Hi. My name is Henrik Søndergaard.
We have made this training for you,
if you want to go more into detail about
the estimation technique in The Successive Principle.
In Part 1 we discussed, how you can use it,
who can use it and what can you use it for.
Business cases, plans, budgets etc.
In this video we will go more into detail about
the estimation technique.
We have used a metaphor:
Replacing a tyre on your car.
To explain it.
Here we will explain the process.
We will also explain how it works.
So you can have a better understanding of the method.
Here you see the overall flow diagram.
The method consist of three phases.
A starting phase: Where you collect information
and do your first base estimate.
Next:The successive or iterative estimation phase.
Finally:the reporting phase.
We will go into details, step by step.
First of all, you have to make a
base description of the project.
It's about: External influence
It's about:  Internal influence
It's about: Technical influence in your project.
You're also going to describe your work packages.
One by one.
You collect a small estimation group.
That give a base estimate of your project.
In this case, what is the base estimate
for replacing a tyre, under some given conditions,
stated in this base description.
Here you see two different base cases.
One situation, standing close to my house.
It's in the middle of the day, on a firm ground.
Good temperature, daylight and some extra tools.
Another situation: I'm placed on a field.
It's freezing 8-10 Deg. C and a little windy.
It's dark - and I have to put on some extra clothes
- and gloves.
Then things tends to take longer time.
I guess that you have experienced that projects
depending of the base situation
that was your starting point.
Next you have to collect
a broad spectrum analysis group.
We discuss how to do this and the benefits
in another video.
In the group you have to have
Creative/optimistic people, realistic people,
pessimistic people -
fail founding people.
And also a facilitator.
The role of the facilitator is to ensure,
that you avoid some of the pitfalls that has
been previously identified.
And have to ensure that you have
a sound basis for the estimation.
Here you see the result of a brainstorming
about all the overall issues - 'around the car'.
Let's have a look.
Here you can see the result.
The result is mapped in a 3 by 3 matrix.
(Could be by 2 by 2.)
Are they project related?
Company related? Or external related?
Is it about a technical issue?
A human issue or a financial issue?
The result is mapped out here.
The blue ones can have a negative/positive influence.
The one marked green have mostly a positive
influence and the ones marked red have
mostly a negative influence (to cost, time, quality).
One could  make three point estimation
of all these issues.
But that's not worthwhile doing
- and it gives a wrong result.
What you should do now:
Is grouping these elements into a few groups.
In this case, we have identified three groups.
All these are now grouped collected
into these three groups.
Group 1: Weather & Surface
Group 2: Mental & Physical condition
Group 3: Experiences.
In this way, we're in a much better position
to estimate top-down!
That's much more efficient!
I will demonstrate this later.
For making the calculations, we use a spreadsheet.
The spreadsheet holds two sections.
This sections is about overall factors.
This section is about the tasks.
These are the known tasks - our work packages.
This is unknown unknowns tasks.
We discuss unknown unknowns in another video.
Here we enter the Minimum values.
The Most Likely values and Maximum values
- and do some calculations.
I will demonstrate that in a short while.
(The triple point estimation)
First of all,
let's have a look on the estimation technique.
Here we have a broad spectrum analysis group.
They're going to estimate the overall factor.
In this case: C)Experiences
How can this influence the project (tasks).
The first person gave her
lowest value of 95%.
That is, she foresee that you could
save 5% in best case (Minimum).
She gave her Maximum value of 105%
That is, it could take 5% more on all tasks.
And Most Likely 100%.
In a similar manner
the other persons have giving their estimation input.
Now, we're looking for the lowest Minimum value.
In this case 50%.
The highest Maximum value.
In this case 250%.
Okey, that is that Experiences can have an
influence, where you can save up to 50% of the time.
But, it could also cost up to 150% of the (working) time.
I guess, that most people agree, that there could
a large variance of experiences (influence).
If you have had a car before.
Is it a new car - whatever!
Let's have a look on estimation
of a work package - or a Task if you like.
Here you see a three point estimation of the task.
That is 11)Replace the tyre (in minutes).
Here you see the three point estimation, again.
We're looking for the lowest Minimum value.
That is 1 min.
The highest Maximum values, that's 8 min.
The average of Most Likely is 3 min. in this case.
Let's look into the result of the first estimation loop.
(Here the estimations are entered)
Here you see the result of the overall factors.
The Minimum, Most Likely and Maximum.
In a similar way for the tasks here.
And also unknown unknowns.
Here are the calculated Mean values.
This is a pretty straight forward mathematics
if you assume that all there elements
are mutually independent of each other.
One thing that's very important in this method:
It's the P-factor, the Priority number.
Because the Priority number states where
are the highest uncertainty in the project !
So let's have a a look there.
Here you can see that C) Experiences have an
uncertainty contribution of nearly 62%
The B) Mental & Physical condition have
have a uncertainty contribution of 11%
And 11) Replacement of the Tyre
have a uncertainty contribution of 11%
Let's just focus on the most important ones.
This is one of the smart things in this method!
So we like to subdivide these 3 elements
into to elements each.
Let's have a look.
Here you can see that B) Mental & Physical condition
has been decomposed into: B1) Mental Conditions and
and B2) Physical conditions.
C) Experiences has been decomposed into:
C1) Experiences with cars and
C2) Experiences with tools and mechanics.
11) Replacing the Tyre has been decomposed into:
11a) Demount the Tyre and 11b) Mount the new Tyre.
Now we have to estimate these new elements.
So, let's have a look in the next (estimation) loop.
(Here the estimations are entered)
Here you can see that the group
have entered figures here.
Again, we're looking into the Priority number (P).
We are going for the highest values.
This is C2) Experiences with tools and mechanics
This have a high share of 32%
Then we decompose this into to sub tasks
- or issues, of you like.
