AMC Bridge is exploring how to improve their project estimations for fixed-price projects. Their current expertise in estimating large projects is limited, resulting in underestimations due to missing tasks and complexity. AMC Bridge analyzed past projects and found main reasons for inaccurate estimations were low performer quality, underestimating tasks, and tasks going outside initial scope. AMC Bridge developed a new estimation approach involving more templates, roles, and padding costs that has increased estimation accuracy by 23%.

1. Copyright © 2017, AMC Bridge LLC
Project Estimation
Lessons Learned
Copyright © 2017, AMC Bridge LLC

2. Copyright © 2017, AMC Bridge LLC
SPEAKER
Vadym Synakh
Chief Operating Officer
• Scientific background in Applied Math
• 25+ years in IT industry
• Built AMC Bridge from 3 to 350+ engineers

3. • Specialization: Engineering Software development
• Size: 350+ Software, QA and Tech Support Engineers
• 50+ clients and 150+ projects
• Notable clients: Autodesk, Dassault SOLIDWORKS, Siemens PLM, PTC,
3D Systems, Stratasys, Trimble etc.
• >90% of our clients are software vendors
Copyright © 2017, AMC Bridge LLC

4. Copyright © 2017, AMC Bridge LLC
PROBLEM STATEMENT
• AMC Bridge endeavors to expand services for
manufacturing companies
• Unlike vendors, customers prefer fixed price
projects
• Fixed price projects require accurate
estimations
• AMC Bridge expertise in estimating sizeable
projects is limited
• We are exploring how to do estimations and
would like to share our experience with you

5. Copyright © 2017, AMC Bridge LLC
PROJECTS THAT REQUIRE ESTIMATION
Fixed Price Time & Material
with Cap

6. Copyright © 2017, AMC Bridge LLC
WHO PREPARES ESTIMATION
Sales / Account Manager
Project Manager
Tech Experts

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ESTIMATION WORKFLOW
Project
Request for
Quote (RFQ)
Ballpark
Spec
Preparation
Negotiation
Analysis
of results
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Detailed
Estimation

8. Copyright © 2017, AMC Bridge LLC
BALLPARK ESTIMATION
Set a ‘gate’ for a minimal project size
Investigate customer’s expectations
Calculate your costs
Compare both and estimate your profit

9. Copyright © 2017, AMC Bridge LLC
ESTIMATION LIFECYCLE
Series of
Workshops
Blueprint Estimation
Project
Milestones
Risks,
Open Issues
Proof of Concept,
Mockups
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Delivery
Implementation
ESTIMATED PROJECT STAGES
Initiation1
2
3
4 Tech Support

11. Copyright © 2017, AMC Bridge LLC
ESTIMATION TEMPLATE
ESTIMATED COST OF SERVICES
PROJECT DESCRIPTION:
Use this space to introduce what the estimate is
for.
Project Tasks Team Composition
PROJECT
INITIATION
Functional Specification Software Engineer
System Architecture Tech Expert
Design Specification Tech Lead
Acceptance Test Plan Tech Lead
Estimation Preparation Tech Lead
Schedule Preparation Tech Lead
Subtotal

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Project Tasks Team Composition
PROJECT
IMPLEMENTATION
Setting up Project Environment DevOps Engineer
Setting up Test Environment DevOps Engineer
User story 1
Task 1 Software Engineer
User story 2
Task 2 Software Engineer
Task 3 Software Engineer
Acceptance Test Package QA Engineer
Continuous Integration Integration Engineer
Unit/Integration Testing Software Engineer
Subtotal
ESTIMATION TEMPLATE

13. Copyright © 2017, AMC Bridge LLC
Project Tasks Team Composition
PROJECT
DELIVERY
Code Review Tech Expert
Installer Development Software Engineer
Functional Testing QA Engineer
Stabilization (Dev) Software Engineer
Stabilization (QA) QA Engineer
Regression Testing QA Engineer
Acceptance Testing QA Engineer
Delivery Packaging and Deployment Software Engineer
Post-Delivery Support Software Engineer
Project Documentation Tech Lead
Subtotal
PROJECT
MGMT
Project Management Project Manager
Subtotal
Total
ESTIMATION TEMPLATE

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ESTIMATED PROJECT ROLES
Development
DevOps
Management
QA
Integration

15. Copyright © 2017, AMC Bridge LLC
NUMBERS PRESENTED TO A CUSTOMER
Original estimation
provided by PM
Original estimation
plus 50%
Original estimation
multiplied by 3
As much as
customer can pay

16. Copyright © 2017, AMC Bridge LLC
ANALYSIS OF RESULTS
Time estimation
vs
Real time spent
Project price
vs
Real cost

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REASONS FOR WRONG ESTIMATION
Lack of experience
Low performance
Out of scope
Underestimation
Overestimation
Overhead
Overhead
Change order
Money loss
Extra profit vs
Lost opportunity
=
=
=
=
=

18. Copyright © 2017, AMC Bridge LLC
HOW TO DEAL WITH
‘OUT OF SCOPE’ SITUATION
Team Leader informs Project Manager and Account Manager
as soon as a new request comes
2
3
4
Project Manager regularly reviews spent time
Account Manager regularly conducts budget review
Account Manager initiates Change Order issuing
1

19. Copyright © 2017, AMC Bridge LLC
REASONS FOR UNDERESTIMATION
Missing tasks
Oversimplification
Tasks integration overhead
Stabilization overhead
Dev integration overhead
Pad cost based on historical
data
Break large tasks into
smaller chunks
Pad cost based on project
complexity
Pad cost based on historical
data
Pad cost based on
team size
Stage integration overhead
Pad cost based on amount
of stages

20. Copyright © 2017, AMC Bridge LLC
AMC BRIDGE OUTCOME
Main reasons of estimation failures
in the descending order:
Low performance (juniors)
Underestimation
Tasks out of initial scope
Lack of expertise
New estimation approach results
based on AMC Bridge Research Projects
BEFORE
AFTER
31%
8%
After the implementation of new estimation system
the accuracy of estimation increased by 23%

21. Copyright © 2017, AMC Bridge LLC
CONCLUSIONS
Put some extra time into estimate
2
3
4 Take into account personality of the leader
1 Always analyze your results – wins and failures
Note that two developers never do the work twice faster than
one developer
Base your numbers on the performance of middle level
engineers5

22. Copyright © 2017, AMC Bridge LLC
303 Wyman Street
Waltham, MA 02451, USA
www.amcbridge.com
vsynakh@amcbridge.com
Copyright © 2017, AMC Bridge LLC