3 Team Techniques to Improve Cost Estimates

Project Risk Coach

Improve buy-in and support for your project budgets Do you ever feel like the Lone Ranger when trying to improve cost estimates? Many project managers are left to their own devices when estimating projects. So, how can we improve our cost estimates?

Operations, Finance, and Accounting for the Development of Software

Herding Cats

A Scrum of people works very well when doing Scrum , but operations, finance, and accounting are not the same as writing software for money. A Scrum of cost accountants, planner, finance, and operations people is called Chaos. Why Guessing is not Estimating and Estimating is not Guessing. It's common to hear, projects are overhead, we just need to get the value to the customer as fast as possible. This seems to be a lament from agile developers.

Decisions Without Estimates?

Herding Cats

Can you make a decision without an estimate? There are NO means of making a credible decision in the presence of uncertainty without estimating the outcome of that decision. Don't assume, Estimate. Be an Adult, estimate the impact of the risk on the probability of success.

Why Johnny Can't Estimate?

Herding Cats

Since all risk comes from uncertainty - reducible (Epistemic) and irreducible (Aleatory), estimating is a foundation of all we do. There is no discussion of the conjecture that estimates are a waste, estimates can't be done, estimates are evil, estimates must be stopped immediately. To be informed how to estimate in this broad range of domains, problems, and impacts - education, exp[erience, and skill are needed. Gow to avoid common estimating mistakes.

Principles of Cost and Schedule Estimating

Herding Cats

One of the 4 summary root causes of project performance failures is Unrealistic Cost and Schedule Estimates based on inadequate risk-adjusted growth models. If you have no uncertainty, then estimates provide no value. Herding Cats: Basis of Estimating Software Development.

4 Fallacious Reasons to Estimate and Why Those Are Fallacious

Herding Cats

There's a recent post titled Four Fallacious Reasons to Estimate. It lists the usual suspects for why those spending the money think they don't have to estimate how much they plan to spend when they'll be done producing the value they've been assigned to produce for that expenditure.

Five Immutable Principles of Project Success and Estimating

Herding Cats

Let's look at what estimates are needed to answer each of the Five questions: Principle. Estimate Needed To Answer The Question. A core principle of Managerial Finance is Value cannot be determined without knowing the Cost to achieve that Value. .

GAO Cost Estimating and Assessment Guide Applied to Agile

Herding Cats

The GAO Cost Estimating and Assessment Guide has 12 steps. Again, this is the basis of Managerial Finance. Agile Capabilities Decision Making Estimating Governance Management Performance-Based Project Management® Project Management Requirements Risk Root Cause Analysis Scheduling

How to Estimate Any Software Problem

Herding Cats

ways to make decisions with No Estimates. can we make a decision in the presence of Uncertainty without making an estimate of the impact or outcome of that decision? Let's put aside for the moment the missing principles of managerial finance, probabilistic decision making, microeconomics of decision making, Real Options, Bayesian decision networks, and other decision making processes used in modern business when spending other people's money. An estimate is.

12 Principles of Agile with and without Estimates

Herding Cats

When we hear that the next big thing in agile is Not Estimating, let's look to see how those 12 Principles can be applied without those estimates? . How estimates help implement these principles. Without estimates what is missing. This is basic managerial finance when spending other people’s money. Since software development usually operated in the presence of uncertainty, an estimate of the cost and benefit of the change needs to be made.

Book of the Month - IT Project Estimation: A Practical Guide to the Costing of Software

Herding Cats

Estimating is part of all decision making in the presence of uncertainty. Accuracy and precision are two primary attributes of all estimates. We all know estimates are hard. So why is estimating a topic that seems to be the whipping boy for software developers these days?

Can You Make a Decision in Presence of Uncertainty Without Estimating?

Herding Cats

They started with “Estimates are a waste, stop doing them.” Those advocates also started with the notion that estimates are a waste for the developers. The size of the “value at risk” is also the starting point for estimates. If the project is small (de minimis) meaning if we over run significantly no one cares, then estimating is likely a waste as well. Next comes an original post from Woody – “you can make decisions with No Estimates.”

