Have you ever been in a situation, where you had to revisit your estimations and adjust them accordingly? I have. Few months ago, I have created a roadmap for some of my projects. However, I didn’t have the time to perform a detailed effort/cost analysis for those projects. Thus, I estimated those projects at very high level, and thought of validating those estimates once the actual project starts. Yesterday, I ended up creating a WBS (work break down structure) for one of the projects, and I found that it might go 60% over our allocated budget. That type of increase will either not be funded at all, or the additional funding will probably require another approved project to be cancelled. Thus, I reassessed my estimations. With this blog, I would like to share my experience through which you can reassess your estimations.
Verify your estimates: Before digging up deep and cutting unnecessary costs, you should verify your estimates. I mostly use Microsoft Project or Microsoft Excel for estimating my projects. If you are using these tools, then I would recommend you to recheck all of your formulae. You should also keep an eye on your resource rates and non-labor costs. Make sure, they are reasonably accurate. If you are convinced that your math is accurate, then you might want to apply another estimating technique to see if you can get down the project cost without making any major changes to the project.
Find other alternatives: Once you are done verifying your estimates, you should then find other less expensive alternatives for all of your resources. For example: if you are counting on contract labor resources, you should see whether they could be replaced with company’s employees. Or if you are proposing new software/hardware as a part of your project, you should see whether your company already has something that will work for you. Or find out opportunities of automation, so that you can reduce the overall cost of the project without compromising on functionalities. And yeah! Make sure to take help from other experienced people in the company. Sometimes, they might come up with the solutions that you might not have thought about.
Negotiate scope of the project: Let’s say, you have tried your best to eliminate any unnecessary costs, but your project is still going over budget. What would you do then? Don’t panic. You can negotiate the scope of your project with your stakeholders. You can talk with your stakeholders, and find out activities/tasks that you can eliminate without majorly affecting project’s deliverables. I would recommend you to start this process by looking at the priority list first. If you recommend to eliminate lower priority items from the project, then your stakeholders are more likely to be in favor of your decision. You might want to defer some low priority tasks/activities, before you can get more funding. This will ensure that you can deliver similar level of functionality without compromising on quality.
I hope these tips will help you to adjust your project estimates properly. Let me know, if you have any other ideas through which you can better adjust your estimates in the project. Thanks. – Bhavin Gandhi