CHAPTER 6
IMPROVE ESTIMATING PROCESS
This chapter covers the final stage of the project estimating life cycle. The objective of the Improve Estimating Process stage is to take actual data and lessons learned and complete the cycle by incorporating them back into the estimating processes and tools.
This chapter includes the following sections:
6.1 Introduction
The purpose of the Improve Estimating Process stage is to improve the estimating process for the current project, future projects, and the organization's estimating process. This is an important step because it incorporates lessons learned and empirical data to calibrate the models and processes, and results in more accurate estimates.
Improvement can be made at any point in the project life cycle by collecting data, changing processes, and changing templates or tools.
Figure 6-1 shows the inputs and outputs of Improve Estimating Process stage which is described in this chapter.
Spending the appropriate amount of time improving the estimating process may affect other project management processes, tools and techniques, lessons learned, and organizational process assets.
6.2 Inputs
In order to improve the project estimating process, the project manager needs to gather the relevant information.
6.2.1 Project Information
Project information is used to characterize the project to benefit future projects for understanding and comparison. This can include the following:
- High-level scope,
- Risk register, and
- Project characteristics (type, technology, methods, etc.).
6.2.2 Project Estimating Approach
This information includes the project estimating approach for the project including:
- Scope of estimate,
- Confidence ranges,
- Constraints and assumptions,
- Estimating technique [model],
- Resources and skills,
- Environment to support estimating integrity
- Reforecasting points,
- Improvement process, and
- Contingency reserves.
6.2.3 Historical Project Information
The historical information on similar projects that have been completed, which includes:
- WBS,
- Project schedule,
- Project cost,
- Resource usage, and
- Project documentation.
6.2.4 Baseline Estimates
A baseline estimate is the first deliberate, detailed estimate of the resources, cost, and schedule. It is normally required for high-level decision making. This estimate is performed early in the project and serves as the basis for which subsequent estimates are measured against.
6.2.5 Updated Estimates/Forecasts
Updated estimates/forecasts are estimates that have been made subsequent to the baseline.
6.2.6 Change Log
The change log is a document that contains all of the requested changes to the project requirements with related information such as status and impacts to project time, cost, and resources.
6.2.7 Actual Versus Estimate Data
Actual versus estimate data include the labor hours, material costs, and other costs expended on a project through a specific period of time.
6.2.8 Stakeholder Feedback
Stakeholder feedback about the project estimates, assumptions, actual data, or variances may lead to corrective and preventative actions.
6.2.9 Organizational Process Assets
Organizational process assets are the established measure, model, definition, or criterion against which the estimating process is measured. Organizational process assets include items such as policies, schedule templates, project document templates, tools, and training materials.
6.3 Activities
The following are activities used in the Improve Estimating Process stage:
6.3.1 Gather Estimating Information
This activity includes gathering all information necessary for analysis of the estimates.
6.3.2 Assess Estimating Process
This step determines whether the estimating process performs and adheres to a set of parameters. It will examine the deliverables, the estimating process steps, the people and skills utilized to formulate the estimate, along with the tools and techniques used. For each stage in the estimating life cycle, a set of questions should be asked. A sample set of questions is provided in Figure 6-2.
6.3.3 Determine Root Causes and Lessons Learned
This step uses the output of the “assess estimating process” step (see 6.3.2) to utilize problem-solving work sessions for determining the root cause of any problems that occurred in the estimating process. Root causes can be identified by using techniques such as brainstorming or using such tools as the fishbone diagram (Ishikawa). Lessons learned should be documented for inclusion in the “develop action plan for changes” step (see 6.3.4).
6.3.4 Develop Action Plan for Changes
This step uses the output of the “determine root causes and lessons learned: step (see 6.3.3). An action plan should be developed to remedy the problems found in the estimating process or associated processes for the current project, future projects, or the estimating process.
6.3.5 Implement Changes and Share Lessons Learned
This step uses the output of the “develop action plan for changes” step (see 6.3.4). The steps in the action plan are executed and lessons learned are shared.
6.4 Outputs
Upon completion of improving the estimating process, there are key outputs as follows:
6.4.1 Updated Tools and Techniques
Updates to any tools or techniques that were used in the estimating process can include the following:
- Historical information used as an example for analogous estimating,
- Calibrated parametric models based on actual data from the project, and
- Updated templates and other documentation.
6.4.2 Updated Organizational Process Assets
Updates to organizational process assets can include the following:
- Update to any document that defines the standard for estimating or affects the estimating process,
- Updated estimating approach document, and
- Documented lessons learned for use in future projects.
6.5 Considerations
6.5.1 Spend the Appropriate Time
The project manager should be diligent to take the time to complete this step because of the enormous impact on the current project, future projects, and the overall estimating process for the organization. The project estimate should include the time and cost to improve the estimate.
6.5.2 Consider the Skill Set
It is important to note that the skill set to facilitate problem-solving sessions for determining the root causes may require resources that are not assigned to the current project. These resources should have facilitation skills as well as problem-solving skills. It is usually deemed wise to have an external resource to conduct these sessions so as not to bias the outcome.
6.6 Summary
The Improve Estimating Process is an iterative stage that encompasses the entire project estimating life cycle. It occurs during all of the project management processes within the Initiating, Planning, Executing, Monitoring and Controlling, and Closing Process Groups. It receives inputs or produces outputs for most of the Project Management Knowledge Areas: Project Integration Management, Project Scope Management, Project Time Management, Project Cost Management, Project Quality Management, Project Human Resource Management, Project Communications Management, Project Risk Management, and Project Procurement Management.
The environment of the organization needs to be open to capturing lessons learned to ensure that they are incorporated into the tools, techniques, and the organizational process assets that affect the estimating process.