Quote of the Day

Herding Cats

Finance is a pure information processing game. Managerial Finance and Microeconomics of decision making in the presence of uncertainty is the foundation of project management processes. NoEstimates Estimating Quotes

Biases in Project Management and How to Remove Them

Herding Cats

There is always lots of complaining about the biases introduced into managing projects and making the estimates needed to make project decisions. Managerial Finance - the branch of finance that concerns itself with the managerial significance of finance techniques.

A Reminder of the Pseudo-Science of #NoEstimates

Herding Cats

That is, ways to make decisions with "No Estimates". How would you assess a decision in the presence of uncertainty without making an estimate of the outcome of that decision. Defies the principles of managerial finance in the presence of uncertainty. When you hear.

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Start with Principles, Not Personal Anecdotes

Herding Cats

I've seen estimates abused by bad managers, so let's NOT estimate and that will fix the behavior of Bad Managers." The first thing to do is NOT fall for the fallacy that NOT Estimating will fix the behavior of the bad manager. Let's look at what an estimate is.

2018 57

Fallacy of the Week

Herding Cats

Five Different Decision-Making Strategies That Don't Need Estimates. How can you know what is strategic without estimating the strategic value to those paying? In the presence of uncertainty, these means making estimates of both the intangible assets and the tangible outcomes. No Estimate needed. Then you'll need to estimate the Value, the Cost to produce that Value, the Time when that Value is needed. Herding Cats: Principles of Cost and Schedule Estimating.

Project Versus Product in Agile Development

Herding Cats

When you hear that they are separate, and we need to move to a product point of view, you're likely talking to a coder, that hasn't taken that Managerial Finance class in his educational institution. Agree, and focus more on discovery since in *delivery* you have 4 problems: 1.

Agile 54

Quote of the Day - The Fallacy of #NoEstimates

Herding Cats

There is NO Principle of Managerial Finance, Probabilistic Decision Making, or Microeconomics of Software development, in the presence of uncertainties found on all projects, by which a credible decision can be made without estimating the impact of that decision on the probability of project success. Why Guessing is not Estimating and Estimating is not Guessing.

Impacts of traditional project funding models on agile delivery

Kiron Bondale

A key enterprise partner is the Finance department and the organization’s model for project funding will have significant influence over successful agile delivery.

Agile 194

The #NoEstimates Paradigm and Response

Herding Cats

This is a good starting point for answering the mail on the notion that decisions can be made in the presence of uncertainty without estimating the impact of those decisions. But his conjecture starts with estimates are a waste , not saying for whom they are a waste for.

2016 66

Making Decisions in the Presence of Uncertainty

Herding Cats

NoEstimates Decision Making Estimating Management RiskAll project work is uncertain. This uncertainty comes in two forms - Aleatory and Epistemic. Aleatory Uncertainty is irreducible, Epistemic uncertainty is reducible.

2013 51

Biases in Project Management and How to Remove Them

Herding Cats

There is always lots of complaining about the biases introduced into managing projects and making the estimates needed to make project decisions. Managerial Finance - the branch of finance that concerns itself with the managerial significance of finance techniques. In Kahnemann's Thinking Fast and Slow there are three biases. †.

Value, Cost and Business Decision Making

Herding Cats

So another conjecture heard from #Noestimates advocates of Focus on Value not on Cost must be assessed from the Managerial Finance point of view, informed by the market dynamics of the offering. This is an immutable principle of business managerial finance, and it must be followed if we have any hope of staying in business. Why Guessing is not Estimating and Estimating is not Guessing. In Software Value of something is totally unrelated to Cost.

A Wrap Up of the #NoEstimating Conjecture Analysis to Date

Herding Cats

The conjecture that we can make decisions in the presence of uncertainty without estimating the impacts of those decisions is without any principles that can be tested beyond personal anecdotes of I know people who spend other peoples money without providing estimates. Estimating

2016 46

The Origins of Scrum and Empirical Closed Loop Control

Herding Cats

Making decisions in the presence of this emerging uncertainty requires making estimates of the impacts or outcomes of any decision. How to Avoid the "Yesterday's Weather" Estimating Problem. Why Guessing is not Estimating and Estimating is not Guessing.

