Project Outputs: Activity List Updates

Project activity lists, which are elements of the project management process, may sometimes have to be updated after activity duration estimating is completed. In some cases, after activity duration estimating, an activity may be divided, or otherwise redefined, in order to show the correct logical relationships. Dividing or redefining an activity might cause it to take longer to complete. In other cases, the change will cause the activity to take less time than originally estimated.

The activity list must be updated to reflect these changes, since the duration of the activity will be affected. These activity list updates are important outputs of activity duration estimating.

For example, an activity list included writing code for a software project as one activity required to complete a project. Upon completion of the activity duration estimating process, it was found that the coding activity should be split up into three separate activities—developing interfaces, scripting, and testing. The activity list needed to be updated to reflect the change in the original activity.

The estimated duration for the original activity, writing code, also needed to be updated. The project manager used the tools and techniques of activity duration estimating to obtain estimates for the three new activities.

Updating the activity list is an important process for a project manager because it:

• helps the project manager create a more accurate schedule
• ensures that all team members are informed.

Remember, activity list updates are valuable outputs of the project activity duration estimating process, since they help project managers create more accurate schedules and keep team members informed.

Project Outputs: Basis of Estimates

Assumptions are factors that project managers consider to be true, real, or certain. It is fine for project managers to make assumptions based on strong evidence and past experience, but baseless assumptions can be dangerous.

Therefore, project managers must always document what factors or facts they based their assumptions on. This documentation is known as basis of estimates, and is an output of activity duration estimating. The basis of estimates will include any assumptions that are related to activity duration estimating.

Consider the example of Sharon, a project manager for a major automobile manufacturer. She is working on her company's latest design, a sleek sports car.

Sharon, in preparing her activity duration estimates, made two assumptions. She assumed that new equipment would increase productivity by 10 percent. She also assumed that profit would increase by 22 percent over last year. Sharon makes the following decisions about these assumptions.

• Productivity. The productivity increase will affect the estimates for activity duration. An increase can result in shorter activity duration, so Sharon will include this assumption in her basis of estimates.

• Profits. The profit increase will not affect the estimates, so Sharon will not include this assumption in her basis of estimates.

The basis of any estimates made during the activity duration estimating process must be documented in the project files. Any assumptions also should be included. There are two important reasons why basis of estimates should be documented for a project.

• They serve as historical data on similar projects.
• They ensure that everyone on the project has the same information.

Remember, any assumptions made on a project must be documented. Just because one person assumes something, doesn't mean that everyone will make that same assumption. The basis of estimates provides documentation for your assumptions and is an important output of project activity duration estimating.

Project Outputs: Activity Duration Estimates

As a project manager, you can help ensure the success of your project by recognizing and understanding the various outputs of activity duration estimating. One of those outputs are the activity duration estimates themselves.

Activity duration estimates are quantitative assessments of the likely number of work periods (usually days) required to complete an activity. Project managers use activity duration estimates as a basis for scheduling time and resources for a project.

Activity duration estimates are derived from the Work Breakdown Structure (WBS). Use the WBS to determine which activities are involved in completing the project. Then, using the tools and techniques of activity duration estimating, prepare estimates for activity duration.

The estimates should include optimistic, most likely, and pessimistic estimates, listed in that order. For example, an activity that could be completed in as few as 10 days (an optimistic estimate), will most likely take 12 days to complete (the most likely estimate), but could take as long as 16 days (a pessimistic estimate).

Only the optimistic and pessimistic estimates are used by project managers to create a range of possible results. These results become your activity duration estimates, or valid durations. Valid durations are estimates arrived at using the tools and techniques of activity duration estimating.

You also should calculate the probability of the estimates being correct. Since you're working with estimates and not actual outcomes, you won't be able to use formulas for calculating probability. Instead, you should use other techniques, such as expert judgment or analogous estimating.

For example, using expert judgment, a project manager estimated that there is a 15 percent probability of an activity exceeding three weeks and an 85 percent probability of it taking less than three weeks.

Activity duration estimates form the backbone of the project schedule. Properly prepared estimates will lead to a better schedule—and a better schedule will help lead to a successful project.

Project Activity Duration Reserve Time

You've probably heard of the Army Reserves. The Reserves are made up of citizens who are trained as soldiers and who can be called upon in situations that demand extra resources.

Similarly, reserve time is added to project activity durations to provide the extra time that may be needed based on identified risks. Risks can affect the project schedule and cause delays. Reserve time helps offset such delays.

Reserve time should be documented along with other data and assumptions relating to the project. Reserve time, like other assumptions, is contingent on project results and subject to change as the project progresses. Two methods you can use to determine reserve time are discussed below.

