2. AGENDA: “tell them what you’re going to
tell them”
• Resource management and estimating differences
– what to do about them and who to talk to
• Resources: project and corporate needs
• Estimating
– in various ways, with varying reliability, and why
• Sharing output, strengthening knowledge
• Lessons learned from resources managed and estimates
created...
– “tell them what you told them”
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3. Resource management and Estimating.
Similar but used differently
Both are used to
understand project needs
from different perspectives
...but both must reconcile to
the project plan
...that is part of the corporate
overview
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4. Resource management
• People [and hours] needed to do the project
– Not plant and equipment estimates
– Not material take offs (MTOs)
– Not bills of quantities (BOQs)
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5. Estimating
– Shares some
base data with
resource
management
• Costs [and time] of the tasks at hand
– May have plant and equipment
– Early stage, unlikely to have
sufficient detail for good
quality MTOs or BOQs
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6. Resourcing – envisaged effort
Parkinson’s Law (Part 1): “Work expands so as
to fill the time available for its completion”
• Original resource
plan probably in the
signed contract near
the deliverables
schedule and the first
programme
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PATRICK HERNS - RESOURCE
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7. Resourcing – plan early
Parkinson’s Law (what he really said...): “The amount of
time which one has to perform a task...
...is the amount of time it will take to complete the task”
• Initial plan changes with
project reality, but informs
HR for early planning
– no ‘spare’ people; hiring takes
time, regardless of automated
‘matching algorithms’ used by
HR or their suppliers
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Cecil Northcote Parkinson
8. Resourcing – key contacts
• Who to talk to about staff numbers as the project
proceeds
– engineering manager
– discipline leads
– project controls
– project planner
• Tell project sponsor/owner and HR about changes
ASAP
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9. Project status meetings: key to
resource management success
• Perfect Planning Prevents Piss Poor Performance
• Project heads of teams meeting highlight
short/medium term requirements against
actual and future tasks
– Give 90 calendar days warning to department
heads and HR for new resources. 45 days for
demobilising
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PATRICK HERNS - RESOURCE
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10. Project status meetings: key to
resource management success
• Perfect Planning Prevents Piss Poor Performance
• Compare to latest accepted programme – what’s on
critical path?
• Can scheduled ‘leavers’ be recycled?
• How does current plan compare to:
– a) last manpower plan
– b) original manpower plan
• Explain changes from business case to project sponsor
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11. Estimating uncertainty (degrees of
‘freedom’) in early project life
Invitation to tender
(ITT) <15% certainty of
complexity or out turn
Contract award ~20%
certainty
Conceptual design /
block diagramming ~25%
certainty
General arrangements
(GAs) ~40% certainty
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12. Estimating uncertainty (degrees of
‘freedom’) through project maturity
Detailed design (DD), isometrics
and clash diagrams ~70% certainty
Approved for construction (AFC)
=<80% certainty
Redline fab yard / construction
drawings (IFC) >80% <95%
certainty
As Built Final drawings 100%
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13. Why different types of estimates?
• To see a project from different viewpoints for different reasons
• To ask if there is convergence to or divergence from a common point
• Provide a quick estimate of what things might cost at a given point in time...
• Or be as detailed as the project has time and money to invest in
• Three types will be considered:
– Bottom-up
– Parametric
– Comparative
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14. Estimating: the work breakdown
structure (WBS)
Basic Level 1 WBS (‘Project’ is Level 0)
WBS goes down as many levels as it is realistic and possible to
measure the project against.
This may be to Level 5, but rarely exceeds Level 6 except for
detailed defence, aerospace or nuclear work
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15. Estimating: cost, time, resource (CTR)
• Lowest sensible level of the WBS is that item that can
be measured in terms of cost, time and resource - bolts
• This is the CTR (aka ATR, for activity, time, resource)
• Always recorded, always measureable; used a lot by oil
& gas clients and contractors in completing of time
records; not often used in other business lines
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PATRICK HERNS - RESOURCE
MANAGEMENT AND ESTIMATING
16. Estimating: cost, time, resource (CTR)
• Can be written before or after the WBS
• Must always map 1:1 with the WBS
• Written by department heads, discipline leads;
compiled by planner, ‘super-checked’ by cost
engineer (or QS)
• Costs, time and resources from the plethora of
CTR records in the WBS rolls up to the master
budget and schedule, via ‘CTR Catalogue’
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17. Bottom-up estimate – The Full Monty
• Each WBS task divided into its CTRs/ATRs
– Each CTR/ATR priced by reference to actual rates or some other documented
metric
• Estimates for individual tasks added up to a sub-total within a
project, that is the completion of that phase of work
– The smaller the component the more likely to be properly
priced
– Methods of measurement, prices, unit rates and other
assumptions must be documented
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18. Bottom-up estimate – The Full Monty
• All phases added together form the entire estimate
• Used for tolerance of <5%> to ~<+10%.
• Also called ‘definitive estimate’
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19. Parametric estimate
• Excellent tool where
statistical relations
between data and
variables already exist
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20. Parametric estimate
• Metrics typically include:
– Cost per cubic metre concrete,
raw
– Cost per tonne washed
aggregate (sized) or linear
metre rebar (sized)
– Square meter cost of power
station building construction
– Linear metre of X span Yo
slew
bridge, unit rate allowances for
wingwalls, abutments,
parapets
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21. Parametric estimate continued
– Unit rate quotes for scissor
crossings, straight track or
radius of known degree
– Known rates for excavations
in soil, clay, chalk + extra
over costs where applicable
– Unit rate allowances for
installation of utilities –
quotes from utility
providers
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22. Parametric estimate continued
– Construction-book rates
for gang strength and
man hour allowances
(NWRA if applicable)
– Good for budget
estimating: tolerance
<10%> to +25%.
– Supersedes rough order
of magnitude (ROM)
estimate
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23. Comparative estimating – how to do
it
• Take an existing or previous
project of similar type
• Create a table of unit rates
for all relevant aspects of it
• Factor them up or down
according to the size of your
present or future project
(rule of thumb)
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24. Comparative estimating – why do it?
• Produce estimates in a tolerance range of <25%> to +75%
• Plan cash requirements against future projects in-pipeline
• Produce rough order of magnitude (ROM) estimate of
work before or at the ITT stage
• Populate future years’ orders estimates
• DOES NOT TRANSLATE WELL INTO ANY OTHER
ESTIMATING TECHNIQUE
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25. Sharing information between project
and corporate
• Resource needs and estimated costs and time are not
solely project orientated
• To support projects, business management and HR
departments need data to:
– plan for busy /slack periods to maximise billable employee
time
– show when shortfalls in skills may occur
– prepare for ramping down of each project and
redeployment /loss of resources
– prepare look-ahead reports for estimating requirements
from third parties and other offices
– assist creating amalgamated cash flows and profit/loss
estimates for’ 5 Year Plans
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26. Sharing information between project
and corporate
• Ensure all updates to manpower plans and estimates are shared too
– Regular updating is necessary to keep track of reality and proposed
additions/subtractions
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27. Lessons learned
• Metrics from completed projects
kept for future reference
– Man-hours / equivalent staff
– Payroll rates per job-hour
(and year of payment)
– Costs per unit commodity
– Costs per notional unit (e.g.
square metre cost power
station construction)
– Specialised consultant rates
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28. Lessons learned
• Comparable with publicly
available cost book data
• Produce rapid responses to
management for ROM and
budget estimates
• Use to sanity check other
contractors’/consultants’
estimates (may be a billable
skill)
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29. Lessons learned
• What was profitable v.
what wasn’t; comparable
for future project
consideration
• What did we do well?
• What did we do badly?
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