(Next estimation figures)
Here you see the result.
The group have entered the figures here.
Now the highest score is
C2.2) Experiences with mechanics.
That is 20.9%
Let's assumed that we're finished now.
Actually you normally run 3-6 loops.
depending of project size and complexity.
Now we like to look into a budget.
(The so-called P-curve)
One of the important results from
this method, is the so-called P-curve.
Here we have the budget in minutes.
Here we have the accumulated probability.
Let's look into P50.
The P50 values is 13.9 min.
That is, there is 50% chance for being below
this budget for Replacing the Tyre.
On the other hand, there's 50% risk
of exceeding this budget.
Let's now assume, that we would like to go
on a holiday with our family in the car.
We're going to catch a plane in the airport.
And we would not be late, because in this case
we could not be able to replace/change the tickets.
So we would like to have a more robust budget, I guess.
Let's go for P84.
This is the Mean value + 1 * standard deviation.
Then there is only 16% risk
of not catching the plane.
The budget will then be 18.3 min.
Aaahh, someone would say in the car, Henrik.
This is not certain enough (budget)!
I will like to have more certainty to reach
the plane, to go on vacation with you guys.
(Asking for higher certainty)
So let's look into P95.
Here you see P95, there's just
5% risk of not catching the plane.
Go down here.
Then you're up to 21.3 min.
Okey.
Then you have to set aside an extra 21.3 min
driving down to the airport.
That could be ok, and you can
even go for a higher confidence (e.g. P99).
Now we like to look into mitigation plans.
Another important result of this method.
This is the Top10 list of uncertainties.
Uncertainties covers booth risks and opportunities.
Let's have a look.
The top one is OF11) Experiences with mechanics:
Holding 20.9 % of the uncertainties.
Next, OF8) Experiences with cars
Holding 17.8 % of the uncertainties.
Then, OF6) Physical conditions
Holding 12.6 % of the uncertainties - etc.
So we would like to make mitigation plans
for each of these Top10 uncertainty elements.
This is an (important) part of the analysis report.
Let's have a look into the analysis report.
Here you see the structure of the analysis report.
Chapter 1: Project description
How does you project look like.
Chapter 2: Project base case
How does your base situation
and base estimate look like
Chapter 3: Analysis objectives.
What are the goals of this analysis.
Chapter 4: Overall issues.
That were identified as groups (as demonstrated).
Chapter 5: Top 10 uncertainties.
As you saw before in the tornado diagram.
Chapter 6: Assumptions.
That are also very important.
Chapter 7: Risks. The risk list.
Chapter 8: Analysis results.
Chapter 9: Mitigation plans.
Chapter 10: Enclosures.
Now the decisions makers are in a much stronger
position of making Robust Budgets,
Plans, Business Cases and Investments.
This have been shown in many cases.
E.g. this method has been used in
Norway public sector since 2000.
More than 80% of the projects are succeding
keeping the (planned) budget and plan.
Interesting!
I'll also like to give attention to three lists.
We'll discuss these three list
in more details in another video.
Normally you'll have the risk list.
Most are familiar with this kind of list.
You should also consider to add a list of Assumptions.
Which kind of assumptions did you actually do -
ins the (estimation) analysis.
Sometimes some of these assumptions slips.
Then you have to do a re-estimation.
You also have to have a list of opportunities!
Why not exploit tat as well?
By having a broad spectrum analysis group
You're in a much better position to go
into the unknowns areas (hatched areas).
To make them smaller and more exploited!
And to benefit your project.
This is also a good way to strengthen
your robustness in your project.
I will also like to mention more about Overall Factors.
What can influence our project.
Outside the work packages (issues).
So let's have a look.
Because, normally 80-90% of uncertainties
is outside (the project) in the beginning.
I have seen this in many of my projects!
Here are some generic examples.
These Overall Factors could be related to:
- Contract type
- Design and change management processes
- Interface control in the company
- Project control in the specific project
- Stakeholder management
- The specific project organisastion
How much experiences does it have? In control?
- The project specific experiences and competencies,
by the members of the project team.
For instance. Imagine that you have a base case,
A product upgrade using in-house experienced people.
Suddenly, the project were threaten, and
the management decided to outsource the project.
Then this method is rather smart.
Because then you still assume the base case.
But you just re-estimate this one!
This - about the project team competencies
and experiences.
In this way, it's much smarter and faster
to do these kinds op upgrading your analysis.
- updating them!
So let's recap....
You have 80-90% of the uncertainties
in the surroundings!
You just have 20-10% in the tasks themselves!
So look here.
And try to search out, what you don't know much about.
Because Professor Jonny Ole Klakegg states:
'You have to discuss: What you don't know'
We're discussing in another video Unknown Unknowns.
In the beginning you can forget the uncertainties here.
That's often a challenge.
Because people are very much engaged in
whatever the like(prefer) to do in the project.
And do not have focus onto uncertainties
outside the project.
But - hold their horses.
You have to look outside as a project manager first.
To be able to gain more control of budget and time plan.
So - If you're having a starting position
Using one point estimations
You were three or fewer people in the estimation.
You were only estimating your tasks!
Then we recommend you
to make some improvements.
Try to use the three point estimation of the tasks.
Try to use a group of 5-8 people.
Try to estimate the Overall Factors.
In this way, you'll get a dramatic increase
in the robustness of your budgets and plans.
I've introduced this in a HW/SW company.
They came from a situation with
one point estimations.
The robustness, was surely not robust!
and they didn't keep (budgets and plans).
Then we introduces this three point method.
And we engaged more people - booth HW and SW
people to go together !
Then they got into a position of
much better budgets and plans!
And they've had more fun
in being together doing this :-)
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