1. As a percentage of activity duration
Reserve time is normally calculated as a percentage of the estimated activity duration. Using this method, reserve time can be calculated by simply adding an extra percentage to each activity duration estimate.

Reserve time can be reduced or eliminated as specific project information becomes available. Its use is at the discretion of the project team and is normally guided by expert judgment or historical information.

Consider this example. You are managing a road construction project and you have estimated that it will take you 50 days to build an overpass. After consulting with one of your lead engineers, an expert on highway construction, you decide to add an additional 20 percent to the duration estimate as reserve time.

To calculate the reserve time as a percentage of the estimated activity duration, you simply multiply your duration of 50 days by 20 percent. The reserve time for this activity is 10 days.

2. As a fixed number of work periods
Another approach to creating reserve time involves simply tacking on an additional fixed number of work periods to the current estimates for each activity. Work periods are often measured in days, but may vary by project.

Let's say you're managing a similar road construction project and you have estimated once again that it will take you 50 days to build an overpass. This time, though, after reviewing historical information on similar projects, you decide to calculate the reserve time by adding five additional work periods, or days, to your estimate.

If you take into account your reserve time of five work periods, your adjusted activity duration estimate for building the overpass would be 55 days.

Whether you decide to determine reserve time as a percentage of the estimated activity duration or as a fixed number of work periods, make sure you consult with a team member who is familiar with the given activity. This will help ensure that the reserve time you decide upon is as accurate as possible.

When performing activity duration estimates for your project, remember to allow for reserve time to accommodate circumstances that could interrupt or delay the progress of your project activities.

Project Tools: Quantitatively-based Durations

If you had five lawns to mow and you knew it took you about an hour to mow one lawn, then how long would it take you to mow all five? Pretty simple, right? Well, that's how easy it is to use quantitatively-based durations to estimate project activity durations.

Quantitatively-based durations are often the simplest types of estimates to make, provided you have accurate activity information with which to work. The two types of activity information required to calculate quantitatively-based durations are quantities of work and productivity unit rates.

• Quantities of work to be performed refers to work amounts. Some examples of quantities of work to be performed for each activity are number of graphics, meters of cable, and tons of sand.

• Productivity unit rates refers to the length of time required to complete a fixed amount of work. Examples of productivity unit rates include hours per graphic, meters of cable per hour, and tons of sand per day.

Consider the example of a contractor who is building a new overpass as part of a highway project. Based on the size of the overpass, the project manager knows that she will require about 40 tons of concrete to complete the project. Since she will be working with a crew that she has worked with before, she knows it will take around five days to pour each ton of concrete.
In the example above, 40 tons of concrete represents the quantity of work, while the productivity unit rate for the project is five days per ton of concrete.

Understanding quantities of work to be performed for each activity and productivity unit rates provides useful information to project managers. This information is useful because it provides the data required to perform quantitatively-based duration calculations.

Quantitatively-based durations are calculated by multiplying the quantities of work to be performed for each activity by their productivity unit rates.

Remember, quantitatively-based durations can help you perform activity duration estimates, which can help you avoid surprises that could throw off your project schedule.

Project Tools: Analogous Estimating

One of the tools you can use for project activity duration estimating is analogous estimating. The dictionary defines analogous as "being similar in some particular way."

Think of the similarities between the human brain and a computer. One of the similarities is that they both process and store information. The similarities between the human brain and a computer make them analogous.

Project managers can use similarities between project activities when they are estimating activity duration. This technique of using similarities is called analogous estimating and involves the use of the actual duration of a previous, similar activity as the basis for estimating the duration of a future activity.

Sometimes referred to as top-down estimating, analogous estimating is used when there is a limited amount of detailed information about the project. This is especially true in the early phases of project planning.

Analogous estimating saves project managers time and money because it enables them to avoid the cost of hiring experts. However, project managers must be careful when using this tool. It is most reliable when:

• both activities are similar in fact and appearance
• the individuals preparing the estimates have the needed expertise.

Analogous estimating can be a powerful tool when used properly. When using this tool, always ensure that the two projects are similar in appearance and fact. Also, make sure that the person who performs the estimates has the necessary experience. Analogous estimating can help you ensure that you accurately estimate the duration of project activities.

Expert Judgment and Project Activities

Project managers can use the special skills or knowledge of experts when activity duration estimating. This is known as the expert judgment process. It involves consulting with groups or individuals with specialized knowledge or training. These people can provide ideas and the probability of occurrence based on experience. There are four sources of expert judgment available to help you on your project.

• Other units or departments within the performing organization. Ideally, this is the best place to obtain expert judgment. It can be obtained at no cost to you. For example, if you need to know how long it takes to assemble an automobile, you can ask someone who works on the assembly line.

