When it comes to delivering a successful project, an accurate, workable estimation process is crucial.

In today’s blog, we’ll be:

• Breaking down the estimate process
• Sharing tips for building an accurate system customized to your specific business needs
• Walking you through the steps to attain the most accurate estimations

And yes, you can take our word for it. Our clients have called our method “One of the most accurate estimation processes they’ve ever worked with.”

What are Project Estimates?

Before we dive in, let’s take it from the top. What are estimates, and why do they play a key role in the planning phase of a project?

1. Duration: Estimates help us determine how long a project will last.
2. Resources: They help us sort the types of resources needed before getting started.
3. Timeboxing: Estimates help us timebox different phases within a project’s lifespan by combining resources, time (days/months), and budget required.

“Good estimates” are imperative to project success because they deliver a realistic view of the resources available from a high-level business perspective.

Additionally, a good estimate requires more than an approximation of cost to complete a project. It involves time, funds, people, materials, equipment, services, and contingency – such as inflation.

However, since estimates are ultimately approximations, they may never be 100% accurate, which is a challenge many technical teams face. Pulling the right requirements can help avoid unnecessary risk and save you time.

Why Do Project Estimates Change Over Time?

As we mentioned earlier, estimates are initially prepared before the start of a project, and a new estimation is done before the beginning of each iteration in an Agile project. These estimates are usually high-level, which is why they aren’t always accurate in the beginning and can evolve as the project progresses. Initial estimations are kept as a reference to track future estimation.

The challenge many teams face is that senior team members often take over the estimate process, defining most tasks without input from others on the team.

How to Estimate a Project

To avoid this situation, we deploy a simpler approach that ensures multiple team members contribute to the estimation process. Everyone gets a voice.

When everyone is involved in defining the tasks, we get a bigger and better perspective. This method might be more involved than just jumping on a call, but it offers far more accurate estimates and empowers our teams to speak up and own their work.

Here’s how we do it:

1. Pre-Meeting Preparation: Each team member involved with the project fills out a document corresponding to their tasks and projected estimates.

Example template:

• Task: High-level information as it’s still in the planning phase, but add as much detail as you can.
• Category: Type of task (e.g., Development, Management, Testing, QA, Infrastructure, Content, etc.)
• Min: Minimum time estimate.
• Max: Maximum time estimate.
• Avg: Average of Minimum and Maximum.
• Total: Sum of all Minimum, Maximum, and Average values.
• Avg Time: Total of Average values.
• Buffer: Usually 10-20% of the Average Time, depending on the project.
• Total: Sum of Average Time and Buffer.

Once team members finish filling it out, we meet to review individual projections, define priorities, and needs. This collaboration allows us to combine all inputs.

Benefits of This Process

• Team Building: Each team member has a voice in the estimation, fostering an inclusive environment and a safe space for juniors and intermediates to voice potential concerns.
• Precise Estimates: Individual projections are more honest and less influenced.
• Educational: Teams learn from the process and see what they might have missed, fostering continuous improvement.
• Higher Accuracy Rate: Continuous improvement leads to accuracy. We refine our process in later estimation rounds or future projects to strive for even more accuracy.

Has This Process Worked for Us?

The most recent result involved moving a client project to production much sooner than the client’s business team estimated/expected—a big win for everyone involved.

Time to Get Started

There is nothing incredibly complex about this, but it does take organization, time, and effort. It’s about how you implement your processes and handle changing demands and priorities that make an estimate accurate and successful. Don’t forget, the entire premise of building a precise estimation process is continuous improvement.

Proper upfront planning is key to delivering successful results. Estimations are crucial to project growth as they foster big-picture thinking and strategic planning.

Additional benefits include:

• Resource Allocation: Companies can better grasp their staffing/resource allocations.
• Revenue and Profit Understanding: Teams better understand revenue and profit streams.
• Risk Mitigation: It makes room to mitigate risk and discover potential gaps.

If you’re still not sure how to approach the estimation process, we can help.