Performed properly, estimation is a quick judgment call conducted by confident, experienced staff, who are familiar with the expected technologies involved and the business needs associated with the request.
Initial estimates should be performed by a small number of people in a very short time frame. Refined estimates will generally require additional staff (usually the assigned project team) and a longer time frame.
Staff who perform estimating need to be confident, experienced individuals familiar with the application(s) to be modified; the technologies most likely to be used to address the solution; the requirements of the business; the intention behind generating an estimate; and the tools used to develop an estimate.
In order to reduce the number of people required to perform an estimate, staff capable of estimating more than one role within a project lifecycle should be selected. Doing so will reduce the impact to the overall IT organization by interrupting the work load of less people; should make scheduling meetings easier and most likely timelier as less staff are required; and should result in a shorter hourly duration for the delivery of an estimate.
If the staff selected is chosen from a senior-level pool of IT personnel, this can be accomplished without negatively affecting the quality of the estimate.
The Screening Estimate
The screening of a project idea is essential in establishing an efficient PPM practice. All new project requests get funneled through a single process which first applies an order of magnitude estimate to roughly size the amount of work and capital spending anticipated in completing the project. This “cost-sizing” estimate is initially used to determine which remaining PPM evaluation steps to use in assessing the project.
As I discussed before, not all project ideas should go through the entire PPM process. That process, by design, should only be for larger projects requiring review by the IT Investment Council, which is comprised of a company’s senior management.
If a project’s estimated cost-sizing falls below the threshold you’ve set for defining a large project, then that project should be managed by a specifically designed small projects process. For more insight into this topic refer to one of my previous articles Good Things Come in Small Packages.
The Business Case Estimate
The business case analysis (BCA) establishes sound business reasons for proceeding with an IT investment or project by providing insight into how the IT project supports the business needs and strategic goals of your company.
While the purpose of an IT project business case is to evaluate and potentially justify the IT investment from all relevant perspective, the heart of the business case analysis provides financial justification for an investment decision (see related article, Making the IT Project Business Case).