Last month (see sidebar) I wrote that performing project estimates is a discipline required in a project portfolio management (PPM) practice. As I discussed, there are four distinct project estimates required as a project progresses though the project lifecycle.
The project phases and the associated estimates are follows:
Lastly, I indicated that the first two estimates, order of magnitude and budgetary, are owned and integrated into the PPM process, while the functional and implementation estimates are owned by PMO and project management practices.
This month, I want to go in-depth regarding the PPM-related estimates that occur during project screening and business case analysis activities. Specifically, who performs the estimates and how they are used.
These two estimates are the most critical to project success, despite the fact that they are easily the most inaccurate and high-level of the estimates produced. This may seem like a contradiction, but it is the cost estimates provided to your executives during the project screening and business case analysis phases that set the expectations and tone for the entire project.
Paralysis by Analysis
Moreover, while these up-front estimates are high-level and have the largest margin of error, they typically are the most difficult for IT personnel to calculate.
Most IT professionals are used to providing an estimate during the functional and technical design phases when there is significant detail about the solution. During these phases and estimates an IT estimator literally knows how many database tables, reports, online screens, and programs will be developed. They have a sense of comfort in their estimates because they have tangible and discrete items that they can count and individually evaluate.
In contrast, the screening and business case estimates are produced with a significantly different level of information.
During screening you typically have to produce a cost estimate for the entire solution and the only detail you have to work with is a two-paragraph description explaining the business objective trying to be accomplished. Because of this, the majority of your IT staff will not be able perform this level of project estimating because their need for detailed design information just does not exist.
I’ve discovered over the years that select individuals, who are comfortable executing in “grey areas,” with a unique combination of skills is required to produce such estimates. These individuals typically have hands-on software development experience in their backgrounds, but are naturally more capable in soft skill areas, such as communication, interpersonal relationship building, and business system analysis.