1. allaboutxpert.com.au copyright © 2015:all content is the copyright of allaboutXpert Australia (pty) ltd PMI Australia Conference Estimation

2. copyright © 2015:all content is the copyright of allaboutXpert Australia (pty) ltd introduction hi, I am Dennis Grant. 2 I am the CEO of South Africa’s largest independent Project Management Company. I am a 15 year old “accidental Project Manager”.

3. copyright © 2015:all content is the copyright of allaboutXpert Australia (pty) ltd accidental Project Managers – why? so I wonder just how many accidental Project Managers are here today? 3 very few people leave school wanting to be a Project Manager. in South Africa there are no under graduate courses in Project Management, yet you can do your Masters and you can do your Doctorate. people often start other careers in IT, Engineering, etc. and evolve into Project Management. often this is initiated in terms of moving into a management role and/or moving into a management pay grade.

4. copyright © 2015:all content is the copyright of allaboutXpert Australia (pty) ltd so how did I approach my first estimate? 4 all are mostly based on guesswork, personality and resource experience, can be time consuming and are often inconsistently applied. “Accurate software estimating is too difficult for simple rules of thumb.” ~ Capers Jones, 1991 all are mostly based on guesswork, personality and resource experience, can be time consuming and are often inconsistently applied. “Accurate software estimating is too difficult for simple rules of thumb.” ~ Capers Jones, 1991 Expert Judgement Broadband Delphi Broadband Delphi Program Evaluation and Review Technique (PERT)

5. copyright © 2015:all content is the copyright of allaboutXpert Australia (pty) ltd I soon became a statistic…….. the Standish Group “Chaos” report shows: these findings have been fairly consistent for the last 25 years 5 the cost of these failures and over runs are just the tip of the iceberg. the lost opportunity costs are not measurable, but could easily be in the trillions of dollars. even when these projects are completed, many are no more than a mere shadow of their original specification requirements. Source: Standish Chaos Report

6. copyright © 2015:all content is the copyright of allaboutXpert Australia (pty) ltd and would likely remain a statistic …….. 6 PricewaterhouseCoopers, which reviewed 10,640 projects from 200 companies in 30 countries and across various industries, found that only 2.5% of the companies successfully completed 100% of their projects http://teamgantt.com/blog/2014/07/21/seven-shocking-project-management- statistics-and-lessons-we-should-learn/#sthash.pDQqPcz2.dpuf A study published in the Harvard Business Review, which analyzed 1,471 IT projects, found that all but one in six projects had a cost overrun of 200% on average and a schedule overrun of almost 70%. http://teamgantt.com/blog/2014/07/21/seven-shocking-project- management-statistics-and-lessons-we-should- learn/#sthash.pDQqPcz2.dpuf The failure rate of projects with budgets over $1M is 50% higher than the failure rate of projects with budgets below $350,000 http://teamgantt.com/blog/2014/07/21/seven-shocking- project-management-statistics-and-lessons-we-should- learn/#sthash.pDQqPcz2.dpuf Sadly the trend is towards more failure

7. copyright © 2015:all content is the copyright of allaboutXpert Australia (pty) ltd I figured out what was going on….. 7 concept evaluation detailed design high level design build, test and fix implementation non involvement of user inadequate communication inadequate planning inadequate definition bad / poor estimating incorrect scheduling numerous changes inadequate control poorly planned teaming inappropriate project management approach inappropriate project management approach unsupportive top management unsupportive top management failure to use systems approach failure to use systems approach wrong project manager wrong project manager misuse of management techniques misuse of management techniques and importantly where the really bad “stuff” happens

8. copyright © 2015:all content is the copyright of allaboutXpert Australia (pty) ltd some principles that drive success …. planning is key 8 8

9. copyright © 2015:all content is the copyright of allaboutXpert Australia (pty) ltd some principles that drive success …. ability to influence is at the beginning of a project and not when things go wrong 9 9

10. copyright © 2015:all content is the copyright of allaboutXpert Australia (pty) ltd some principles that drive success …. perceived capacity is always greater than real capacity 10

11. copyright © 2015:all content is the copyright of allaboutXpert Australia (pty) ltd where do Project Managers come from? 11 The Sydney Opera House strategist / imagineer organiser / stalwart or preserver socialiser / empathiser realist / analyst not everyone is good at planning or estimation those that can execute a plan +- 70% those that can come up with a plan +- 30% 11

12. copyright © 2015:all content is the copyright of allaboutXpert Australia (pty) ltd there is no standard estimation process. project managers make use of their own tools, methods and processes to come up with estimates. these are therefore inconsistent and often dependent on the experience and knowledge of the project manager. there is no central repository for recording estimates. assumptions cannot be traced and this problem is compounded by turnover of project management staff. initial estimates that drive the initial budgeting process tend to be significantly lower then final budget/actuals. history shows the projects planned for the release miss their release dates. this will increase costs and project delivery timelines. a large percentage of active projects have no baseline in place. generic problem statement estimation is inconsistent and ever changing 12

13. copyright © 2015:all content is the copyright of allaboutXpert Australia (pty) ltd generic problem statement - detail the above issues result in variances in time, cost and effort when compared to actuals lack of clarity around who does the estimates and who is responsible for the estimates. skills not adequate to deliver accurate estimates. limited understanding of the estimation process and terminology. PEOPLE business do not understand the estimation process and their input into this process. lack of clearly defined scope management process and principles from an estimation perspective. estimation is dependent on the forecasting and budgeting process, which is financially driven rather than size driven. PROCESS lack of historical information. lack of industry benchmarks. lack of a central repository for storing estimations and assumptions. estimation process is dependent on the requirements process, which is new and slowly maturing within the organisation. no standards exist in terms of sizing (function point count). SYSTEMS PRACTICE 13

