Delivery team estimation
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Accurate estimation is critical for successful project delivery, and it plays a key role in the sales and retained services processes. This section will provide essential insights and strategies to improve your estimation skills.
The following diagram will help you understand the sequence of events that occur when a request is made to the Delivery Team. You can view and interact in to access the Request Flow diagram in more detail.
The estimation cycle comprises both non-billable and billable phases, each with its unique considerations and best practices.
Quickly Estimate: In the non-billable phases, the goal is to provide an initial estimate as quickly as possible to customers or stakeholders. This estimate should be based on high-level information, such as known requirements, scope, and assumptions. It's important to avoid spending excessive time on detailed estimates at this stage and focus on providing a rough order of magnitude (ROM) or ballpark estimate. An estimated range is helpful at this stage to communicate to the customer that the work is largely undefined and requires additional discovery and definition as the tasks come into focus.
Get Feedback: Once the initial estimate is provided, it's essential to actively seek feedback from the team and the customer. This can involve soliciting input on assumptions, potential risks, and uncertainties and clarifying any questions or concerns. Feedback from all stakeholders helps refine the estimate and align expectations early.
Iterate: Based on the feedback received, the estimate may need to be iterated multiple times to reflect changes in scope, assumptions, or risks. It's important to be flexible and open to adjustments as the requirements evolve. Regular communication and collaboration with the team and the customer are key to refining the estimate during the non-billable phases.
Initial Approval: In the non-billable phase, the customer should tentatively approve the high-level estimate with the understanding that the estimate will be refined in the Billable Phase (for new projects) or monitored during the execution (for retainer approvals) to ensure it stays within the given estimated range. This allows for flexibility in adjusting the estimate as the project progresses and provides a basis for moving forward.
Detailed Estimation: Depending on the project, detailed estimation may take place for a Statement of Work (SOW) or during the Planning Phase of an initiated project. The objective during this stage is to refine the initial estimate into a more detailed and granular estimate by breaking down the work into smaller tasks, identifying dependencies, and considering various factors such as resources, timeline, and risks.
Continued Approvals: At each project milestone, the customer will approve the provided deliverables with the understanding that the work will continue to evolve within the allocated budget and time.
Monitoring and Adjustment: It's crucial to continuously monitor the budget burn for any project to ensure it aligns with the original estimation, assumptions, and tasks communicated to the customer. If adjustments are needed, work should pause while the customer is promptly notified, provided with a revised estimate, and new approval is obtained before proceeding with development. This helps to maintain transparency, manage expectations, and avoid any surprises regarding project costs so that the project stays on track and within the agreed-upon budget.
Change Orders: Changes in project scope or requirements after the initial estimate may require new estimation efforts. Change orders and scope changes should be properly assessed, estimated, and documented — considering the impact on resources, timeline, and budget.
Prioritize speed in providing initial estimates during non-billable phases to avoid unnecessary delays in the sales and approval process.
Actively seek feedback from the team and the customer to incorporate their inputs into the estimate and ensure alignment.
Be open to iterations and adjustments based on changing requirements, assumptions, or risks.
Maintain clear documentation of all estimate versions and changes made to track the evolution of the estimate.
Use the Monday Project template to outline, estimate and document assumptions.
Estimates should be in progressively larger increments based on the complexity of the requirement. Consider scales such as 2, 4, 8, 16, 24, 32, 40, 60, 80+ hours for ROMs. Individual tasks should be broken down into no more than four-hour increments during detailed estimation.
