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Guesstimates to Estimates:

What can we do to get it right?

Presenter: Richard Vail, PMP

Follow @ASPE_SDLC and use hashtag #ASPEEVENTS

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Learning Objectivesfor this Web Seminar

Clarify the use of some specific termsrelated to estimating

Identify some useful tools for estimating

Explore some concepts of good

estimating

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Definition:

To form an approximate judgment or

opinion regarding the worth, amount,size, weight, etc.

Estimate (verb)

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Estimating

Concept True estimates are

based on

historical data.

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Estimating

Concept

All estimates should beexpressed as a range.

The range associated

with the estimatereflects ourconfidence level in the

estimate.

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Definition:

The degree to which a set of inherent

characteristics fulfills requirements.PMBOK Guide

Fitness for use

Quality (noun)

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Which is value is a more accuratemeasure of the temperature?

78.634519

or

77

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Definition:

The condition or quality of being true

or correct; Freedom from error ordefect.

Accuracy (noun)

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Definition:

The state or quality of being

strictly defined.

minutely exact

something with no variation

Precision (noun)

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Estimating

Concept When making estimateswe are not trying to be

precise but we aretrying to be accurate.

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Definition:

To arrive at or commit oneself to an

opinion about something without havingsufficient evidence to support theopinion.

Guess (verb)

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Definition:

An estimate without substantial

basis in facts or statistics.

Guesstimate (noun)

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Estimating

Concept A guess is a guessand should beacknowledged as

such.

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Different in different industries.

Used when only high level

information is available, detail levelshave not yet been defined.

PMBOK Guide, page 168 says:+ or 50%

ROM (Rough Order of Magnitude)

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ROM Estimates should only be usedto decide IF we want to take thenext step.

The next step being a more detailed estimate,which will require effort and expense on our part

to produce.

ROM (Rough Order of Magnitude)

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Definition:

A measurement of the size or

amount of work to be done.

Effort/Work Estimate

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Definition:

We might read on a set of plans to

build a home that there is an effortestimate of 600 hours of rough

carpentry work to build the house

described in this set of plans.

Effort/Work Estimate

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Definition:

An Effort or Work Estimate

Duration Estimate

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Definition:

Duration = Effort/Resources

Duration Estimate

If there are 600 hours of rough carpentrywork to build this house and we have two

qualified carpenters, we would expect the

duration estimate to be approximately 300hours.

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Definition:

Most reliable or complete: Based on

substantial historical data with thedata tightly correlated around themean of the data.

Definitive Estimate

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Definition:

An estimate with a very large

distribution in the range of valuesused to generate the estimate.

Probabilistic Estimate

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Probabilistic/DefinitiveEstimates

Large distribution in

the range of the

estimating data

Lots of closely

correlated data

Probabilistic

Estimates

Definitive

Estimates

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Techniques of Estimating

Analogous Estimates

Parametric Estimates

Delphi Estimates

Three Point Estimates Triangular

PERT

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Techniques of Estimating

Analogous Estimates

An estimating technique that uses the values of

parameters, such as scope, cost, budget and

duration or measures of scale such as size, weight

and complexity from a previous similar activity or

project as the basis for estimating the same

parameter or measure for a future activity or

project.

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Techniques of Estimating

Parametric Estimates

An estimating technique that uses a statistical

relationship between historical data and othervariables to calculate an estimate for activity

parameters, such as scope, cost, budget, and

duration.

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Techniques of Estimating

Delphi Estimates

An information gathering technique used as a

way to reach a consensus of experts on a subject.(Time estimates, Cost Estimates, Risk

Identification, etc.) The experts on the subject

participate in this technique anonymously.

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Delphi Estimates

John

SharonGeorge

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Delphi Estimates

John = \$ 38,000

Sharon = \$ 34,000

George = \$ 18,000

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Delphi Estimates

John = \$ 38,000

\$ 28,000

Sharon = \$ 34,000

\$ 29,000George = \$ 18,000

\$ 26,000

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Techniques of Estimating

Three Point Estimates

Two types:

1.Triangular - Three Point Estimates2.PERT - Three Point Estimates

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Techniques of EstimatingThree Point Estimates

Triangular Estimates

Ce = CL + CM +CH

3

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Techniques of EstimatingThree Point Estimates

Tp - To6

Standard Deviation Formula

35

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35

Value to seven decimals Rounded

1 68.2689492 % 68 %

2 95.4499736 % 95 %

3 99.7300204 % 99 %

4 99.993666 %

5 99.999942 %

6 99.999999 % Six Sigma

Standard Deviation ( ) = A measure of dispersionaround some central point. Usually the MEAN.

