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Right On Time: How to Estimate Project Time Effectively

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When clients and independent professionals get together, there are two big questions that always get asked: How much is it going to cost, and how long is it going to take? Struggling to answer the latter question? Elizabeth Saunders, Elance employer and expert time coach, shares her tips on how to estimate project time effectively.

Estimates matter. Get them right, and you have happy customers, employees and profit margins. Get them wrong, and you have just the opposite. When you’re a freelancer, successful time and cost estimates can literally mean the difference between bliss and bankruptcy.

So if estimating is so important, why do most people think it comes down to guessing?

Because it’s deceptively complicated and emotionally charged.

As a time coach, I’ve developed an exclusive Schedule Makeover process that allows me and others to work 40 hours a week or less, have evenings and weekends free and make a living. I’ve seen that a systematic approach, like the one described below, is the best way to overcome this challenge. And in order to give you some specific examples, I interviewed a senior business systems consultant (i.e. a liaison between business and IT) and a quality assurance analyst (i.e. a bug finder) for their best IT estimating examples.

Here are some of my best Schedule Makeover tips on effectively estimating projects:

Get Clear on What You Are Estimating

The Most Important part of project estimation is really truly understanding what you are estimating. If the client doesn’t really know what problem they want to solve, let alone what they want you to do, suggest completing a mini-project to clarify these elements before giving a full project estimate:

Phases: You need to understand the high-level stages that will take the project from start to finish. For instance, a small project could include: receiving information from client, executing task, delivering items and making changes. A large project could have many more and higher level phases such as: analysis, design, testing, documentation, installation, user training, tech support training and help desk training.

Done: As an outside contractor, make no assumptions about the definition of done. If you think “done” means installing a system on the server, and your client thinks “done” means the system is in use and supported by internal staff, you have two very different projects and two very different estimates.

Parts: Breaking down each “phase” into components ensures that you and the client agree on what’s involved and makes it easier to make accurately estimate and justify your estimates. (Some useful tools for capturing this information include: Basecamp, Action Method, MindManager and Microsoft Visio.)

Deliverables: Each “part” should also have clearly defined deliverables, i.e. what the client actually expects to receive from you. In IT, this could include an architecture diagram, database tables, visual interface, test plans, link matrixes and more!

“When I used to code reports, it would amaze me that it would take about 50% of the time to get the report working with the right data on the page and the calculations correct. The other 50% of the time would be spent doing the nit-picky stuff, like making sure the columns lined up correctly. Sure, I was ‘90% done’ when I had ‘solved the problem,’ but actually finishing the job took about the same amount of time as doing the more challenging conceptual work,” John A. Saunders III, senior business systems consultant at Abbott Laboratories.

Consider These Estimating Factors
Past Experience: How long has it taken me to complete this type of project, phase, part or deliverable in the past? (Be honest with yourself about how long activities actually took—not how long you think something “should” have taken.)

Tangible Items: Count everything. For instance, Hannah Gornik, my resident QA expert, counts: pages of text, number of links and pieces of functionality (i.e. does the page have one dimension, such as text, or does it have other functions like sending and receiving e-mail messages). She multiplies the estimate for a basic page by two, three, four or five depending on a page’s complexity.

Intangible Factors: No matter who is working on the project, you need to budget “communication” and “administrative” time. And if you’re working with other team members, you also need to factor in project management.

Value Assessment: Be clear on what’s really important to the client and invest the most time in these areas. Don’t spend more time making something perfect that won’t help accomplish your clients’ main objectives.

Capacity: Recognize your company’s available capacity. Maybe something could be completed in two weeks by your in-house staff. But if you’re already at 80 percent capacity for the month, you may need to estimate that it will take you a month and factor in the time and financial cost of contracting out part or all of the project.

Manage These Estimating Risks
Changes: Getting clear project definition at the start will decrease the chance of changes and highlight when changes are requested. But changes do happen so you usually want to add at least 10 percent—or more depending on the client—to your estimate.

Additions: If a project is large enough to inevitably need additions or you know certain clients just can’t seem to help themselves, try negotiating a separate “additions” budget to avoid constantly renegotiating the project estimate.

Problems: Try to list out the top 5-10 risks. Then think about what activities could mitigate them. For example, if one of the largest time risk factors is slow client response time, you could schedule in all of the checkpoint meetings at the beginning of the project.

Governance: Establishing when you will have checkpoints, how you will report progress, how issues will be resolved, and who will make time or cost decisions reduces: “I thought you were going to….” blaming or delaying games.

