Estimation Tools and Techniques in Project management

which two methods of project analysis are the most biased towards short-term projects? This is a topic that many people are looking for. is a channel providing useful information about learning, life, digital marketing and online courses …. it will help you have an overview and solid multi-faceted knowledge . Today, would like to introduce to you Estimation Tools and Techniques in Project management. Following along are instructions in the video below:

“The last section. We talked about what fraud was how do companies prevent fraud. The the primary way that fraud and errors are prevented detected or corrected is through a of internal control. What is internal control.

Internal control is a plan of organization and a system of procedures implemented by management. So if you re asked to questioned. Who is responsible for establishing a system of internal control. The answer is management its management s responsibility to make sure that their system of internal controls in place for their organization.

A system of internal controls are designed to accomplish five objectives first is to safeguard assets. The company must protect its assets against waste inefficiency and fraud and if they fail to do that companies will incur losses. The second objective is to encourage employees to follow policy to make sure everybody in the organization including managers follow policy they need to make sure that a system provides clear policies and guidelines that result in fair treatment to both customers as well as employees and the reason. We make sure that they followed policy is to make sure that everybody is working towards the same goals which argue the goals of your corporation.

The third objective is to promote operational efficiency again this is to make sure that there s no waste and whatever profits you make are maximized the fourth objective is to ensure accurate reliable records without reliable records your profitability is not accurate so we want to make sure that we have reliable records to measure our performance and the fifth one is to comply with legal requirements. Companies are subject to a lot of laws suggest. The sec has laws saying if you re a publicly traded company you need to prepare financial statements quarterly and annually. Irs says that you need to pay in come taxes on your income there are other lawsuits osha laws.

That says if you have employees working for your company you need to make sure that they have safe comfortable work environment. We need an internal control system in place to make sure that companies and employees. Comply with the law and avoid legal problems as a result. This is also important objective of internal control.

How important are internal controls. They re so important that the us congress passed a law back in 2002 to require public companies to have a system of internal controls. Not only are they required to maintain the system of internal controls their external auditors are required to look at those controls and issue report to state that they are reliable. Some of you may be familiar with this act it is called sarbanes oxley act again this is federal law and it requires public companies to have a system for internal controls and the auditors to examine them and issue a report on reliability there are other provisions of the sarbanes oxley act however at this point you don t need to application that we re discussing on the domain.

Where this lesson. They should have exercised the scale of estimation in the past on the activities that we re discussing ep experts are having proper credibility that means people should have high respect and credibility tools. The experts then this expert judgment works best in estimating activity duration or activity cost the next tool. At hand is analog of information can allow this in dictionary means similar or comparable.

That means you need to take similar in fact activity from the past where we have handled such complexity and then we tend to estimate the activity duration or cost at hand thus we need to take similar in fact activities. But not in appearance next each college top down approach because it follows top down approach. It is less costly and less time consuming and also less i it is applicable when less information is available for us. It is more reliable only when we take reference project or reference activities and if those different activities or project from the previous history.

If that matches to the current project then in a lot of estimation we provide reasonable degree of confidence for the current history asian process. But mostly it is less accurate and less costly and less than jimmy. The next estimation technique. We have at hand is parametric estimation in parametric estimation.

We use algorithm to chemically duration or cost based on historical data. And cost parameters. The equation is duration or cost is equal to number of units multiplied by the unit rate. The number of units can be number of square footage number of lines of course number of useless points number of function points.

Likewise. The unit rate is derived from historical data. The unit rate expressed in cost multiplied by the number of units will give you the estimated cost unit rate expressed in person base multiplied by the number of units will give you the estimation duration in person days. Now you should take the parametric estimation to estimate the duration to complete a software project.

It is number of function points into the number of labor hours required to complete a function point part of work that means here in this particular model. We have taken function points as units so number of function points in the software project multiply the amount of time it takes to complete the function point..

