When there are numerous unknown factors, the Program Evaluation and Review Technique (PERT) is used to determine the estimated time for activities to be completed. PERT has its roots in the US Navy and has been used for more than 60 years, demonstrating the value it offers to project managers. PERT, a three-point estimating technique used by project managers across industries to forecast activity duration or cost, may be mentioned in questions on the Project Management Professional (PMP®) certification exam offered by the Project Management Institute (PMI).
Three-Point Estimates and PERT
How to calculate a project’s three-point estimate
All project team members should write their optimistic, realistic, and pessimistic estimates for the work required of them and the amount of time it will take to complete when using the three-point estimation technique for your project. From there, you can use the following formula to determine a weighted average of the three points:
What is three-point estimating?
You can create three different estimates using a three-point estimate while taking the risks associated with your projections into account.
The fact that three-point estimation takes project risk into account is one of its main advantages. In addition, team members might be more invested because the project manager took their opinions into consideration.
Example of a three-point estimate
Your optimistic estimate can be 20 minutes, your pessimistic estimate could be 60 minutes, and your realistic estimate would be 40 minutes if you need to catch a flight and travel to the airport via a route that frequently experiences heavy traffic.
Your most accurate estimate using the three-point estimate formula is (20+ [4*40] + 60)/, which equals 40 minutes. Because you took into account the three estimates when calculating this estimate, it will be more accurate.
Your standard deviation in this case would be (60-20)/, which equals 6 7 minutes.
How to use three-point estimating
The final cost estimate for your project will be provided by you as the project manager after taking into account team members’ contributions. The steps below make this process simple and straightforward to carry out:
1. Analyze the task
You must collaborate with your team members to determine the benefits and drawbacks of each task. The best way to guarantee that your project is successful is to identify potential problems and take action to address them. This approach will enable you to make proactive decisions.
2. Prepare data for each estimate
In this step, you’ll ask each member of your team to provide three estimates for the following tasks:
3. Calculate the final estimate and standard deviation
You must use the information gathered to calculate your estimates in this step:
It’s crucial to pay close attention to the mean pessimistic time when making your final estimation. You must prepare an estimation presentation to present the results of your calculations to your team and sponsors.
Finding the percentage accuracy of your three-point estimate is crucial after you’ve finished. The primary objective of the three-point estimation technique, which has a high level of accuracy, is accurate estimates that ensure project success by identifying any potential issues and proactively addressing them.
Advantages of three-point estimating
The three-point estimating technique has several benefits over other project estimation techniques in addition to providing estimates that are more accurate:
Improved task scheduling
Task planning is essential for all projects, but it’s crucial for complex projects where the start and end dates may not be clear. To develop a precise start and end date for the entire project, you can use the start and finish dates of the various tasks.
Minimized and prioritized risk
Three-point estimation helps to reduce the risk of failure and the possibility of an overly pessimistic or overinflated estimate because it provides a more accurate estimate. Once you’ve identified the risks, you can use the three-point estimation technique to analyze and rank them. The optimistic estimate will indicate that there is no risk, while the realistic estimate indicates that there is some risk. The optimistic estimate will indicate that there is a significant likelihood that the risk will materialize.
You shouldn’t propose a fixed project cost to your sponsor or project owner if your project will experience significant deviation. Rather, you should provide a range. Three-point estimation helps get a precise estimate of the project materials, which helps maximize resources and cut costs.
Three-point estimation, like other estimation methods, aids in estimating the project’s duration. By taking into account the pertinent project variables, it provides a realistic assessment of a project’s timeline. If you have a general idea of how long your project will take, you can better plan it and make more informed choices, such as renting additional equipment or hiring more workers.
Tips for using three-point estimating
There are many reasons why projects can fail, and many of them involve inaccurate estimates. Here are a few things you should steer clear of when thinking about your estimates:
What is the three-point estimation technique?
A management technique known as “three-point estimating” uses information currently available to forecast future events and predict their likely outcomes. The three points it evaluates—the best-case estimate, the most likely estimate, and the worst-case estimate—are referred to by the term.
What are the benefits of three-point estimating?
Optimistic Time Estimate (TOPT), Most Likely Time Estimate (TLIKELY), and Pessimistic Time Estimate (TPESS) are the three estimation times used in PERT. For each activity in PERT, these three estimate times are derived.