Sep 17

Planning Uncertainty

I came back to Mike Cohn’s great book on Agile Estimating and Planning. The Agile Manifesto that values responding to change over following a plan doesn’t at first seem to warrant a whole book on planning. It still needs to be done – as well illustrated by his quote :

“A good plan violently executed now is better than a perfect plan executed next week.” – General George S. Patton

The book starts with a useful tool for any project manager – “Cone of Uncertainty”:
This clearly shows what we all know:

At the start of the project, when we don’t know exactly what needs to be done, our estimates for the work to be done are the least accurate.

Unfortunately for the hapless Project Manager it’s at start of the project, when the business case for the project is being prepared that accurate estimates are most needed!

Different authors give different vertical scales to this cone of uncertainty, with the upper extreme of estimate accuracy (or should I say inaccuracy?) varying between 1.4 and 4. Some (as I have) also skew the uncertainty toward the high end – on the basis that most things get more complicated, rather than easier than expected.

So what are the lessons for the project manager as he gets drawn into the Cone of Uncertainty?

  • It is essential to communicate to the project board and stakeholders that the initial estimates are inherently less accurate.
  • It is good advice that project managers should always qualify any estimates with a probability: “There is a ninety percent chance this phase will be delivered ontime” – although you may get a reputation for avoiding commitment to deadlines if you do this too much!
  • It shows that the milestones/project checkpoints, particularly before the start of detailed design and development, are essential steps to re-estimate costs and the business case, before committing to the increased expenditure as you get down to detail.
  • If you have a project contingency budget to cover this early uncertainty you may need to review that contingency as the estimating improves, so it doesn’t get spent “covering up” other issues that arise later.
  • It is not an excuse that you should leave all estimating until the end of the project so it will be 100% accurate!

Permanent link to this article: http://transformingfinance.eu/planning-uncertainty/