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Normal DistributionNormal Curve

X-3s -2s -1s +1s +2s +3s

Techniques of Estimating

Mean = 50/50

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Normal DistributionNormal Curve

X-3s -2s -1s +1s +2s +3s

68%

Techniques of Estimating

Mean = 50/50

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Normal DistributionNormal Curve

X-3s -2s -1s +1s +2s +3s

68%

95%

99%

Techniques of Estimating

Mean = 50/50

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Techniques of EstimatingThree Point Estimates (application)

Lets say that we are trying to estimatethe length (in days) that we think a specific

We consult with the individual that is expected todo the work as well as some other individuals that

have done similar tasks in the past.

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Techniques of EstimatingThree Point Estimates (application)

There seems to be a general consensus that themost likely number of days that it would take would

be 22 days.

An optimistic estimate would

be16

days, and a reasonablepessimistic estimate would be34 days.

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Techniques of EstimatingThree Point Estimates (application)

Te = 16 + (4 *Tml) +Tp

6

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Techniques of EstimatingThree Point Estimates (application)

Te = 16 + (88) + 34

6

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Techniques of EstimatingThree Point Estimates (application)

Te = 138

6

= 23 days

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Techniques of EstimatingThree Point Estimates (application)

Standard

Deviation =34 - 16

6

= 3 days

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Techniques of EstimatingThree Point Estimates (application)

Standard Deviation = 3 days

PERT Estimate = 23 days

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Normal DistributionNormal Curve

X-3s -2s -1s +1s +2s +3s

Techniques of Estimating

Mean = 23 days

50/50

Chance

One Standard Deviation= 3 days

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Normal DistributionNormal Curve

X-3s -2s -1s +1s +2s +3s

Techniques of Estimating

Mean = 23 days

+ 3 days = 26 days- 3 days = 20 days

One Standard Deviation= 3 days

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Normal DistributionNormal Curve

X-3s -2s -1s +1s +2s +3s

68%

Techniques of Estimating

Mean = 23 days

+ 3 days = 26 days- 3 days = 20 days

16/84 84/16

One Standard Deviation= 3 days

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Normal DistributionNormal Curve

X-3s -2s -1s +1s +2s +3s

Techniques of Estimating

Mean = 23 days

- 6 days = 17 days + 6 days = 29 days

One Standard Deviation

= 3 days

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Normal DistributionNormal Curve

X-3s -2s -1s +1s +2s +3s

95%

Techniques of Estimating

Mean = 23 days

- 6 days = 17 days + 6 days = 29 days

2/98 98/2

One Standard Deviation

= 3 days

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Techniques of EstimatingThree Point Estimates (application)

Lets consider two sets of PERT estimates

Set 1:

Optimistic Estimate = 16 days

Most likely Estimate = 22 daysPessimistic Estimate = 34 days

Optimistic Estimate = 10 days

Most likely Estimate = 22 daysPessimistic Estimate = 40 days

Set 2:

PERT Estimate = 23 days

Standard Deviation = 3 days

PERT Estimate = 23 days

Standard Deviation = 5 days

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Techniques of EstimatingThree Point Estimates (application)

The standard deviation also serves as an

expression of our confidence level in theestimates.

An estimate of 22 days with a standarddeviation of 3 days provides us with a

reasonably limited range of expectation for this

estimate. In other words, we are prettyconfident in this estimate.

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Techniques of EstimatingThree Point Estimates (application)

HOWEVER !

An estimate of 23 days with a standarddeviation of 5 days is an estimate that weare much less certain about.

i h

The VALUE of the estimates

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Quality of Historical Data

Quantity

ofHistorical

Data

Low

Low High

HighLimited Range

Estimates

Wide Range

Estimates

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Estimating ConceptDempsters

Triangle

SCOPE

TIME COST

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Estimating

Concept

Dempsters Triangle

You must estimate

scope first, thentime, and ONLY

then can you

estimate costs.

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Estimating

Concept There are no factsabout the future,

there are onlyestimates.

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Estimating

Concept Documentation(lessons learned) can

provide greatinsight to assistus in becoming

good estimators.

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Rough Order of Magnitude

Is a TYPE of estimate

Delphi Technique

Parametric Model

Analogous

Three Point EstimatesAre TECHNIQUES of estimating

What we have discussed

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What we have discussedin this Web Seminar

Clarify the use of some specific terms

Work with some estimating tools

Explore some concepts of good

estimating

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Questions?

If you have questions for Richard, please submit them in the

Q&A function at the bottom right hand side of your screen.

If we do not get to your question, they will be answered byRichard and posted to the ASPE-SDLC blog. You will

receive a link to that blog post in the next few days, along

with a copy of todays slides and a link to the recording of

todays seminar.

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