14. copyright © 2015:all content is the copyright of allaboutXpert Australia (pty) ltd a science that drives effective estimation Parametric Estimation –some great examples: Seers SPR etc. sizing is the key input to any estimate. complexity affects productivity ratio’s. environments affects productivity ratio’s. processes affects productivity ratio’s. bottom up is better then top down. 14

15. copyright © 2015:all content is the copyright of allaboutXpert Australia (pty) ltd positioning estimation High Level DesignDetailed DesignBuild, Test, FixImplementation E E Stage In Process: End of High Level Design Stage In Process: End of High Level Design Stage In Process: Middle of Detailed Design / End of Detailed Design Stage In Process: Middle of Detailed Design / End of Detailed Design Stage In Process: Release into Production Stage In Process: Release into Production Technique – Proxy Compile estimation input from all areas and collate for overall time & effort. Inputs from other Group Technology areas: High Level Work Breakdown Structure with expert based estimation Technique – Proxy Compile estimation input from all areas and collate for overall time & effort. Inputs from other Group Technology areas: High Level Work Breakdown Structure with expert based estimation Technique – Metric (FP count) Detailed documentation Detailed Work Breakdown Structure Technique – Metric (FP count) Detailed documentation Detailed Work Breakdown Structure Technique Actuals versus Estimated tracking and comparison based off Function Point Counting Looking at actual project schedule Capture Actual value Technique Actuals versus Estimated tracking and comparison based off Function Point Counting Looking at actual project schedule Capture Actual value E E E E Idea Cloud / Concept Evaluation Stage In Process: Beginning of the concept phase Stage In Process: Beginning of the concept phase Technique - Analogy Optionally–using to size and estimate projects where very littlie information is available. Technique - Analogy Optionally–using to size and estimate projects where very littlie information is available. Innovation Project Lifecycle Estimation Confidence Factor 50 – 60% Estimation Confidence Factor Middle of Detailed Design = 60% End of Detailed Design = 85% Estimation Confidence Factor Actual = 100% Estimation Confidence Factor 20-40 % 15

16. copyright © 2015:all content is the copyright of allaboutXpert Australia (pty) ltd most things can be sized analogy sizing estimates can be made against a variety of software products in the table, further categorised by size (small/medium/large) the portions of enhancement projects that are new, enhancement, maintenance, and conversion effort are recorded here proxy sizing use a multi-tiered approach to sizing estimate built from known values approximation accuracy approaches that of FPA combine with size by metric when more is known metric sizing function points (recommended) confidence documentation facilitation 16

17. Copyright © 2015:All content is the copyright of allaboutxpert (pty) ltd and/or allabout projectmanagement (pty) ltd Project Estimation Process Schedule and Summary Estimation report sent to Project Manager Estimation Team finalise estimation output and reporting Estimation Team and PM + key project resources meet for estimation workshop – facilitated for larger projects/programs Environmental Assessment Questionnaire completed and submitted with required project documentation PM updates estimation output with current knowledge and compares to current project schedule, updating where he deems necessary Updated schedule ready to be baselined Estimation request submitted to call centre Support documentation and request for documentation sent to PM If iterative updating of estimation output are required, PM to request from estimation team If no updates planned or final output accepted and signed off -> 17

18. copyright © 2015:all content is the copyright of allaboutXpert Australia (pty) ltd Project Management cost and effort benchmarks 18

19. copyright © 2015:all content is the copyright of allaboutXpert Australia (pty) ltd the common sins of Estimation 19 confusing estimates with targets: early estimates are often used as the “bogy” point but soon develop a life of their own. ROM vs. reality! saying yes when really meaning no: vigorous, job-defending estimation with little data or quantities. young, junior, introvert software engineer vs. sales person who is more experienced, senior, and extrovert. committing too early with lots of uncertainties: “cone of uncertainty” means that the uncertainties decrease as the project progresses. early in the software development lifecycle there is a tendency to underestimate. estimate early and estimate often!

20. copyright © 2015:all content is the copyright of allaboutXpert Australia (pty) ltd the common sins of Estimation 20 estimating in the “impossible zone“: schedule compression increases the total cost or effort for the project. “impossible zone” is a compressed schedule with a zero chance of success. “where no man has gone before.” taking credit for increased productivity BEFORE you achieve it: assume the productivity loss from initial use of new tools or methods considering learning curve and error-proneness. using only one estimation technique: estimate with different ways and looks. multiple approaches contribute to Brook’s “vigorous defense”. same picture different camera angle.

21. copyright © 2015:all content is the copyright of allaboutXpert Australia (pty) ltd the common sins of Estimation 21 not using estimation software: it can bring more credibility providing a sanity check against completed projects. science of estimation is supported in the tools. not including risk impact: remember Murphy’s Law? “anything that can go wrong will go wrong.” risk exposure is where “risk buffer planning” starts. providing off-the-cuff estimates: treat estimation as an essential task. even simple arithmetic is better than guessing or intuition. document your assumptions and knowledge. define a standardised estimation procedure (multiple approaches, description of imprecision, re-estimate schedule, point of estimate becoming commitment). decompose big estimates into smaller ones (system-modules).

22. copyright © 2015:all content is the copyright of allaboutXpert Australia (pty) ltd a practical walkthrough of the estimation process 22

23. copyright © 2015:all content is the copyright of allaboutXpert Australia (pty) ltd thank you 23