When to get the "best" estimate?
Take a $5M piping with welding project. Project life is procedurally defined as Study, Design, Implementation and Closeout.
Study will provide Order of Magnitude (sometimes called Conceptual) Estimate. Design improves on that, with a Budgetary Estimate. But the real-deal, the detailed estimate....The one with the lineal feet of pipe, how may elbows, how many field welds etc. is not available until after the PLANNING of the work. Planning is when the actual work orders and task are written, with materials specified. It is the work document that is actually issued to the field for execution.
The problem is, that last step, the detailed estimate is often neglected in a rush to get to implementation and get the work done.
It means that the approved budget was based on the earlier Budgetary Estimate, not a detailed estimate resulting from data collected in planning.
And the resulting cost overruns and forecast variances will be the PMs fault.
Does anyone work with a process that strictly prevents a project from proceeding withoutfull design, planning and estimating producing a fully resource and cost-loaded schedule? With detailed estimates of high quality?
That process must have the teeth needed to resist the influence of senior management to implement work "at-risk" or "fast-tracked" to get pet projects underway to meet a real or percieved deadline.
If you don't have the same troubles I have, what are you doing that is different?
Also... the "fast-tracked" projects are sometimes a ploy to get project approval with a low estimated cost. The thinking is that the estimates at the detailed level will always be higher than the budgetary, so the sponsor figures if he can get approval and ram it through to get started, no-one will stop the project, and he will simply go back for more money later.
Hi nukedaddy. I see this all the time in the oil refining and petrochem sector (with shutdowns / turnarounds). I even wrote a simple paper highlighting the issue:
It's a struggle to change corporate culture to invest in the necessary planning before committing to a final budget estimate.
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Hi nukedaddy, pipeline is a “cutie”, because it is a linear building site, after first five kilometers everybody knows what to do and it repeats in cycles. You can save up to 1/3 from initial, planed execution time.
To achieve that you have to drink beer with your site manager after work.
You have to walk out the entire future layout of the pipe with him and to plan & estimate exactly these places where the pipeline “will go differently” – for example when pipe goes over a river or road; when it makes turns etc. These specific places are breaking the cycle.
So let’s say, that you can estimate with precision cost of the material, work, logistics & mechanization for 1km (or mile in your case). You have to multiply tease sums by the sums of the lengths of all cycles and to add the costs for the “specific places”.
You need the advises from your site manager for the “specific places” because exactly there you risk to exceed the budget.
I’m not typical white collar manager, sometimes I drink a beer with “the boys”.
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