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    Guesstimates to Estimates:

    What can we do to get it right?

    Presenter: Richard Vail, PMP

    Join the conversation about this web seminar on Twitter!

    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

    adjusted for resources.

    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

    task will take.

    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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