• Consultants. Consultants can be hired from outside the company to serve as experts for a project. However, this source is expensive and can cause costs to rise on a project. For example, a company that specializes in natural gas may be hired to consult on a pipeline project.

• Professional and technical associations. Professional and technical groups can provide expert judgment when the information needed is very detailed or technical. For example, if you need to know what the building code is for a residential home, you could ask the local builders association.

• Industry groups. Industry groups can offer general information. For example, if you need to know how long it takes for cement to cure, a construction group would be able to answer your question.

Once you've determine which expert or group of experts can help you during activity duration estimating, you can use three techniques to obtain the expert judgment you need.

• Interviews. Interviews can be on a one-to-one or a many-to-one basis. Interviews are conducted by asking a series of questions that will increase your knowledge of the project or a particular project activity.

• Brainstorming. Brainstorming works by getting a group to focus on a problem and then coming up with as many solutions as possible. Once the session has resulted in a number of solutions, the results can be analyzed.

• Historical data. Historical data uses the knowledge gained on a similar past project activity to obtain duration estimates for each activity associated with a current project.

While a certain technique might be appropriate in some situations, in others the same technique wouldn't give you the information you need. Interviews are best used when knowledgeable, experienced people are available at an affordable cost and specific information is needed, while brainstorming is best used when input from multiple experts is needed or when experienced people aren't available. Historical data is best used when records are accurate and both projects are similar.
There are many advantages to using the expert judgment technique for estimating activity duration. The advantages are that it:

• allows for different perspectives
• makes valuable use of prior knowledge and experience
• helps you find creative solutions
• helps you avoid re-inventing the wheel.

Expert judgment, like so many things, also has disadvantages. You have to be careful when using expert judgment, because it can be time consuming. It also can tie up experienced staff for many hours, to the detriment of other projects.
In addition, expert judgment can be costly if you have to go outside your company to hire experts. Another disadvantage is that experts may tend to downplay the fact that an activity took longer than expected on past projects.

Used wisely, though, expert judgment is a powerful and invaluable tool for estimating activity duration. It allows for different perspectives and more creative solutions. Most importantly, when you use expert judgment, your team will be less likely to re-invent the wheel.

Project Risk and Activity Duration Estimating

It has been said that "sometimes the greatest risk is not taking one." Whether this is true or not depends on how much of a risk-taker you are as a project manager. If you are aware of your project's identified risks, you will be better able to perform your project activity duration estimates.

Identified risks can affect activity durations considerably. You should take the impact of identified risks into account when performing activity duration estimates to improve the accuracy of the project schedule. There are two main factors to consider when assessing the identified risks. These two factors are discussed below.

1. Is the risk a threat or an opportunity?
Risks are generally perceived in one of two ways—as threats or opportunities. Threats are risks that may have adverse effects on project activities. Opportunities are risks that may have favorable effects on project activities.

Deciding whether a risk represents a threat or an opportunity can help you perform activity duration estimates. Activity durations will not necessarily change based on whether you perceive risks as threats or as opportunities. However, your perception will likely impact your willingness to put up with the effects the risks may have on your activity durations.

2. Does the risk have a high or a low probability of occurring?
The relationship between a risk's probability and its potential impact on activity duration estimates is directly proportional. This means:

• high probability = high potential impact
• low probability = low potential impact.

One of the most effective ways to assess the probability of identified risks is to examine historical information. Information from previous projects can help project managers gauge the probability of risks occurring on current projects.
The project team must decide the extent to which the effect of risk should be considered in the baseline estimates for each activity. If the effect of identified risks is not taken into account, activity durations could take longer than expected. Be aware of the effects of a project's identified risks, and help keep the project's schedule on track.

A project's identified risks can have significant impact on activity durations, so remember to consider risks when formulating your activity duration estimates.

Historical Information and Project Activities

Historical information is an invaluable input to project activity duration estimating. As a project manager, you can use historical information, in the form of past project data, to make estimates on current similar projects.

For example, on a past project, John's company, Quick-as-a-Wink Computer Consultants, took five days to complete the audio for a two-hour software project. Based on this previous experience, John estimates it will also take five days for audio on the current two-hour software project.

There are many sources of historical information available to a project manager. You can start by checking the following three sources.

1. Project files
Past project files provide a fountain of information for project managers. A company may maintain records of previous project results that are detailed enough to aid in developing future duration estimates.

For example, John needs to know how long it will take to install a hub for a computer network system. John remembers installing a similar hub on a previous project. By retrieving the previous project files, John is able to find the information he needs. Since the first hub took 11 days to install, John will plan for 11 days on the current hub installation project.

2. Commercial duration estimating databases
Historical information is also available commercially through databases. These databases tend to be extremely useful when the activity duration is not driven by the actual work content.

