This chapter touches on best practices for estimating projects and being prepared for inevitable change requests. Get ready to learn a whole new set of project estimation techniques because youâre about to become the best project estimator in the business.
Estimating the number of hours a project will take is one of the most important, and often most difficult, aspects of project management. An accurate project hour estimate allows you to develop a realistic schedule and budget, manage client expectations effectively, and ensure your team has the capacity to deliver.
On the other hand, underestimating hours leads to unhealthy overtime team burnout, and blown budgets while overestimating means lost profits and disappointed clients.
To walk through the project hour estimation process step-by-step, we’ll use an example website redesign project.
Step 1: Review Project Scope
The first step is gaining a clear understanding of what’s included in the project’s scope
For our website redesign example, the scope includes:
- Audit and analysis of existing website
- Creation of new sitemaps and user flows
- Design of 5 new page templates
- Development of 20 static HTML pages
- Copywriting for all 20 pages (about 3,000 words total)
- Search engine optimization review and recommendations
- Creation of one marketing email template
- Testing across browsers and mobile devices
Having a clearly defined scope ensures you don’t miss any required tasks in your estimate.
Step 2: Create a List of Tasks
Next, break down the scope into tangible, specific tasks. Avoid large, vague tasks like “Develop website”.
For our example project, key tasks would be:
- Review analytics and assess existing content
- Interview stakeholders
- Create sitemap
- Design home page layout
- Design interior page templates
- Write content for About Us page
- Code up About Us page in HTML/CSS
- Export email template HTML
- Cross-browser testing
And so on for every component of the project. Really drill down to a granular level here.
Step 3: Collect Data for Each Task
Now that you have a task list, determine how long each one will take. Reference similar tasks from past projects to make this as accurate as possible.
Some ways to estimate task duration:
- Expert judgment: Consult someone who has done the task before and can estimate time needed based on experience.
- Historical data: Review actual hours spent on the same or similar tasks in previous projects.
- Three-point estimating: Create optimistic, pessimistic, and most likely time estimates, then average them.
- Productivity metrics: Use hourly production rates like 500 words per hour for writing or 15 function points per month for programming.
Document your time estimate and the justification for each task.
Step 4: Include External Hours
Don’t forget that some project work may be completed by external team members or contractors. Be sure to include their estimated hours in your calculations.
For our website redesign, we need to account for:
- 10 hours of developer time to configure the marketing email template in the ESP
- 15 hours of QA testing time provided by an external testing resource
Step 5: Consider Revision Hours
Most projects require time for reviews, testing, and subsequent revisions after the initial work is complete. Build in an estimate for these revision hours.
For our 20-page website, I’ll estimate:
- 5 hours for stakeholders to review and provide feedback on page drafts
- 10 hours to update the pages based on stakeholder feedback
- 8 hours for QA testing and bug fixing based on errors found
Step 6: Consider Adding Contingency Hours
No matter how carefully you estimate, unknowns and unforeseen challenges often arise on projects. It’s smart to add a project contingency buffer to your estimate.
Common contingency percentages are 10-20% of the overall estimated hours. I’ll add 20% contingency to my website redesign as there are likely to be some technology unknowns.
Step 7: Add All Components Together
Now add up the estimates for all your individual tasks, external hours, revisions, and contingencies.
For our website project example, the estimate breakdown looks like:
- Tasks (audit, planning, design, content, development, testing): 152 hours
- External hours (developer, QA): 25 hours
- Revisions (stakeholder reviews, QA testing): 23 hours
- Contingency at 20%: 40 hours
Total project estimate: 240 hours
I would round this up slightly to 250 hours for a nice round number to share with the client.
Step 8: Review and Revise the Estimate
Share your estimate with team members and stakeholders to spot any missed considerations.
It can also be helpful to complete this estimation exercise twice, with a few days between each, and compare the results. See if your estimates are aligned, which helps validate your assumptions.
Revisit and revise the estimate as needed if you get new information related to project scope, technical approaches, resource availability, or other assumptions.
Best Practices for Accurate Estimates
Follow these tips for reliable project hour forecasts:
Break it down
Decompose work into small tasks to make estimating easier and more precise.
Gather real data
Use time tracking data from past projects to make your estimates data-driven vs guessing.
Avoid padding
Build trust by estimating transparently vs inflating time arbitrarily.
Account for the unexpected
Add contingency for unknowns but don’t go overboard. 10-20% is usually sufficient.
Get multiple perspectives
Leverage team members’ expertise to improve estimate accuracy.
Estimate twice
Complete estimates independently and compare results to confirm assumptions.
Document assumptions
Note what factors influence the estimate, like staff experience levels or technical complexity.
Update as you go
Adjust estimates as more information becomes available throughout the project.
Prioritize accuracy
Spend time upfront ensuring a solid estimate vs rushing through it.
Benefits of Accurate Project Hour Estimates
Getting project time estimates right has many advantages:
- Sets realistic schedules and budgets
- Allows optimal resource planning
- Keeps team workload reasonable
- Reduces overtime and burnout
- Improves client trust and satisfaction
- Minimizes financial risk
Ultimately, solid project hour estimates lead to healthy, successful projects and happier teams and clients.
Estimating is an imprecise science, but following a methodical approach makes it possible to forecast project hours with sufficient accuracy to reduce risk and maximize success. Use the steps in this guide to hone your estimation skills and deliver projects seamlessly.
What is project estimation?
Project estimation is the process of forecasting the time, cost, and resources needed to deliver a project. It typically happens during project initiation and/or planning and takes the projectâs scope, deadlines, and potential risks into account.
Estimating projects and tasks in TeamGantt
Letâs take a closer look at how hourly estimation works in TeamGantt so you know how to add and assign estimates to your tasks and teams.
How to Estimate Project Time and Cost | TeamGantt
How do I estimate project hours?
The first step in estimating project hours is reviewing the project’s scope or overall purpose. This can help you get a better understanding of the project and all tasks involved. The scope statement may also contain information related to deadlines or budget constraints. This can help you create and refine your estimate.
How to estimate time for a project?
When estimating time for activities, you should choose an estimation technique that suits your project. Estimation techniques allow you to assign an accurate time value to each task in the project. Meaning you won’t just have to use “gut instinct”. Here are the top 4 estimation methods:
Why should you use project hours estimate?
You may also use the project hours estimate to create budgets and cost estimations. The effort hours can help you determine how many professionals you need to complete a task on time, which can help you calculate hourly wages as an expected cost. By designing accurate budgets and deadlines, you may create more accurate project plans.
How do I use a time estimate?
Apply a time estimate to each component in your WBS. If you estimate your projects based on units—whether it be weeks, days, or hours—using a WBS will help you quickly understand if your project estimate will exceed the intended budget. Let’s take our project estimation example further and assign estimated hours to each step.
