Project Management Basics

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Q. What are the scientific ways to do project estimation?

There are many different types of estimation techniques used in project management with various streams like Engineering, IT, Construction, Agriculture, Accounting, etc. A Project manager is often challenged to align mainly six project constraints - Scope, Time, Cost, Quality, Resources and Risk in order to accurately estimate the project. The common questions that come into the mind of a project manager at the start of the project are –

How much work is to be estimated (scope)
How to estimate the project (techniques)
How much time it will require to complete the project (Schedule)
Who will be doing the project (resources)
What is the budget required to deliver the project (cost)
Any intermediary dependencies that may delay or impact the project (Risks)

There are 3 major parts to project estimation mainly:-

Effort estimation
Cost estimation
Resource estimate

While accurate estimates are the basis of sound project planning, there are many techniques used as project management best practices in estimation as - Analogous estimation, Parametric estimation, Delphi method, 3 Point Estimate, Expert Judgment, Published Data Estimates, Vendor Bid Analysis, Reserve Analysis, Bottom-Up Analysis, and Simulation. Usually, during the early stages of a project life cycle, the project requirements are feebly known and less information is available to estimate the project. The initial estimate is drawn merely by assumptions knowing the scope at a high level, this is known as ‘Ball-park estimates’, a term very often used by project managers.

Top-down estimate:
Once more detail is learned on the scope of the project, this technique is usually followed where high-level chunks at the feature or design level are estimated and are decomposed progressively into smaller chunks or work-packets as information is detailed.

Bottom-up estimate:
This technique is used when the requirements are known at a discrete level where the smaller workpieces are then aggregated to estimate the entire project. This is usually used when the information is only known in smaller pieces.

Analogous estimating:
This technique is used when there is a reference to a similar project executed and it is easy to correlate with other projects. Expert judgment and historical information of similar activities in a referenced project are gathered to arrive at an estimate of the project.

Parametric estimate:
This technique uses independent measurable variables from the project work. For example, the cost for construction of a building is calculated based on the smallest variable as the cost to build a square feet area, the effort required to build a work packet is calculated from the variable as lines of codes in a software development project. This technique gives more accuracy in project estimation.

Three-point estimating:
This technique uses a mathematical approach as the weighted average of an optimistic, most likely and pessimistic estimate of the work package. This is often known as the PERT (Program Evaluation and Review Technique).

What-if analysis:
This technique uses assumptions based on varying factors like scope, time, cost, resources, etc., to evaluate the possible outcomes of the project by doing impact analysis. In a usual scenario, the project estimate is done by conducting estimation workshops with the stakeholders of the project, senior team members who could give valuable inputs to the estimation exercise. The high-level scope is broken down into smaller work packages, components and activities, each work package is estimated by effort and resource needed to complete the work package. The project may be detailed into the smallest chunk that can be measured. The following activities are done during the workshop:

Break down the scope into smallest work package, components or activities (WBS)
Sequence the activities in the order in which they will be performed
Identify the effort required to complete each activity
Identify the resource estimate to complete each task or activity
Identify the dependencies to complete each activity
Identify the possible risks and assumptions
Define the resource and cost estimate to the completion of each activity, component and work package

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Q. What is planning poker estimation technique?

Planning poker, also called Scrum poker, is a consensus-based, gamified technique for estimating, mostly used to estimate effort or relative size of development goals in software development. Planning Poker is an agile estimating and planning technique that is consensus based. To start a poker planning session, the product owner or customer reads an agile user story or describes a feature to the estimators.

Each estimator is holding a deck of Planning Poker cards with values like 0, 1, 2, 3, 5, 8, 13, 20, 40 and 100, which is the sequence we recommend. The values represent the number of story points, ideal days, or other units in which the team estimates.

The estimators discuss the feature, asking questions of the product owner as needed. When the feature has been fully discussed, each estimator privately selects one card to represent his or her estimate. All cards are then revealed at the same time.

If all estimators selected the same value, that becomes the estimate. If not, the estimators discuss their estimates. The high and low estimators should especially share their reasons. After further discussion, each estimator reselects an estimate card, and all cards are again revealed at the same time.

The poker planning process is repeated until consensus is achieved or until the estimators decide that agile estimating and planning of a particular item needs to be deferred until additional information can be acquired.

Benefits of Planning Poker Estimation

Planning poker combines three methods of estimation −

Expert Opinion − In expert opinion-based estimation approach, an expert is asked how long something will take or how big it will be. The expert provides an estimate relying on his or her experience or intuition or gut feel. Expert Opinion Estimation usually doesn’t take much time and is more accurate compared to some of the analytical methods.
Analogy − Analogy estimation uses comparison of user stories. The user story under estimation is compared with similar user stories implemented earlier, giving accurate results as the estimation is based on proven data.
Disaggregation − Disaggregation estimation is done by splitting a user story into smaller, easier-to-estimate user stories. The user stories to be included in a sprint are normally in the range of two to five days to develop. Hence, the user stories that possibly take longer duration need to be split into smaller use-Cases. This approach also ensures that there would be many stories that are comparable.

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Q. What is Ballpark Figures estimate?

A ballpark figure is a rough numerical estimate or approximation of the value of something that is otherwise unknown. Ballpark figures are commonly used by accountants, salespersons, and other professionals to estimate current or future results. A stockbroker could use a ballpark figure to estimate how much money a client might have at some point in the future, given a certain rate of growth. A salesperson could use a ballpark figure to estimate how long a product a customer was thinking about buying might be viable.

A ballpark figure is essentially a placeholder established for purposes of speculating what the amount or total of something might amount to so that the parties involved can move forward in whatever negotiation or planning is underway. As a concept, it has applications in business estimates, as well as in everyday life, depending on the circumstances.

Ballpark figures are estimates used to move a discussion or deal forward when the exact measurement of the size or amount of something cannot yet be determined.

Ballpark figures can be used for day-to-day purposes, such as estimating how much food and beverages might be needed for a barbecue or how many months it will likely take to pay off a new purchase.

Ballpark figures are also used everywhere in the business world, such as estimating how much it might cost to expand into a certain market, or how many years it might take for a company to be profitable or for sales to justify a large purchase. It can also be used to estimate public adoption of a concept, technology, or product, as in how many people are likely to buy a certain phone and how long it might take them to upgrade that phone, once purchased.

KEY TAKEAWAYS

A ballpark figure is an estimate of what something might amount to numerically when a more accurate number is assessed, such as the cost of a product.
Ballpark figures can be helpful in establishing a placeholder, for purposes of conversation or estimation, when a more precise number is not available.
Ballpark figures are used in daily life and in many aspects of business; however, it is important to remember it is just an estimate, not an accurate read of something.

Project Management Basics