All about estimate

When we do not know what is gonna happen, we panic; sometimes in order not to be completely acting like elementary organisms, we guess.

In essence, we will not possibly know what is like in the future (if we do, there won't be one). A project is a means to explore certain unknown and provide solution consequently. Sometimes we succeeded, other times we lose miserably. To succeed in a project, there are hundreds of things must go right, out of which, the estimate. It might be too convenient to generalise the action we take when confronting with unknown as estimating. By doing so, however, we could possibly take a peek at where and how estimate comes from and what should we do about it and how should we use it to help us.

As being said, we cast our conjecture or theory on things we do not know for sure and then hope the dice would be hit, with bit of luck. Making an estimate is just as difficult as doing the work itself, if not much more. When there is a problem, based on analysis of the problem itself, past experience, consultancy advice, we offer our best guess. One thing people do realise and start to put more and more focus on is the approach with which the estimate is made, i.e. with the same information, how do we estimate something is probably going to happen - probability of the estimate or simply saying, treating estimate as a function of multiple random variables. Scientifically, techniques such as three-point estimate not only give us the range of estimate but also provide the confidence level associated. Although there is a fundamental flaw in such method is the assumption of independence of variables normally doesn't apply. Anyway, the estimation approach is not what I am going to talk about here, although I have already used half of the space...

Can we estimate? If positive, why do we need? If we do need, how do we use it? If we do know how to use it, how much confidence we have with it? What happen if it goes miles wrong? Do we need to update it with newest information? What does it mean by hitting the budget and endless of delay? (This question ladder should really start from another "do we need an estimate?" but as we all know that normally being answered straightaway as positive.)

Yes, I think we can and have to estimate, otherwise walking in a mist is not going to help anyone, especially those who hold they hands and await for the return of their money. Everything kicks off and depends on the esitmate, believe it or not, no matter engineering or manufacturing, purchasing or selling.

We need estimate to plan for the unknown, what should happen is that most of our plans should go from paper to bin very quickly. We need estimate to decide actions. We use estimate to de-/convince people and persuade resource and investment of interests to the good side of our belief.

The confidence level of an estimate depends on the source of the estimate as much as the approach we took to achieve it. Estimate should never be A number. You have already put everything you have on the edge and tipping your toe into a gambling game if you do. Confidence of an estimate is more important than the estimate itself, as suggested by Entropy theory. In the unfortunate but most likely situation, things didn't go as planned, (which is one of the main reasons estimate is defeated, assuming people know how to estimate.) the last thing we need is being pessimistic and throw the baby away with the bath water. Looking at whether it does fall in the possibility range you had and what is the thing really happened and triggered the domino. To find the root cause of effects would be most likely helping us get back to the game - by updating the estimate and re-do the homework, when I say homework, I mean it, on daily basis. It is also not extreme that some cases this happens on hourly basis.

Hitting the budget is always a nice thing to have. In common sense, hitting a budget mostly means management is doing a good job in planning and managing. To me, hitting a budget doesn't means you get on the train at the last minute just before the conductor closes the door. The reason why I say it is that hitting budget itself is actually funcationally irrelevant. A project is about capability and experience (in financial terms) dealing with unexpected events. A budget is made trying to measure the degree of unexpected events. It has fundamental means to play with while in nature random. Sometime if hitting budget as a target overrules logic thinking and long term view in decision making pivot, it will pay for itself in an ironical way. If you hear people complaining about the endless delay of a project compared against its original estimate, be careful, firstly you should probably ask is how the estimate gets made and when it was the last time we update the estimate. Finally, my killing question - Is there any change of scope to what we have been estimating against?