Estimates Are Guesses (and we all know it)
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When it comes to estimates - on some level, everyone is just guessing.
We all know this. You probably know that feeling of sticking your finger in the air and shrugging your shoulders.
Yet for some reason we rarely factor that into our own decision making around estimates from other people.
Whenever you get an estimate - whether from an employee or a contractor - remember that they are just guessing. Hopefully it’s an educated guess… but it’s still a guess.
Don’t pour concrete around it. Plan defensively. Be skeptical. If you get outlier estimates, investigate them. If you get many estimates, calculate the average and the median.
So what should you do about it? Pick something, double it, shrug your shoulders, and be ready to adapt when it turns out to be wrong?
Maybe. It depends on what it is. I firmly believe you shouldn’t get into a project - especially a software project - if you’re not ready for the budget to double. That being said, there are some ways to mitigate the uncertainty.
- Get many estimates and calculate the median.
- Break your project down into the smallest units of value possible - and estimate those.
- Do as much of the legwork as you can yourself. Give your employees or contractors a detailed basis on which to build an estimate.
- Give yourself off-ramps - points at which the project is “good enough.”
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