How can you estimate the time and cost of your projects?

Estimation of time vs cost of project depends on the operation culture of the organization, the managers may fascinate a holistic view of estimation or detailed view of it. Which ever that is adopted between the two, they come with merit and demerits. It is important that uncertainties are considered in estimation. Invest in researching the global trend of factors that may affect your estimate such as prices of commodities, resources and so on. This sudden surge in price can impact your project, be updated on potential change factors so as not to under-estimate.

Project estimation involves top-down and bottom-up estimating for holistic or detailed perspectives, respectively. Analogous estimating leverages data from past projects, while parametric estimating uses statistical models. The critical path method determines the shortest project duration, while the critical chain method includes resource availability. Engage stakeholders for insights, anticipate risks, use iterative estimating for continuous refinement, and employ project management software for automation. Learn and adjust from each project, balancing scientific and artistic judgment. Have a Productive Sunday Afternoon & Stay Safe!

1️⃣ Top-Down: Start with a high-level estimate based on project scope, goals, and assumptions. Break it down into smaller components. 📈⏫ ✅ Advantages: Quick, simple, and provides an early estimate for decision-making. ❌ Disadvantages: Less accurate and may overlook critical details. 2️⃣ Bottom-Up: Start with detailed estimates of each task, activity, or deliverable. Aggregate them for the total project estimate. 🔍📊 ✅ Advantages: More accurate, captures nuances, and accounts for specific requirements. ❌ Disadvantages: Time-consuming and requires extensive information. 🔑 Considerations: Complexity, uncertainty, and availability of information impact your choice. Balance time, accuracy, and project requirements. 💡🔒

In my experience, estimating project time and cost in facility management should also involve considering the potential for unforeseen disruptions and delays. These can include factors such as extreme weather events, supply chain disruptions, or unexpected equipment failures. By incorporating contingency plans and risk assessments into your estimates, you can better prepare for and mitigate the impact of unexpected challenges, ensuring smoother project execution.

The best way to estimate time of the project is to give target output per day/week/month. Allocate resources as per target and consider efficiency of work at different phases of the project. You will come down to control these productivity rates. If you cannot manage these productivity rates then refine your target time and recalculate project timeline. For example if I have construction project of 17,000 M3 concrete then I will take 250m3 as achievable weekly target and allocate resources based on this production. My job will be giving monthly planned work to achieve 1000m3 quality. These work should be micro managed daily basis to control timeline for the project.

1️⃣ Analogous Technique: Use historical data from similar projects to estimate time and cost. 🕰️💰 ✅ Advantages: Quick, based on real-life experience, and suitable for low-complexity projects. ❌ Disadvantages: Less accurate if projects differ significantly. 2️⃣ Parametric Technique: Use mathematical models or formulas based on specific variables or parameters. 📊🔢 ✅ Advantages: Allows for customization, is suitable for complex projects, and provides detailed estimates. ❌ Disadvantages: Relies on accurate data and may be complex to develop. 🔑 Considerations: Complexity and similarity of projects impact the choice. Assess data availability, reliability, and project characteristics.

In my experience, when estimating project time and cost, two primary methods are Analogous Estimation and Parametric Estimation. Analogous Estimation, or top-down estimation, relies on historical data from similar projects, adjusting for differences to derive estimates quickly. On the other hand, Parametric Estimation, or bottom-up estimation, uses mathematical models based on specific project parameters for a more detailed and accurate approach. Personally, I find that I trust Parametric Estimation more, especially when detailed project information is available and the project has distinct variables influencing outcomes. The use of mathematical models allows for a systematic and refined estimate for the project planning process.

In navigating project estimations, I've found that the choice between analogous or parametric techniques hinges greatly on the available information and project characteristics. Analogous estimation, drawing on past project similarities, proves invaluable when historical data is scant or when project scopes echo previous endeavors. Conversely, parametric estimation, rooted in mathematical models and project parameters, shines in scenarios involving repetitive tasks with well-defined variables. By discerningly applying these techniques, organizations can refine estimations to match project needs, thus enhancing resource allocation efficiency and fortifying overall project success.

