How to choose the Project best Estimate?
Project estimates are much like how you get to work in the morning. It’s essential to pick an estimate that gives you a good chance of getting where you need to go when you need to get there. On some days, getting to work is easy.
If it’s going to take 30 minutes, it might. Most of the time, let’s say it takes 45 minutes to get ready. An accident could turn it into an hour. Your commute time should be long enough to get to work on time.
The same thing works for your project estimates, too. You may decide when to leave for work on your own. We’re going to look at a similar but more rigorous way to pick estimate values for your project. It would look like a Bell Curve if you graphed the probability of your commute times.
A Bell Curve Approach
At the top, your average drive time would be the top. A Bell Curve is also known as a normal distribution because it is a standard curve. When you give your customer an estimate, there are things about it that help you choose a safe one.
In the beginning, 50 percent of the possible values on a Bell Curve are less than the average, and 50 percent are more than the average. You have a 50-50 chance of getting results that are the same or less than your estimate if you use the average value instead of your estimate.
Then think about it. There is a good chance that you will both fail and be successful if you give your customer an average price. I wouldn’t risk my life with those odds. On the other hand, the worst-case estimate gives you the best chance of success, so don’t be afraid to use it. Because that number is so high, your customer might not want to finish the project.
Customers are likely to ask, “What’s the best thing that could happen?” “What if everything works out?” Avoid this trap. If you give the customer your best-case estimate, they might not be very happy with it. Six months? And you talk about how to finish the project in six months. What they’ll hear: The next six months are going to be filled with blah blah blah. You’ve also set your project up to fail. We’ve removed the best, worst, and most likely values from the list.
You’re probably wondering what number you should use when you make a rough guess. There is a value between what is average and what is worst. Bell Curve: Let’s go back to it and choose the middle point between average and worst-case. Without going into the math, that gives you an 85% chance of your results being less than or equal to that number.
That has a good chance of working out, and the value is easy to figure out, too. Plus, you can change your value to make it less likely that you’ll miss the deadline. As if you were going to a job interview, you would leave a little early to go.
If you’re trying to win a project, you might choose a value that isn’t as high. Even though there is a greater chance of failing. The most important thing to do is select the estimate that has a good chance of working. To practice, use the information in the exercise files to figure out how long it will take you to give the hospital’s COO a time frame.
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