Parametric Estimating

by David Hinde on 17/03/2016

Hello,

It’s been a while since I wrote a blog, so I hope all is well with you. I have been busy working on some new project leadership development training here in London. I’ll send you some ideas from these courses over the coming months. They include some excellent techniques for building high performing teams; developing leadership characteristics and improving your emotional intelligence.

I have also been busy writing my second book. It’s due out in a few months and I’ll send you a discount code for it then. The book teaches project management skills through a story. A modern-day project manager goes back in time and teaches the ancient Egyptians how to project manage the building of the pyramid at Giza. Here’s a taster excerpt…

Excerpt from the Project Manager and the Pyramid

When I returned home, I thought about how difficult it is to create accurate plans early in a project. At the outset, project teams have the least amount of information about the project. They do not yet have detailed designs for the products or the exact resource requirements. Yet at this point, managers need to know if they can afford the project and finish it before any significant deadlines.

I thought about how we had forecast the pyramid’s construction phase durations. Hemienu had used two parameters — the tonnage of the building and the number of quarry men available — and based on what he had learned from previous projects, he forecast the time it would take to build the pyramid. This is called parametric estimating and is a good approach to use early in projects.

Many industries use parametric estimating models. For example, Kouskoulas and Koehn developed a cost forecasting method for the construction industry. They created a formula that takes six project parameters and calculates the likely unit cost of a building. The parameters include the building’s location, the height, the purpose (for example, a hospital, hotel, or apartment complex), and the quality.

Another example is Sonmez and Ontepoli’s  model for estimating the cost of an urban railway project. By using parameters such as the length of the line, the number of underground stations, and the percentage of the line that will run through tunnels and elevated sections, the model predicts the overall project cost.

A final example is Allan Albrecht’s functional point approach for measuring the size of software systems. The model helps a Project Manager measure the “size” of a system to be built by counting how many different types of functions it contains. An organization can then record how long it takes to build different sizes of systems and use that information to accurately forecast new system builds.

 

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