Thoughts on estimating

Many years ago as a young graduate trainee on construction projects, I remember the partially tongue-in-cheek mantra “a successful project is down to good management, a failed project is down to bad estimating”.

This, of course, was in the context of projects that were competitively tendered and (generally) won by the lowest bidder. There was pressure on the estimators preparing the bid to be optimistic because if they weren’t then another bidder would be and they would win the contract.

But the message was clear, if the contract lost money, it was because the estimators had underestimated, not because the project was poorly managed.

Now we may dismiss this as building site banter but stop and think for a moment. We keep seeing reports of projects that run over budget and look for better ways of managing them so that they don’t. But surely, for many of these projects the management was fine – it’s just that the original estimate was way too optimistic.

If the average project overruns by 20%, the solution is simple, increase the average estimate by 20% and they’ll all come in on budget. Sorted!

Even in circumstances other than competitive tendering, there is pressure to underestimate because a sensible estimate would engender the response “How much!! – no, you’ll have to do it for less or it won’t get approved?”

In parallel with this ‘conspiracy of optimism’ as I once heard it called, there is the tendency for more complex and uncertain projects which are intrinsically difficult to estimate.

Do we need more advanced estimating techniques, more statistical data, more realistic acceptance of the inherently variable and inaccurate nature of estimating – or succumb to one idea from the Agile movement and simply give up on estimating altogether?

As one proponent of the #NoEstimates movement puts it “Estimation is difficult, perhaps impossible, and we would be well off if we could avoid it.” In some ways, this echoes a quote from that great quantum physicist Niels Bohr “Prediction is very difficult, especially if it's about the future”.

So, is estimation too difficult, is it too beset by uncertainty and over-optimism to be of any real use? Should we all give up and just ‘do stuff’ in the hope that it’ll be finished in time to be of any use and the cost will not be twice as much as the money we have available?

Interestingly, if we don't have estimates, we won't have schedules or budgets. Do we then have no need for a project manager because "chill out - it'll be done when it's done and cost what it costs".

Estimating is at the heart of planning. Planning is at the heart of project management. Without estimating we become a bit like Alice in her conversation with the Cheshire Cat...

Alice: Would you tell me, please, which way I ought to go from here?

The Cheshire Cat: That depends a good deal on where you want to get to.

Alice: I don't much care where.

The Cheshire Cat: Then it doesn't much matter which way you go.

Alice: ...So long as I get somewhere.

The Cheshire Cat: Oh, you're sure to do that, if only you walk long enough.”


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