaking that produces a unique product or service. Businesses undertake projects all the time. But it’s important to learn how to do project estimation.
This is because project management can be difficult to do, but it’s something you need to get right. You need to take into account all of the different factors that go into project planning and execution. And then you have to calculate how much it will cost for each of those factors.
Poor project estimates not only make the project more expensive and time-consuming than they need to be. But they may also cause project failure. This post covers 8 typical pitfalls of project estimation and how they can be avoided.
What is Project Estimation?
Project estimation can be defined as the process of arriving at an accurate project cost and schedule. Organizations undertake project estimates because project plans are always variable. It depends on who is performing them, when they begin and how long they last.
When it is done correctly, it’s the process of forecasting all project-related costs and timeframes. This includes determining how much each task or project will cost to complete.
This means that estimating a project accurately allows organizations to take into account all these variables in their planning stages. Rather than after the project starts.
Project estimators look at several factors in order to determine these estimates. They consider things like project size and complexity as well as other unique elements that may affect a specific project estimate for a client.
Why Project Estimation is Important?
Project estimation is important because it helps project managers with planning, scheduling, and budgeting for the project at hand. If the project manager plans incorrectly from the start then this can lead to cost overruns or missed deadlines. Even worse, project failure.
The project manager must understand both the scope of their project and how much time it will take to complete that work. If they don’t know this then scheduling project tasks become impossible. This means that an accurate estimate is key for any project’s success at all stages.
Therefore, estimation must be an integral part of your planning if you want any chance of success with your project. If you don’t take into account current market conditions, staff availability, and budgets. Then there’s no point starting the work at all.
In fact, good estimating can help even if your project fails. It means you won’t lose as much money and time next time around because of the project estimate.
8 Typical Pitfalls of Project Estimation:
There can be many pitfalls in project estimation. This is because it involves predicting the future based on past performance and current conditions. Making any estimate inherently difficult to do well in this context.
So there are many examples of where project estimates can go wrong. Some common pitfalls include:
Poorly defined scope of work:
Project estimates are only as good as the project plan. So if your project scope is not clearly defined then it will be impossible to estimate accurately. This is because project estimators have to know both project scope and project plan. So if one of those things is missing then project estimation becomes impossible.
Here are some tips to avoid this:
- Make project scope your top priority from day one.
- Ask for project requirements as early as possible and make sure they are complete before you start work on the project estimate or plan.
- Only work with project stakeholders who are as invested as you in project success.
Omissions:
Omissions are when project estimators fail to estimate project costs properly. This can either happen because of a lack of information or just missing some elements from the project entirely.
For example: If you don’t take into account expenses like material and equipment costs then your project estimates will be inaccurate.
Here are some tips to avoid project omissions:
- Check project requirements several times to ensure nothing is missing.
- Get all requirements for estimating right upfront before you start working on them.
- Build time for yourself and others involved to review project plans before submission.
This way everyone is clear about what needs doing and why they’re important steps towards achieving project success.
Ignoring project contingencies:
Projects are always susceptible to change, so it is important for project managers and estimators to have contingency plans in place. This way if they need them then everyone can stay on track with the original project plan most of all time.
Here are some tips to avoid ignoring project contingencies:
- Build extra days for your project schedule into your deadlines when you estimate a project or task.
- Make sure you review every stage of the work regularly with clients and stakeholders.
Rampant optimism:
This is when project managers and estimators put too much faith in their ability to estimate project costs. So they underestimate the time, cost, or difficulty of work involved just to get a project going. This is a popular project management mistake, but it will end in project failure.
Here are some tips to avoid this common pitfall:
- Only estimate projects that you have the experience and skills to complete properly with your team.
- Make sure everyone involved knows what is expected of them at every stage. So there are no surprises for anyone when things go wrong.
- Focus project management time on project issues rather than project tasks. This way you will be better equipped to deal with any problems when they arise.
Padding:
Padding project estimates is when project managers and estimators intentionally increase project time or costs. So that, they can protect themselves from the consequences of missing a deadline. This means they will be less likely to lose their jobs if things go wrong. But it also makes them more likely to miss important deadlines too.
Here are some tips for avoiding this common project management mistake:
- Make sure everyone involved knows what work needs doing at every stage. So there no room left for misunderstandings later on.
- Build extra days for your project schedule into your deadlines.
- Build extra resources into your schedule like people and equipment if you know it will be needed most of the time.
Failure to assess risk and uncertainty:
This means project managers and estimators do not take into account how likely it is that project costs, scope or deadline will be achieved. This can result from inexperience with the project type or team involved.
Here are some tips for avoiding this common project management mistake:
- Give yourself enough time to properly assess your project skills and knowledge before estimating.
- Build contingency plans into every stage of a project just in case they’re needed later down the line.
- Build project risk management into your project plan, so everyone knows what to do if things go wrong.
Time pressure:
This project management mistake is when project managers and estimators don’t take time to estimate all project requirements. They are under too much pressure from their boss, client, or stakeholder to get the job done urgently.
Here are some tips for avoiding this common project management mistake:
- Give yourself enough time before starting a project – so you can properly assess your skills and knowledge.
- Build project risk management into your project plan.
- Give yourself enough time to properly estimate a project before starting it too – don’t rush this important stage of project planning.
Failure to involve task performers:
This project management mistake is when project managers and estimators do not involve anyone who will be directly responsible for completing project tasks. This means they miss out on vital information about how long performing certain work tasks should take to complete them.
Here are some tips for avoiding this;
- Give project team members the chance to talk about their project work with you before estimating it.
- Build project risk management into your project plan so everyone is aware of any issues early on.
- Make sure project managers are involved at every stage, not just when problems arise.