So each function point takes this make these many powers multiplied by number of function points will give you the estimated duration in. Hours similarly the estimated cost in us. Dollars. Required to complete a construction project is equal to number of square foot multiplied by cost per square foot cost.

So. The cost per square foot for example. If we say 100 it pays to complete a square foot multiplied by the number of square foots in a building gives you the estimated cost to complete a building. This is how we can estimate duration or cost at the project level.

We can apply this parametric estimation either at the total project level. All segments of project level or at the activity level this activity of parametric estimation provides high levels of accuracy depending upon the accuracy builds in measuring the number of units and in determining the unit rate from previous project. The next estimation technique. We have at hand is three point estimation in this estimation technique.

We use three estimate measures that means if we have to reach 800 by car how much time it takes we will say most likely to our states in optimistic scenario. Where there is a good road condition good weather. Condition and my car is good. I may take one hour under pessimistic conditions.

Where heavy traffic is there you know heavy bad weather. And wrote terrible road conditions. Then lesson argued it may take three hours so this has my experience that s how highest made now you can ask me for each activity. If you come up with most likely optimistic and pessimistic.

What is that overall estimate. I can take to answer that question we have two distributions one is beta distribution. Which is more likely and more applicable number of times and the other is trying the distribution under beta distribution. It is used that hundred times should travel sixteen point six seven percent times.

You reach airport under optimistic way and under essence. Degree and out of hundred times. You travel. Sixty six point six seven times.

You reach airport under most likely estimate way. This is how it consumes that s why sixteen. Point six seven percent is. 1 by 6.

6667. Is four basics again this is one vessels. So these mate edges are attached to optimistic. Most likely and pessimistic.

So duration is equal to 1. By 6 into optimistic plus. 4. By 6 into.

Most likely plus. 1. By 6 into pessimistic. So.

Thus. It comes to duration is equal to o plus 4 m..

Plus. 3. By. 6.

Similarly. The same formula can be applied to the cost. Also cost is equal to o plus 4. M.

Plus p. By. 6. Only chain is this optimistic.

Most likely and pessimistic measures or expressing cost when it comes to cost these are expressed in person days hours when it comes to generation so coming to our example duration to reach a poor is equal to optimistic one our most likely two of us multiplied before 3 pessimistic divided by 6. Which comes to two of us. So somebody asks how much time it takes you to reach a poor is say to us and it includes the consideration of optimistic most likely and business day. Now.

If somebody assumes or observes traveler distribution that means the past history data shows that of three times. You travel to yale for one time you reach in optimistic way one time in most likely way and one time in pessimistic way we attach one by three. Factor which is 3333 factor to optimistic one by three factor. Two most likely one by three factor to pessimistic.

So duration is equal to 1. By 3 into mu plus. 1. By 3 into mu strictly plus.

1. By 3 into pessimistic. So tradition is equal to o plus m. Plus p.

By. 3. Similarly. If it is cost cost is equal to o plus m.

Plus. P. By 3. Now coming to our example.

The optimistic estimate in which they import from home is one hour. Most likely is two hours. Pessimistic is three hours. So oh plus m.

Plus p. By. 3. Which is equal to 1 plus.

2. Plus..

3. By 3. Which comes to 2 hours so using three point estimation. We consider optimistic most likely and pessimistic they d by a range this may prove our estimation accuracy using beta distribution.

Which is more likely or triangular distribution. We calculate overall duration or cost in a scenario. Where it is difficult to estimate using any of the above thickness. We resort to bottom of estimation paper in bottom up.

Estimation technique. What we do is we divide scope objectives into milestones and the milestones are further divided into set of activities and the activities are further divided into tasks now we do what a map estimation here that means we estimate task wise duration or cost and we aggregate them to an activity level that means task 1 task to task. 3. The amount of time or cost required to complete task 1 task to task.

3. When we sum it up it comes the duration or cost estimate for the activity. Similarly task. 4.

And task. 5 estimates. If you sum it up take brings you the activity to estimate in duration or cost. Now by aggregating or by setting up the generation or cost estimates for actively one and a22 brings you the milestone.

