Decide Whether Your Estimate Should Include Client Cost and Effort

Client effort includes the time to review and approve deliverables, provide requirements, attend meetings, participate in training, etc. Some companies want to understand the total effort and cost of a project, including both the direct project team and the client resource requirements. In other companies, the project costs only include the direct project team. Whether you include client hours and cost in your estimate is an area you should discuss with your manager and your sponsor. If your project estimate includes client hours and cost, the hours need to be kept separately. Although the combined number provides a better overall estimate, the project manager normally is not responsible for the client resources and so he should not be held accountable for achieving those particular targets.

Be Prepared if Others Think Your Estimate is Too High

After you have prepared your estimate, you may need to defend it if the client thinks that the numbers are too high. You should be able to first defend the estimate by explaining the estimating techniques you used, the process you followed and the assumptions you made. If the client still thinks the numbers are too high, or cannot afford the solution at that cost, there are a few options.

* Determine if the client has any additional information that would allow you to revise your assumptions and perhaps revise the estimate. For instance, if a critical end-date now has some flexibility, perhaps the estimate can be revised based on this new information.
* Determine whether high-level requirements and functionality can be scaled back. In many cases, the original set of features and functions is more of a wish list. After seeing a price tag, it is very possible that the client can live without certain features.
* If you included a high contingency to reflect a high estimating risk, ask the client for more time to gather more detail for the estimate. This may result in there being less uncertainty and risk, and allow you to reflect this as a smaller contingency.
* Restructure the project to only include the detailed analysis phase. After the full analysis is completed, re-estimate the remainder of the project, based on a confirmation of exactly what is being requested. The total effort and cost may or may not be lower, but at least you will have more detailed information to back up your estimate.

Back up Your Estimates with a Full Estimating Packet

The next time you are asked to provide an estimate for a major piece of work, consider presenting a packet of information. This does not have to be a thick document; it is only meant to show the rigor that you went through. You should especially consider this if the work is political or if you think that your estimate will not be accepted. Rather than just providing a final estimate, or an estimate range, provide the following information instead.

* Your understanding of the work that was requested
* The process you used to prepare the estimate
* The estimating technique(s) you used
* The actual estimate of the work effort (and duration and cost, if applicable)
* The detailed estimating information in case the sponsor would like to review. For instance, if you did a Work Breakdown Structure, you can include your detailed work estimates
* The assumptions you made in developing the estimate
* The level of uncertainty in the numbers that is reflected in the contingency or the size of the estimating range (more uncertainty is reflected in a wider range)

This would be a powerful packet of information to return to the requestor. If there were disagreements with your estimate, this would give you the facts to respond. It will also stop many challenges because people will have difficulty disputing your facts. You may get asked to change your estimating assumptions or to try another estimating technique. These are legitimate requests and you can re-estimate based on new criteria. But at least the challenges are in terms of the estimating process, not on whether you did a poor job on the estimate itself.