Antifragile, Macro and Micro Economics and the Misuse of Terms (Again)

Herding Cats

The Buzz Word Anti-fragile is tossed around lately by #NoEstimates advocates claiming that making estimate creates fragility to the work. The books of Taleb are focused on the Macroeconomics of public finance and the institutions that serve them.

2018 39

Value, Cost and Business Decision Making

Herding Cats

So another conjecture heard from #Noestimates advocates of Focus on Value not on Cost must be assessed from the Managerial Finance point of view, informed by the market dynamics of the offering. This is an immutable principle of business managerial finance, and it must be followed if we have any hope of staying in business. Why Guessing is not Estimating and Estimating is not Guessing. In Software Value of something is totally unrelated to Cost.

Decision Making in the Presence of Uncertainty

Herding Cats

There's another rash of Twitter posters supporting the conjecture that decisions can be made about how to spend other people's money without estimating the impact and outcome of that decision. When it is conjecture decisions can be made in the presence of uncertanty without estimates - like the Original Poster did, and there is no supporting theory, principle, practices, or evidence of how that can be done - run away - it's a bogus claim. . NoEstimates Decision Making Estimating

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Improving portfolio management must be part of an agile transformation

Kiron Bondale

This makes it impossible to accurately estimate capacity during iteration planning and usually contributes to a team missing their iteration commitments resulting in delivery delays.

Agile 183

Project Management Processes & Phases

ProjectManager.com

The project plan will include what resources are needed, financing and materials. Cost: Estimate the costs involved across the project and formulate a budget. Does the business organization where you work feel… a little disorganized ?

The true value of change

The Lazy Project Manager

But again, it is a rough estimate that is needed for this exercise. And finally, estimates of disruption ratio percentage (use the 20% provided if you don’t have a true idea of your own organisations percentage) and failure factor ratio percentage but only for the growth projects.

2017 222

Quote of the Day

Herding Cats

If we replace Aliens and Scientist with Finance and Management and the phrase we can make decisions in the presence of uncertainty without estimating the impact, cost, or schedule of those decisions , we're on the same page.

Revisiting the Double Pendulum Problem

Herding Cats

In the same way the original posters of #NoEstimates state their case that decisions CAN be made without estimating, when in fact that violates microeconomics, managerial finance, and several other principles. Why Guessing is not Estimating and Estimating is not Guessing.

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Quote of the Day

Herding Cats

In the presence of uncertainty (reducible or irreducible), to make decisions, we need to make estimates. These estimates of risk and its impact on the future can be informed by past performance (Reference Class Forecasting) or models of that future performance (Monte Carlo Simulation, Method of Moments, or Parametric modeling). Why Guessing is not Estimating and Estimating is not Guessing. We tend to seek easy, single-factor explanations of success.

How to Create a Project Assumptions List: Examples and Template Included

Project Bliss

Budget – estimated cost of the project. Finances – funding to complete the project. Budget – estimated cost of the project. Finances – funding to complete the project.

2018 206

Releases and Deadlines in Agile

Herding Cats

This is the basis of managerial finance and decision making in the presence of uncertainty - Microeconomics of Decision Making. The other 4 include Bad Estimates for the cost and schedule to reach Done. NoEstimates Capabilities Estimating Planning

Popper, Falsifiability and #NoEstimates

Herding Cats

This is used by #Noestimates by stating I know people who successfully do not estimate. This is common when we read about examples of a decision being made without estimating and a positive result occurred, thus confirming that a decision can be made without an estimate of the outcome.

7 Realistic Ways to Up Your Project Budget Management Skills

Function Point

To improve your time estimates, break projects down into individual tasks (ie. wireframing the website, content mapping the website, copywriting the website, and so on), and estimate the time needed for each item. Finance & Business Operations Manager.

Quote of the Day

Herding Cats

Making decisions in the presence of uncertainty requires estimating the outcomes of those decisions. This is an immutable principle of probabilistic decision making, microeconomics, and managerial finance. Any conjecture claiming decision can be made in the presence of uncertainty without estimates is a fallacy. Why Guessing is not Estimating and Estimating is not Guessing. Herding Cats: Why Estimates are Needed for Success in the Nondeterministic Universe

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