Analogous and parametric are methods to estimate based on existing data. Analogous uses past projects to estimate current ones while parametric uses statistical data. Use analogous when you have completed similar projects before. Use parametric when you have access to reliable data & need precise estimates. Analogous is like using your previous home renovation costs to estimate a new one. Parametric is like using cost per square foot from a database to estimate the same renovation. For an SME in the manufacturing sector, we used an analogous method by comparing costs from a similar project completed last year. For a precise estimate on material costs, we used parametric, calculating the costs based on the standard rates per unit.

1️⃣ Three-Point Technique: Use optimistic, pessimistic, and most likely estimates for each task. 🌈📉📈 ✅ Advantages: Accounts for variability and uncertainty, provides a more realistic estimate, and allows for risk assessment. ❌ Disadvantages: More time-consuming and requires data and expertise to determine three estimates. 2️⃣ Single-Point Technique: Use a single estimate for each task based on judgment or experience. 🎯 ✅ Advantages: Simpler and quicker, suitable for projects with less uncertainty, and straightforward calculations. ❌ Disadvantages: Ignores variability and can be overly optimistic or pessimistic. 📝 Considerations: Assess the level of uncertainty, available data, project complexity, and risk tolerance.

When using three-point we have to be sure that the complexity will not hinder both the planning or the monitoring processes. Example in engineering project, a lot of options is good, but too much options will be inefficient.

Estimating project time and cost can be approached using either single-point or three-point estimation methods. Single-point estimation relies on a single figure for time or cost, which may be based on historical data or expert judgment. This method is quick but lacks accuracy. On the other hand, three-point estimation considers optimistic, pessimistic, and most likely scenarios for each task. Using techniques like PERT (Program Evaluation and Review Technique), it calculates a weighted average, providing a more nuanced and probabilistic estimate. While more time-consuming, it offers better insight into potential risks and uncertainties, enhancing project planning and decision-making.

In my experience, when estimating project time and cost, Single-Point Estimation is quick but less nuanced, relying on a single value. However, my preference lies with Three-Point Estimation, considering optimistic, pessimistic, and most likely scenarios. This method, providing a more comprehensive and realistic approach, not only accounts for uncertainties but also aids effective risk management by offering a range of potential outcomes. The decision between the two techniques depends on factors such as project complexity and time constraints, but I often lean towards Three-Point Estimation for its ability to handle uncertainties and provide a more insightful view of project expectations.

Estimating the time and cost of projects requires considering various factors beyond the methods mentioned, such as assessing resource availability and constraints, conducting thorough risk analysis, involving key stakeholders, leveraging historical data and lessons learned, monitoring external factors, and implementing contingency planning. By incorporating these considerations, project managers can develop more accurate estimates that account for potential challenges and uncertainties, ultimately increasing the likelihood of successful project delivery within the established timelines and budget constraints.

1️⃣ Critical Path Technique: Focus on the longest sequence of dependent tasks, determining project duration. ⏳ ✅ Advantages: Identifies critical tasks, minimizes project duration, and helps manage resources effectively. ❌ Disadvantages: May neglect resource constraints and lacks flexibility for unforeseen changes. 2️⃣ Critical Chain Technique: Consider both task dependencies and resource availability. 🔄💪 ✅ Advantages: Accounts for resource constraints, adds flexibility to handle uncertainties, and prevents bottlenecks. ❌ Disadvantages: Complex implementation requires careful resource planning and management.

Critical chain is more than a tool or method in Project Management. ➡️ It is a shift in management philosophy based by TOC principles. ➡️ It is a shift from cost center efficiency to throughput efficiency. ➡️ It calls for lean principles and modern agile principles to some extent. ➡️ It calls for a major shift from traditional measures of people performance. ➡️ It requires change from traditional project progress measures to buffer management. E.Goldratt has spoken with immense detail and research data on CCPM. I feel that it has great potential in the ecosystem of complex projects and I look forward to see more discussions on CCPM in the PM community.