For example, John needs to determine how long it takes a government agency to respond to a request for a license. John can contact a commercial duration estimating database company, which keeps information of this type on file. For a fee, the company will sell the information to John.

3. Project team knowledge
Another source for historical information is individual project team members who have worked on a similar project in the past. They can sometimes provide estimates of how long it took to complete the previous activity.

Remember, historical information can be a powerful tool for project managers. Don't be condemned to repeat the past. Instead, learn from it by using historical information.

Resource Requirements and Project Activities

How many people does it take to install a computer network, write a user's manual, or analyze a customer's needs? What equipment is needed to deliver a training session? These questions may not be pertinent to every project, but it's important for you to know what physical resources it will take to complete any activity related to your project.

Physical resources can include any or all of the resources listed below, depending on the nature of the project.

• People. This is the most important resource of all. It is also the most diverse resource the manager has to deal with. People come with a wide variety of skills. The manager's job is to match the possible skill sets with the project tasks.

• Facilities. Facilities are where the project activities will be performed. The project manager has to take into account what kind and how many of these facilities are required. Availability of facilities can have a big impact on the project schedule and has to be taken into account.

• Equipment. Specialized equipment may be needed for some projects. This equipment may have to be bought, rented, borrowed, or built. The project manager has to make sure that the equipment will be available according to plan.

• Materials. If a project produces anything tangible, the raw materials to produce the product need to be managed. Materials have to be managed to ensure they are available when needed.

Project managers should develop a list of all the resources needed to complete a project. This list is known as "resource requirements." Resource requirements are descriptions of the types of resources required and quantities needed for each element of the work breakdown structure and are important inputs to activity duration estimating.
Resource capabilities are another input you should consider when estimating activity duration. Resource capabilities can have a direct effect on an activity's duration. For example, a person with more experience and skills will complete a job faster than someone who is unskilled.

The capacity of the materials used for a project also will affect an activity's duration. For example, a machine that runs at only 50 percent capacity will take twice as long to complete the activity as a machine that runs at full capacity.

Resource capabilities not only affect the duration of an activity, but they can also affect the resource requirements. For example, if workers are unskilled, more of them will be needed to complete a project on time. If workers have more experience, fewer people will be needed.

As a project manager, you should look at all aspects of a project's resources when estimating activity duration. Remember, resource capabilities can have a far-reaching effect on the duration of a project activity.

Constraints, Assumptions, and Project Activities

The PMBOK Guide describes a constraint as "anything that can limit the project management team's options." If a constraint is going to limit you, wouldn't it be better to completely avoid it?

Of course it would. Unfortunately, you cannot always avoid constraints, which can create risk. Therefore, project managers should learn to handle constraints—which are inputs to activity duration estimating—so their effects on a project are minimal.

There are two major types of constraints that a project manager must consider when determining the duration of an activity—imposed dates, which are required, and major milestones, which are requested.

• An imposed date is a date that cannot be changed and must be met by the project team.

• A major milestone is a project activity that upon completion will be delivered to the client.

Another input to project activity duration estimating is assumptions. Assumptions are factors that are considered to be true, real, or certain. Over the course of the project, these factors may turn out to be true or false.
Project managers should be extremely careful when making assumptions about a project. Assumptions carry a degree of risk and should be used only when the degree of certainty about the assumption is high.

Remember, constraints and assumptions can cause a risk to your project. With proper planning, you can minimize or avoid the impact of the risk.

Using Activity Lists for Project Management

Are you the type of person who makes a list so you don't forget anything? Lists are great: They help you to remember any items that you consider important.

Managers can use lists when planning a project. Lists help managers remember any items that are important for the completion of a project. One such list, used by project managers, is the activity list.

An activity list is a description of all the activities that will be performed during a project. It is a helpful input to activity duration estimating for a project.

As a project manager, you can use an activity list to provide your project team members with a detailed description of all activities they will perform on a project. This description helps project team members understand how the work is to be done.

The activity list is actually an extension of the work breakdown structure (WBS). The WBS is a hierarchical list of what must be done to complete the project. Like the activity list, it includes a description of each of the project deliverables and activities, so that the project team members will understand how the work is to be done. The layout of the WBS includes details about the following elements:

• the overall program
• the specific project
• the project's deliverables
• the activities involved in completing the deliverables.
  

Project managers use the WBS when creating their activity lists to ensure that the list is complete, and that all necessary activities are identified for each deliverable. The WBS also ensures that any activities that are not required as part of the project scope are excluded.
The activity list, like the WBS, should include descriptions of each activity. This ensures that the project team members understand their jobs and do them as required.

Remember, an activity list is a great way of remembering all of the activities that must be performed during a project. In addition, project managers can use this input to determine which activities are involved in the project when estimating activity duration.