Estimating for Fixed Price Projects
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Author: Anton Bobykin, www.eastbanctech.com In this presentation, we discuss and learn estimating for fixed price projects. Project managers, Tech/Team leads, and Developers will: - Uncover estimating pain points and look for solutions. - Understand what techniques are best for Estimating for fixed price RFP with no team assembled and no historic data
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It is a detailed outline of different process groups and Project Management terms commonly used and understood in PMI exams
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This document provides guidance on creating a smart proposal for a fixed price project. It outlines the key elements to include such as project scope, schedule, costs, risks and change management. It recommends defining scope, creating a work breakdown structure, estimating tasks, determining resources and schedule, identifying risks and adding reserves, and calculating costs and budget. The proposal creation process involves multiple stakeholders from project managers to architects. Determining budget involves calculating full team costs, adding buffers for ramp up/acceptance phases, procurements, bonuses and trips, and reserves. Monitoring involves tracking schedule and cost performance indices.
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Wbs
This document discusses software project management techniques for work breakdown structures (WBS), estimation, and scheduling. It defines the key differences between planning, estimating, and scheduling. It provides guidance on creating a WBS using top-down, bottom-up, or other techniques. Estimation methodologies like algorithmic measures, reuse factors, and the COCOMO model are explained. The importance of understanding deadline types for scheduling is also covered.
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project on software industry
The document discusses work breakdown structures (WBS) which are hierarchical lists of project activities used for planning, tracking progress, and estimating costs. It describes different types of WBS including product, process, and hybrid WBS. It also covers techniques for creating a WBS such as top-down, bottom-up, and analogy approaches. Estimation methodologies like expert judgment, function points, and Wideband Delphi are also summarized.
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test
This document discusses cost management and estimating costs, which are important parts of project planning. It defines cost management, outlines the cost management plan, and describes estimating costs, including types of costs, inputs, tools and techniques, and accuracy of estimates. The key aspects of estimating costs are scoping the work, using historical data, accounting for risks and quality costs, and progressively improving estimates as the project scope is better defined.
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Estimating for Fixed Price Projects
- 1. Estimating for Fixed Price Projects
- 2. Overview • Problem statement • Known estimation approaches • WBS-based (bottom up) estimation • Three-point estimation • Assumptions • Risk management and reserves • Reserves versus Assumptions • Reasons for poor estimates
- 3. Problem statement • Project or even domain is unknown • Team is not yet defined • Lack of experts • Typically lack of time and efforts for analysis and discovery • But you need to prepare RFP Cone of uncertainty
- 4. • Analogy-based estimation • WBS-based (bottom-up) estimation • Parametric models • Size-based estimation models • Group estimation • Mechanical combination • Judgmental combination • Typical projects • Discuss it later… • Typical Android screen = 40hrs • Story points in Agile • Planning poker • AVG(Analogy-based, WBS) • Expert judgment for above models Known estimation approaches – no silver bullet
- 5. • Deliverable-oriented decomposition of the project into smaller components • WBS permits summing of subordinate costs for tasks, materials, etc… • Design principles: 100% rule, mutually exclusive components, outcomes not actions, level of detail WBS-based (bottom up) estimation Product, data, service
- 6. Three-point estimation Normal distribution plot 2xSD = 95% (typical in software dev) 3xSD = 99.7% • Optimistic, most-likely, pessimistic • Estimate(50%) = (P+4*ML+O)/6 • SD = (O – P) / 6 • Estimate(95%) = E + 2 * SD
- 7. Assumptions • Reading between lines • Requirements guessing • Functional and non-functional (technology) • Out of scope assumptions • Team / resources assumptions • Skill level • Availability • Realistic • Review with customer -> change requests
- 8. Risk management and reserves • Identification - Risk registry • Assessment • Estimates, Risks – input to Cost mgmt • Contingency reserves • Management reserves
- 9. Reserves versus Assumptions • Two extremes for unknown: all assumed and all are risks • All assumed – Low cost and lots of changes • All are risk – High cost • Balance: • Everything critical for customer – assumptions • Everything optional - risks
- 10. Reasons for Poor estimates • Undefined objectives • Incomplete plans • Unrealistic resource assumptions • Naïve estimates • Customer/management arrogance • Lack of training in developing estimates • Adverse relationship between estimators and customers • Absence of accountability • Lack of candor (transparency)
- 11. THANK YOU Anton Bobykin Project Manager abobykin@eastbanctech.com 202-295-3000 eastbanctech.com