The company I work for is made up of many functional groups located around the world. The information technology group is responsible for providing a reliable and robust computer environment through which the company can run its global operations. The information technology group manages changes to the computer environment primarily through projects. Some of the projects are operational (upgrades to the network operating system), while other projects support the strategic initiatives of the business (providing the technology needed to open and support a new sales office). As part of the project approval process, the information technology group must estimate the time and cost needed to complete a project. Using project estimating techniques allows the information technology group to create time and cost estimates more accurately and more efficiently.
Phased Technique for Project Estimating
In 2004, the information technology group at my company decided to upgrade their network operating system from Window NT to Windows 2003. Windows NT had been in place for a number of years. In order to obtain approval for the project, the information technology group needed to provide accurate time and cost estimates as part of the business case. However, the project team had not performed a major operating system upgrade of this type in the past.
In order to generate accurate estimates, the team used a phase estimating approach. “Phase estimating is preferred by those working on projects where the final product is not known” (Gray and Larson, 2006). Initially the team worked with an outside consultant to divide the project into major phases. Next they identified the key deliverables associated with each phase. Once the key deliverables were identified, specialists within the team identified high-level tasks and generated time and cost estimates for each task within each project phase. This allowed the team to create estimates that were accurate enough to include in the business case and to obtain project approval.
Once the team obtained project approval, they worked with the consultant to drill into the detail of the first phase tasks. They further broke down the tasks into the sub-tasks needed to achieve the deliverable. As they completed the detailed task breakdown for the first phase, they updated the time and cost estimates and submitted them for approval before proceeding with executing the tasks.
As the project team finished a project phase, they worked on the detailed task creation and estimates for the next phase. They continued this process through project completion. Although the phased approach allowed the team to generate more accurate estimates for the project, the time that it took to create the estimates was lengthy.
Template Technique for Project Estimating
In 2006, the information technology group at my company was asked to provide the technology needed to support a new sales office located in the Chicago area. The project scope included all of technology needed to provide a network infrastructure, telecommunications, file and print serving, desktop and notebook computers, and all conference room multimedia capabilities. As part of the project approval process, the team needed to provide time and cost estimates. However, the project was on a fast track and the team needed to generate estimates quickly.
The team had recently completed a similar project in Atlanta, so they decided to use the template approach to generating estimates for the Chicago project. “If the project is similar to past projects, the costs from past projects can be used as a starting point for the new project. Differences in the new project can be noted and past times and costs adjusted to reflect these differences” (Gray and Larson, 2006). First, the team reviewed the project plan from Atlanta and removed any deliverables and tasks that were unique to that project. Next, they added the tasks that were unique to Chicago. Once they had a clear outline of the tasks, they turned their attention to cost estimates. Using analogous cost estimating, a technique of “using the actual cost of previous similar projects as the basis for estimating the cost of the current project,” (PMI, 2004) the project team leveraged the information from the Atlanta project as the basis for estimating the costs for the Chicago project. For the tasks that were unique to Chicago, they team used their own judgment to estimate the costs. Ultimately, the template approach allowed the project team to efficiently create estimates for the Chicago project.
A Combined Approach
Project estimating is an important part of project management. In order to obtain approval for most projects, teams must generate time and cost estimates. However, the estimating needs of many projects fall somewhere in between the project examples from my company, where part of the project is very similar to a previous project, but other areas are new to the project team. By combining project estimating techniques like the phased and template approaches, project teams are able to create time and cost estimates in a way that is more accurate and efficient.
Resources
Gray, C. and E. Larson (2006). Project Management: The Managerial Process, McGraw-Hill.
PMI (2004). A Guide To The Project Management Body of Knowledge: PMBOK Guide, The Project Management Institute.
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