The Planning Game to overcome the risks of estimation of the effort and costs of a project

effort and costs

Estimating the effort and costs of a project is, for some project managers, one of the most difficult aspects of project management.

To prepare an accurate and complete project plan, it will be necessary, in fact, to estimate many factors. How much time it will take to accomplish the work, how much it costs, how much money the project will save or earn, the extent of the risk and a multitude of other aspects.

Estimation is the approximate determination of the size, extent, value, cost or nature of something.

As many project managers will say, the key word in this definition is “approximate”.

The core of project management is thus, even with significant prior experience, the uncertainty inherent in any project. This simply does not allow for absolute accuracy in estimates.

Estimation methods for project effort and costs

It is unnecessary to discuss again the differences between effort and duration of which we have discussed in depth in this article Let’s stick to the concept that estimation is essentially a hypothesis, and let’s see what can be done to make it the best possible scenario.

Here are five methods to achieve the most realistic possible estimates:

  • Ask the person in charge of carrying out the work to prepare the estimate.
  • Ask an expert or a person with experience in that particular area to give their opinion.
  • Use existing data – perhaps from similar past projects – and make appropriate changes (lessons learned).
  • Use tests, field studies or other simulated experiences as a guide.

All these approaches are definitely worthwhile and, depending on the occasion, some will work better than others.

The best approach will depend on factors such as the availability of historical data, the estimation capabilities of the performers or experts in the field and the amount of time available to prepare an estimate.

Estimates should represent what the project manager believes is the most likely outcome and therefore should not be worried about applying their judgement to the input they receive, as long as they have a reason to do so.
effort and costs of a project

Estimate dangers

Estimation is certainly a difficult process and there are many factors that can undermine the accuracy or validity of a project’s effort or cost estimates.

Among the most common dangers are the following:

  • Badly defined workplace: this may occur when the work is not sufficiently divided or the individual elements of work are misinterpreted.
  • Omissions: in a nutshell, something has been left behind..
  • Excessive optimism: in this case, a successful scenario is used as the basis for the estimate and the worst case is not even considered..
  • Padding: This happens when the estimator includes a safety factor in the estimate, a kind of padding that ensures that the estimate is met or not exceeded.
  • Lack of risk and uncertainty
  • Rushed estimates: if estimates are rushed to meet a deadline which is too tight, they are almost likely to be unrealistic..
  • The executor and the estimator both have two different levels of skill: people work at different levels of efficiency and sometimes have a significant impact on the time and cost of an activity. For this reason it is necessary to make an estimate considering who will actually do the work..
  • External pressure: Many project managers are assigned specific – and sometimes unrealistic – project effort and cost objectives. If a project manager finds himself in this situation, they should communicate what they think is within reasonable reach.
  • Failure to involve the executors of the activity: an estimate developed without involving the executors of that activity could be inaccurate because it is based on erroneous conceptions. This is why a direct comparison between the estimator and the executor is always important.

 Planning Game: an estimation method

In addition to the traditional methods to estimate the effort and costs of a project, another one exists, mainly used by the Agile teams: the Planning Game.

The purpose of using this method is to avoid the influence of other participants.

The Planning Game should force people to think independently and propose their estimate numbers at the same time, without input and influence from other participants.

Let’s see how a planning game normally takes place. Each participant has a series of cards with an estimated value (the values can be those, even approximate, of the Fibonacci sequence).

The individual activities to be carried out will then be taken into account. Each team member considers all the factors of the project activity and selects a card that they will place face down on the table. Once all participants have made their move, the cards are turned.

It is not possible to select two cards for the same activity.

Then, the participants will review the assessments made and discuss together the reasons for their choices.

Each participant, in this way, will think independently and how much effort the team will spend to complete the activity in question.

Once the discussion is over, the evaluation will be repeated until all the participants give the activity the same value. Then, this value will be written on the Activity in question and the process will be repeated for the next Project Activity, and so on until the end.

For each activity, the highest and lowest values attributed will be crucial. It is not necessarily the case that those who have given such assessments are wrong, but it may be possible that these team members may have valuable information or knowledge for a more realistic estimate.

This way, at the end of the Planning Game, a shared estimate of each individual project activity will be made. In this way, no team member and no external stakeholders can blame anyone for incorrect estimates.

The Planning Game is sometimes also called Planning Poker or Scrum Poker, and is a derivation of the Delphi Method, a group decision-making technique in which participants give their estimate to a facilitator who is responsible for providing an anonymous summary of the expert evaluations along with an explanation.

The Planning Game to overcome the risks of estimating the effort: conclusions

Ultimately, the most adequate effort and cost estimation technique for each individual project depends on the experience of the project manager, their preference and the parameters available in each situation.

In addition, there are now project management software programs that use statistics to help project managers calculate contingencies to deal with risks, uncertainties, and unknowns relatively smoothly.

Although there are some minor differences, the basic concept is the same in all tools: to provide a set of possible results for the individual work elements of each project. Have you ever tried the TwProject statistics for free? If you haven’t yet, enjoy the 15-day free trial now.

Estimation with Twproject is easier

One try is worth a million words.

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