How to Create the Three-Point Estimation of a Project

To come up with a realistic project estimation is one of the major headaches almost every project manager faces. Although there are many tips on how to get an accurate project estimation, this process is still a guesswork.

How to calculate 3 Point Estimate of a Project

Most projects fail because of poor estimation

Most projects fail because of poor estimation. There are several reasons for this.

1. False Comparison

Estimations based on actual data from people who have successfully run similar projects in the past are more reliable than estimations from self-proclaimed experts who haven’t actually performed similar projects themselves.

2. Inaccurate Precision

This becomes a problem when a project estimation is represented by one figure. Estimation can’t be accurate in the planning stage, so the figures should be given in ranges—from the lowest to the highest.

3. Shoehorned Estimations

In fact, every estimation should be done by people who actually do the work. If someone else outside a project team creates a predetermined timeline, that is bad for a project success.

4. Subjective Estimation

Have you ever looked at an estimation and wondered where it came from? That is the type of estimation we are talking about here. It is absolutely unjustified and looks as if it came out of nowhere.

5. Poor Coordination

If an estimation doesn’t take into account the team members’ involvement in the project, well-developed communication, and coordination, crucial errors occur that may cause a project failure.

The three-point estimation technique

Identifying the reasons why a project can go wrong helps to find ways to prevent a failure. The three-point estimation technique, or PERT—Program (Project) Evaluation and Review Technique, is considered a worthy estimation tool that helps a product manager to take some proactive decisions.

  • It gives insight into risks associated with each subtask in the project.
  • That’s not 100% accurate, but it is close to it when compared with other estimation methods.
  • The influence of team members is increased since this method takes into account their opinion.

How It Works

The three-point estimation technique is called so basically because your team members need to write down realistic, pessimistic, and optimistic amount of time and work needed to deliver their part of the project. A product manager needs this data to create the final project estimation.

The process is fairly simple. Now let’s consider some steps.

Step 1

Work individually with each member of a project team to identify all the negative (bad) and positive risks associated with their tasks.

Step 2

Ask them to do three estimates:

Pessimistic (P). It is the average time needed to complete the task in the worst scenario considering all the problems that might occur.

Optimistic (O). It is the average time needed to complete the task in the best scenario and as soon as possible.

Realistic (R). It is also called the most likely estimate. It is the average time needed to finish the task considering the expertise. It’s a cross between the best and the worst scenarios.

Step 3

Here you need to do some simple mathematical calculations:

Mean Time = (O + 4R + P) ÷ 6

Standard Deviation = (Р – О)/6

Mean Optimistic Time = Mean Time – Standard Deviation

Mean Pessimistic Time = Mean Time + Standard Deviation

Keep in mind that Mean Pessimistic Time is an indicator you need to pay attention to when creating a final estimation.

Conclusions

The bad news is that it is not 100% accurate, but the good news is that it is close enough to 100%. If the three-point estimation is done correctly, the project is halfway to success. And what are your favorite estimation techniques? Write them in the comments.

Need to start a project?

Contact Us

Similar Posts

Live Streaming Apps: Your A-Z Guide Live Streaming Apps: Your A-Z Guide

Due to COVID-19, live streaming apps became one...

9 Legal Issues That Stand Behind NFTs 9 Legal Issues That Stand Behind NFTs

On June 10, 2021, Sotheby’s sold a masked...

NFT Services: Top 10 Business Ideas That Will Take Off NFT Services: Top 10 Business Ideas That Will Take Off

All the craze around NFT services and shocking...

Yield Farming in DeFi: A Complete Guide Yield Farming in DeFi: A Complete Guide

Yield farming (YF) in decentralized finance (DeFi) has...

UX Design: 18 Novel Ways to Differentiate in 2022 UX Design: 18 Novel Ways to Differentiate in 2022

While COVID-19 continues disrupting life as we know,...

12 Impressive Hospitality Trends to Watch in 2022 12 Impressive Hospitality Trends to Watch in 2022

COVID-19 has caused ripples in the hospitality pond...

Top 10 Business Challenges to Watch in 2021-2022 and How to Overcome Them Top 10 Business Challenges to Watch in 2021-2022 and How to Overcome Them

The events of 2020 influenced all industries and...

Telehealth Solutions: Top 15 Trends for 2022 Telehealth Solutions: Top 15 Trends for 2022

By treating nicotine addiction, doctors bring people back...

How to Build a Geolocation App: Steps, Features, and Key Industry Insights How to Build a Geolocation App: Steps, Features, and Key Industry Insights

Today, geolocation apps revolutionize the digital services market....