Psychology: If you don’t really have the desire to work on this project, you might just want to pass. If on the other hand, you really want or need a project, you need to have the confidence to still give an accurate estimate. An unrealistically low estimate may win you the job but cause you and your client incredible frustration later. It’s best to under promise and over deliver.

The next time you have to estimate a project, pull out this road map to creating accurate estimates that reduce the risk and increase the happiness of you, your clients and your business. Taking time to estimate will give you a huge return on your investment.

Special thanks to my IT advice contributors: John A. Saunders III, senior business systems consultant at Abbott Laboratories, john.a.saunders@abbott.com, and Hannah Gornik, freelance quality assurance analyst, twitter.com/qahannah and qa.hannah@gmail.com.

About the Author:
Elizabeth Grace Saunders is a time coach who empowers people who feel frustrated and overwhelmed to feel peaceful and accomplished through Schedule Makeovers. She has spoken to thousands and coached dozens of individuals from New York to Los Angeles to Florida. Elizabeth has also appeared in Inc magazine, The Chicago Tribune and on NBC.

Comments

Hello,

Thanks for share those Tips, they're awesome for me and will give me a start point to make a better schedule.

Also I have a question, when you estimate the time and sometimes you have a client who request additional requeriments in the project, do you estimate that as offline hours? Are you willing to work in weekends or in extra hours?

What do you think?

Congratulations for the Great tips :)

Regards,
Rafael Benard

Great article Liz.

Estimates are my greatest fear, and probably my biggest drawback to obtaining client satisfaction.

My problem is, I'm often asked to produce work that has never been performed before, as I specialize in creating new technology solutions, and I basically rely upon my talent to produce desired results. Sometimes the most complex project can be finished in a sudden spark of inspiration, and other times the most simple sounding project can turn out to be almost impossible using available resources. Not to mention, I'm terrible with money (cost estimates) as I'd do this for free if I didn't need to pay bills. I often end up just saying "Let me finish the project, and you pay me whatever you feel it's worth." haha. Not a very professional attitude, I know, and it doesn't do much to inspire client confidence.

I'm bookmarking this article and will refer back to it often - at the very least, it will give me the confidence I need to attempt to produce an accurate estimate for my clients.

Great article - thanks for sharing the info. I plan on implementing the estimation tools - good perspective to come up with the right numbers (especially the counting!).

Thanks for bringing up this topic.

Software Estimation is something we provide exclusively as a separate service line and so we understand its importance.

One of the important agile techniques for estimation is Delphi (WideBand Delphi) where opinion from multiple experts (about effort estimation) is taken and aggregated.

Ofcourse there are more scientific ways too like sizing the requirements using FPA (Function Point Analysis) and then using this size in parameteric estimation models like Dr Barry Boehm's COCOMO-2 to output effort estimates. Estimation models not only provide effort estimates but also schedule estimates.

We do both agile and scientific estimation.

If people like to avail our free agile services, they are more than welcome.

eConcinnity (dot) com

Thank you for your positive comments! My goal is to empower you to feel peaceful and accomplished.

Rafael: To answer your question: As I often explain to my ScheduleMakeover.com clients, work/life brilliance™ looks different for different people. I personally try to budget my time so that I rarely need to put in extra hours on the weekend and evenings. But for some people, they can still feel peaceful and balanced by working more hours or putting them in at odd times. Here are some key questions to determine what's right for you:
-Is working more than your ideal hours happening just occasionally or is it becoming a habit?
-Is working the additional time keeping you from investing your time in something that is a higher priority personally or professionally?
-Are there lower priority activities or meetings that you could reduce at this time in order to stick to your hours?
-Could you ask for the client for a deadline extension given the increase scope of the project?

Jason--I'm really glad that you found this article helpful. Given the nature of your work, you definitely should consider the tip to do a paid "mini-project" to define the requirements before giving a total project estimate. Also, for you it may be helpful to see if any elements of the new project resemble something you have done before. By piecing together some of the "known" variables, you reduce some of the estimating risk.

To receive more information on time coaching, check out www.ScheduleMakeover.com

Have a brilliant day!
Elizabeth Saunders-Your Time Coach

We'd say be clear on the cost and when you're not sure about the rates, quote it little above the average you think would be a good price. In most of the cases there are amendments and you can consider the higher rate as your fees for the amendments/updates.

In case if you quote less, those hours on further amendments/updates/changes would kill happiness off that project(most likely).

'Pay the best price you think' should not be a policy for freelancers or companies who are shy in nature.

We have learned with experience and never underquote or let the client choose the final rate after delivering. We rather tell them hours that may be rquired and point them to our hourly rate on the profolie (on el, odsk or anywhere)