By Mohit “Mo” Sahgal
In the last blog, I introduced the pitfalls of both avoiding initiative work effort estimation, and inaccurate work effort estimation. This blog focuses attention on what happens when you guess or create a high-level, summarized or generalized work effort estimate. The most common examples of guessing and generalization are arbitrary activity duration. An example of that would be saying “in 90-days” or “ in a 9-month” delivery cycle. These unreliable “predictions” ignore the real factors driving the work effort, staffing, task duration and costing. What is more challenging is guessing without accounting for assumptions and risks. Even when estimation is difficult, guessing should be avoided.
The implications of generalization and guessing are self-evident: cost overruns, delays, poor customer satisfaction, poor performance, missed targets, and increased risk. Organizations can avoid these situations by using a combination of techniques, some of which may appear to be obvious but are often overlooked:
- Clearly defining the scope of the work (“charter”). Key elements required for estimation include: major workstreams, activities, major milestones, interdependencies, resource and skill requirements, etc.
- Assessing the impact of changes or exceptions.
- Using controls to track changes or exceptions to the charter as formal record of senior management acceptance.
- Updating the work effort estimate based on the accepted changes or exceptions.
- Creating and updating a detailed work plan to accomplish the stated objectives, regardless of the implementation methodology.
- Establishing a baseline for the plan.
- Updating the plan with actuals on a regular and frequent basis.
- Using earned value to address schedule and cost variances.
- Using analogous estimates, subject matter advisor input, and prior project experience to begin the sizing, benchmarking and corroborating the work effort estimate.
- Maintaining an effective risk / issue log to communicate any “blockers” which require management attention.
Many of these items appear to be common sense advice, but lack luster results are commonplace. Maintaining good controls is difficult. If it was easy, then every project would be successful and somehow all of the exceptions would be magically addressed.
In next week’s blog, I will explore the implications of point number 5 above – the misalignment of the estimating approach with the delivery methodology; that is, sizing the work effort which does not adequately reflect the work required to achieve the objectives of the initiative.
About the Author:
Mr. Mohit “Mo” Sahgal is the VP of Analytics of Paradigm Technology. He is an accomplished Senior Executive with decades of management consulting expertise. Mo has held various leadership positions including Senior Executive at Accenture, Partner at IBM, Partner at Capco, and Executive Director at Ernst & Young LLP.
Mr. Sahgal LinkedIn profile can be found here.
Paradigm Technology is a strategic consulting company serving the utilities, banking, airline, manufacturing, high-tech and retail marketplaces. We utilize innovative business and technology solutions to help clients enable their digital transformation programs, and improve their Analytics, Cloud, Master Data Management, and Project Leadership solution delivery. Paradigm is ready to support you in your business journey. For more information about Paradigm Technology, email firstname.lastname@example.org or visit us at www.pt-corp.com.