Estimating time and cost in project management involves two key methodologies: Critical Path Method (CPM) and Critical Chain Method. CPM identifies tasks with the longest durations and calculates project duration based on dependencies. Costs are estimated considering resource requirements along the critical path. In contrast, Critical Chain focuses on resource constraints, estimating time based on resource availability and adding buffers for uncertainties. It emphasizes efficient resource utilization and overall project-level buffers. CPM may be less flexible in handling constraints, while Critical Chain offers more adaptability and risk mitigation through resource-centric planning.

I've learned that the decision between a critical path or critical chain technique hinges on resource availability and project complexity. The critical path method, by identifying the longest sequence of dependent tasks, sheds light on project duration and potential delays. Conversely, the critical chain technique strategically buffers tasks to safeguard against uncertainties, prioritizing resource allocation and optimizing project flow. Through this experience, I've come to appreciate the importance of considering resource constraints and risk mitigation strategies when selecting the appropriate technique, as it ensures efficient project planning and execution, ultimately leading to project success.

Critical path and critical chain are scheduling methods. Critical path focuses on the sequence of crucial tasks. Critical chain adds resource constraints to the critical path. Use critical path when time management is key. Use critical chain when resources (like staff or equipment) are limited. Critical path is like planning a road trip, focusing on the key stops you must make. Critical chain is like planning the same trip but considering the availability of your car or fuel stops. For a construction project, we identified the critical path to ensure the main stages (foundation, structure, roofing) were on track. We then used critical chain to manage the availability of cranes and skilled labor, ensuring no delays.

Focus on overall estimation process/skills, not just techniques. Invest time upfront clearly defining scope and requirements. Iterate estimates as new info emerges. Treat estimating as a capability - learn from history, evolve models, share practices across teams. Reflect on lessons learned to improve continuously.

We leverage real data from previous projects over the 20 years our agency has been running to estimate the real time a similar scope will take. Breaking down a top-level requirement e.g. integrating a 3rd party system into the steps involved and who will be doing the work is also key. My top tip when it comes to estimating? Make sure the client is fully aware of what your estimate encompasses - the breakdown of the cost, and get this in writing in a contract - remove assumptions and ensure that your agreement is in black and white.

To estimate time and cost for projects from a project management perspective: 1. Break down tasks into smaller, manageable components to accurately assess time and resource requirements. 2. Utilize historical data and past project experiences to inform estimates and identify potential challenges. 3. Consider resource availability, including personnel, equipment, and materials, when determining project timelines and costs. 4. Account for risk factors and uncertainties by including contingency reserves in estimates to mitigate potential delays or cost overruns. 5. Continuously update and refine estimates throughout the project lifecycle as more information becomes available and project scope evolves.

To estimate the time and cost of our projects, we first turn to historical data and analyze past projects as a point of reference. Then, decompose the project into smaller, more manageable tasks. Resource allocation is critical; identify the required resources and their associated costs. Additionally, it's imperative to calculate time variations based on optimistic, most likely, and pessimistic scenarios. Risk assessment is another crucial step to account for uncertainties and the potential cost implications they might have. Lastly, always try to incorporate insights from other members of the team and leading experts. By combining all these methodologies, you can ensure accuracy and transparency in project estimates.

Estimating project time and cost involves defining a clear scope, breaking tasks down, using historical data and expert input, analyzing risks, considering resource availability and dependencies, employing project management tools, and maintaining open communication. Factor in benchmarks, quality standards, and allocate contingency reserves for unforeseen events. Regularly update estimates and document assumptions. Post-project, review and learn for continuous improvement. This systematic approach ensures more accurate estimates, aiding effective project management and successful outcomes.