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These are the user uploaded subtitles that are being translated: 1 1 00:00:00,903 --> 00:00:03,078 And now we have all the deliverables 2 2 00:00:03,078 --> 00:00:04,700 and the precedence diagram showing 3 3 00:00:04,700 --> 00:00:05,960 how they come together, 4 4 00:00:05,960 --> 00:00:07,102 it's the right time to ask 5 5 00:00:07,102 --> 00:00:10,353 deliverable owners to estimate them. 6 6 00:00:10,353 --> 00:00:13,453 Few people enjoy estimating at first, 7 7 00:00:13,453 --> 00:00:15,057 as it just seems to be an opportunity 8 8 00:00:15,057 --> 00:00:17,468 to be wrong some day. 9 9 00:00:17,468 --> 00:00:19,645 However, with a bit of practice, 10 10 00:00:19,645 --> 00:00:22,894 most people actually do start to like it, 11 11 00:00:22,894 --> 00:00:25,354 since it (A) gives them control 12 12 00:00:25,354 --> 00:00:26,752 over the estimate, 13 13 00:00:26,752 --> 00:00:29,452 and (B) as they get better at it, 14 14 00:00:29,452 --> 00:00:31,917 they want to see how close they can get. 15 15 00:00:31,917 --> 00:00:35,590 Here are some best practices that can help. 16 16 00:00:35,590 --> 00:00:39,173 There are five basic methods of estimating. 17 17 00:00:40,064 --> 00:00:42,153 First, analogous. 18 18 00:00:42,153 --> 00:00:46,028 By analogy, or comparison to something similar. 19 19 00:00:46,028 --> 00:00:48,901 Often used for the plus or minus 100% estimate 20 20 00:00:48,901 --> 00:00:51,174 in the initiation stage. 21 21 00:00:51,174 --> 00:00:53,219 For example, this project is about twice 22 22 00:00:53,219 --> 00:00:55,587 as complicated as that project, so we estimate 23 23 00:00:55,587 --> 00:00:59,054 twice as much time and cost for this one. 24 24 00:00:59,054 --> 00:01:03,059 Historical, where you use hard estimating data 25 25 00:01:03,059 --> 00:01:05,115 from past experience. 26 26 00:01:05,115 --> 00:01:07,034 For example, it costs X dollars to paint 27 27 00:01:07,034 --> 00:01:09,579 100 square meters, so it will cost about 28 28 00:01:09,579 --> 00:01:13,412 80 times as much to paint 8,000 square meters. 29 29 00:01:14,971 --> 00:01:16,778 Then there's PERT and the very closely 30 30 00:01:16,778 --> 00:01:18,574 related three-point. 31 31 00:01:18,574 --> 00:01:20,060 The PERT and related straight three-point 32 32 00:01:20,060 --> 00:01:22,329 method estimates the best case, 33 33 00:01:22,329 --> 00:01:24,662 most likely, and worst case, 34 34 00:01:26,174 --> 00:01:27,829 and then averages the numbers. 35 35 00:01:27,829 --> 00:01:29,806 It's much better than a single point guess, 36 36 00:01:29,806 --> 00:01:33,389 as we'll see in an example in later slides. 37 37 00:01:34,360 --> 00:01:36,455 Then there's Delphi, where you ask 38 38 00:01:36,455 --> 00:01:40,757 several experts, have them compare their responses, 39 39 00:01:40,757 --> 00:01:42,989 and discuss the reasons for their different estimates. 40 40 00:01:42,989 --> 00:01:46,607 And iterate until consensus is reached. 41 41 00:01:46,607 --> 00:01:48,857 This method can be used for anything, 42 42 00:01:48,857 --> 00:01:50,921 however, it's used most often for estimating 43 43 00:01:50,921 --> 00:01:53,296 risk percentage and time, as we'll see 44 44 00:01:53,296 --> 00:01:54,629 in later slides. 45 45 00:01:55,895 --> 00:01:59,111 And then finally, activity breakdown. 46 46 00:01:59,111 --> 00:02:02,262 The best method of all for deliverable estimation. 47 47 00:02:02,262 --> 00:02:04,702 When the owner of a deliverable breaks it down 48 48 00:02:04,702 --> 00:02:06,715 into the activities required to implement it, 49 49 00:02:06,715 --> 00:02:09,621 estimates the activities individually, 50 50 00:02:09,621 --> 00:02:11,748 and rolls them up. 51 51 00:02:11,748 --> 00:02:14,598 We'll take a look at some examples soon. 52 52 00:02:14,598 --> 00:02:16,983 Activity breakdown is by far the best 53 53 00:02:16,983 --> 00:02:19,448 estimating method for deliverables. 54 54 00:02:19,448 --> 00:02:21,296 And is really required for any project 55 55 00:02:21,296 --> 00:02:23,095 where a final planning accuracy of plus or minus 56 56 00:02:23,095 --> 00:02:26,178 10% is desired, for two reasons. 57 57 00:02:27,589 --> 00:02:31,095 First, only by thinking through the activities 58 58 00:02:31,095 --> 00:02:32,864 required to create the deliverable, 59 59 00:02:32,864 --> 00:02:36,312 can the true cost and time be identified. 60 60 00:02:36,312 --> 00:02:37,998 Humans can keep at most four things 61 61 00:02:37,998 --> 00:02:40,613 in their mind at once, and so can't see 62 62 00:02:40,613 --> 00:02:43,889 the detail unless they think it through, 63 63 00:02:43,889 --> 00:02:46,051 otherwise, they will most certainly underestimate 64 64 00:02:46,051 --> 00:02:49,102 the amount of work required. 65 65 00:02:49,102 --> 00:02:52,342 And second, you benefit from a magic property 66 66 00:02:52,342 --> 00:02:53,827 of statistics. 67 67 00:02:53,827 --> 00:02:55,563 The sum of the estimates of the activities 68 68 00:02:55,563 --> 00:02:58,056 at the deliverable level is more accurate 69 69 00:02:58,056 --> 00:03:00,828 than the estimate of any single activity 70 70 00:03:00,828 --> 00:03:04,697 because some of the error cancels out. 71 71 00:03:04,697 --> 00:03:06,146 Let's take a closer look at this 72 72 00:03:06,146 --> 00:03:07,646 in the next slide. 5992