EVM3: Estimating and possibilities

 

Last evening, I was all lost in thoughts of proceeding my new project. This is not the first time I am handling a project, but there is a difference. Since I got my Project Management Certification, I always wanted to  handle a project which meets the international standards of project management. I thought of various procedures I have to choose from, since it’s the project manager and team that has to decide which suits a specific project.

I reached office early and started looking at the contract documents. It’s a cost plus contract.

We started our discussion with people talking about scope of the project.

From the Statement of work / BOQ, we created a WBS Dictionary (braking down high level definition of our project into actual pieces of work to be done to achieve that final result) and started doing bottom up estimation for each item / activity.

My team gave me ready answers with cost estimation for doing a WBS items. But I stopped them and asked “ so you think what ever is going to happen, the cost we arrived at is going to be same”

After a silence, every one looked with a slight smile on their faces which meant “no” to my question.

 

I said “so lets start working on realities. Lets consider risk factors, so in the worst case, what it is going to take, for each of the item that we attached cost”

Finance guy said “expenses are going to shoot up, may be a bit if not too much”

ME: “yes, so lets take it into consideration”

One of the team members quoted “ I think we are trying to be realistic, but we ended up being pessimistic”

 

I said, “no, we are not even close to the end” and I saw disappointment . I guess they wanted to finish this meeting soon.

I continued “so lets consider the best possibilities too, lets put the cost when circumstances are in our favor”

Now we have three columns 1. Worst case cost, 2. Usually what it costs 3.Best case cost.

One of the junior members in my team asked “ are we going to take the average of all three”

Well its not just his question, every one there is expecting to do the same.

ME; “yah that’s one way of doing it, but don’t you think that’s very crude way of doing it?”

He gave an “yes” gesture to my sentence.

I said, “lets do three point estimation, Lets go with formula”

Expected Cost = (Worst Case cost + 4 x Most likely Cost + Best case Cost ) / 6

My plant and Machinery head raised a point, “ I remember reading this formula and how to derive it from distributions etc etc, but that seemed too good to be useful in real life, how is it going give us that extra edge.. I would rather go with average, in our case that’s a three point estimate too”

Everyone started giving him affirmation.

I heard someone saying “ Lets take a break, its been 30 min of brain storming for bookish stats”

I should first convince my team why we should go with PERT than just average. Most Importantly I shouldn’t bore them with “bookish Statistics” as someone just mentioned.

I said “ ok lets catch a cup of coffee and come back in 10 min.”