One estimates for generation and cost likewise. We calculate milestones cost or duration. We sum it up to bring you in overall estimates required to complete the scope that can be in duration or cost. The next technique.

We have at hand is data analysis. We do two aspects as part of this. One is our minute analysis. Another is reserved analysis.

Alternate analysis is are all about revisiting. The resource pack em loaded on the activity for example on the feature set 1. We have loaded to developers of 11 and 3 can i achieve using one developer of skill level and 3. Another developer of skill level l1.

Similarly on feature set can i achieve this by having one l3 developer and 2 element. Developer thereby can a optimized cost. So. It s all about did.

I foresee all possible resources that means man machine material did i consider all all those aspects. It also consists of what activities. I can make by myself or by my team or how much of these activities can event. Ah for example.

If you are looking out for servers. You may probably arrange them the completion of your activity. Oh can i out show some of the activities. So that i can use my resources and other important activities and i can gain cost optimization also so all these kind of alternative analysis.

We do as part of data analysis. The another data analysis is how much contingency reserve and management reserve..

The manager. We should have what is contingency reserve contingency reserve is amount of money or time management provides you to the approve risks for example as part of developing your schedule or cost you come up with schedule. Risks and costas who mitigate those lists need money. So.

Contingency reserve is all about that money the amount of money or time management. Provides to mitigate. The approved risks now there will be other risk called management reserve. Which is we are unable to identify those risks.

That s why management keeps an amount of money just to make sure that no those calamities happens in those times. Where you know unanticipated risks. Happens management takes out money or duration from that management reserve and provides the project team so whatever estimate. We have calculated so far using any of the techniques before we add contingency reserve in terms of preparedness towards meeting.

The estimated and approved risks management. Reserve is to mitigate an estimated unforeseen unknowns are lists in this way. You have these two reserves in place. Let us learn a decision making technique called sister fine fister file is all about using your hand.

How one can express their confidence towards an estimate made for example one person can show his fist of five like this that means. He shows all his file fingers this means. He is showing strong support to the estimate made if a person shows a fingers like this that means he is supporting this idea in earlier case of file is strongly supporting four means his supporting three means his liking two means. He has certain concerns one means he has strong concerns and all fingers closed means his newly accepting using this technique.

A scrum master at a project manager they can reconvene. The team and ask the team members to show their sister five at once in field. It goes like this the project mother comes and says guys just know show your to fight all members please show your fists of fire one two three go that means everybody will show their fists of fire like this some members can show like this someone this can show like this some of us can show like this some members can show like this he clearly explains the differences about team s confidence about the activity estimates. We made then a scrum master or a project manager facilities.

A discussion so the real ideas why somebody strongly objects it why somebody strongly supports it what are the reason is there any reusables made or easy that certain scope is not properly. Understood what are the risks in work. All those things will come as part of the discussion. Now we will go for next drawn room and ask people to show their fists of fire like this rise now that you understand now show your fists of fire one two three go it may so happen that last drone who s shown his member like five.

He may come down to three some members who shown his numbers has won in the last round may he may come down before the numbers may change. Because the clarity about the activity may change. So. After three or four rounds.

The project manager may arrive at a situation. Where everybody shows fingers either three or more. Then that sets the right confidence about the activity estimation that we made this technique helps to bring all risk involved to come forward and people thinks about it discuss about those risks. And also in scenario wherein.

Certain people are calm and they don t come forward easily those people are also they are mandated to show their fists of fire in that exercise we will actually take them on their inputs and they subject. Matter experts also into consideration. This is how a decision making can be done in estimation process. Thus using the estimation concepts.

Like expert judgment in a locus estimation parametric estimation three point estimation bottom up estimation and the result analysis and decision making techniques. We can actually estimate an activity duration or cost. These are the conceptual depths of any estimation technique that we use i look forward to add more value using such concepts in my future videos thank. ” .


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