Project Estimation Techniques Guide
Project estimation techniques help project managers accurately estimate essential elements, such as cost and scope, within their projects. In Agile IT operations, these techniques can be used to plan for resource allocation properly.
These estimation techniques allow PMs to provide better forecasts to clients and more accurately budget the funds and resources they need for project success.
In this guideline, we’ll discuss what project elements should be estimated and how you can start using estimation techniques in project management.
Estimates in Story Points
Estimates in story points are tricky for those who have never used these relative measurements. However, it keeps estimation steady regardless of team size. A team commits to less work or takes more depending on team scaling.
Classic Scrum size of each card is as follows: 1/2, 1, 2, 3, 5, 8, 13, 20, 40, 100, ∞, ?
For convenience, one may use online tools to do the estimation in story points.
One of the classic approaches is Poker Planning for user stories or tasks as they are “equal“ in terms of sizing. Further breaking them down into sub-tasks is part of Sprint planning.
A mix of the Fibonacci sequence is used to simplify estimation; however it is recommended to include all types of activities when estimating tasks:
- Analysis
- Discussions
- Design
- Coding
- Testing
- Deployment
- Potential rework (tech debt, temporary solution).
The comparison below can ONLY be used as an example to think about story points relative to absolute units!
Teams consider only how much effort a product backlog item will require relative to other items.
More about story points you may read on the Scrum.org site.
Estimates Of T-Shirt Sizes
T-Shirt sizes do not provide precise estimates since they are also relative measurement points. To get an idea of how big is a story/task, one has to establish it before the evaluation session. It is quite effective during the Refinement meetings when a Product Owner needs a rough estimate.
One may consider the following relations of points when thinking of the T-Shirt size:
- S (1–3)
- M (5–8)
- L (13–21)
- XL (40–100)
Other Estimations Techniques
Expert opinion
This approach is valid only if the details are known and the experts are familiar with the domain and have experience. For better results, it would be beneficial to decompose big tasks. Delphi technique is somewhat similar.
Analogous estimating uses expert judgment and historical information and is similar to Expert opinion but doesn’t require domain experts to be involved.
Three-point estimate
This approach is often used when providing high-level estimates during the presales. However, it can be applied to estimate tasks of an ongoing project.
Risks must be identified and known to everyone involved in the estimation.
The simple average of the three-point estimates can be calculated as follows:
(P+O+M)/3, where M — most likable time, P — pessimistic, and O — optimistic, including the risks and can consider as something unknown.
Also, another formula derived from the Program Evaluation Review Technique (PERT) can calculate another average value:
(P+4M+O)/6
Activity standard deviation is the possible range for the estimates and is calculated as follows:
(P-O)/6
By default, the estimation is done in hours for all activities, including project management.
Tips
- Do not overestimate.
- Plan less, deliver more.
- Estimates are the assumptions of knowns (design, integration) and unknowns (uncertainty, risks).
- Divide tasks into smaller & manageable pieces.
- Use Velocity range calculator.
- Consider other’s work & dependencies during estimation.
- Standardize the feature requirements template and process.
- Involve everyone who can contribute.
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