When your company does “strategic” planning or yearly budget planning, do they come to you and want you to estimate the expense budget, the capital budget, the headcount and schedule for one or more projects in a single day? How do you do this quickly and but still come up with estimates that you can live with?
The first thing to remember is that this comes up on a yearly cycle, so if they came to you last November, they’ll be back again this November. Remembering this might give you a little notice and time to do your homework. Set a reminder in your calendar that November is “planning month.”
Another important item is to know how much detail your company wants as part of this planning. For example, a larger business unit might want rough estimates for many projects so they can add them up and extrapolate resource levels (expenses, capital, headcount, etc.) in general for the business and worry less about the detail of each project. If this is their desire, your job is a bit easier since you want reasonable Scientific Wild-Ass Guesses (SWAGs) rather than fully detailed project plans. However, the emphasis is on “Scientific,” not the WAG.
On the other hand, if the company is asking for schedules that they will use as benchmarks on the projects yet to be started or even fully-scoped, then the problem is much more challenging. Think of this case as “Extreme Project Planning.” To do this well requires a solid methodology and some focused time from the business unit.
One way to do a reasonable SWAG is as follows (with a small, experienced team):
• Write up a brief scope of each project, describing the key features and goals. Identify a first pass on any known-risk items.
• Imagine the team work roles (number and type of individual) that will be needed and likely availability given present projects already in motion. Put this in a spreadsheet for the next year (or whatever the horizon is) per role, with a percentage of each person’s role spent in each month.
• Add it up. The sum with be the FTE engineers needed in each month. You can multiply this by the average cost per FTE engineer month based on present actuals (total expense dollars spent this year / total FTE). This is a useful number to keep on hand for ballpark planning.
• Now you have staffing needs and rough schedule (don’t forget to use a most-likely schedule rather than best-case and take into account realistic hiring or staffing timeframes). For capital, you can best use examples from projects similar to the ones proposed – tooling, NRE, etc.
• I then put the scope from above and the derived schedules, staffing needs, capital, etc. onto a one-page pro-forma data sheet and make sure that it is submitted with the rest of the material. It documents the logic used to make the estimate and mentions any key risks or assumptions.
Later, when everyone has a different opinion about what was committed to, this documentation can be very useful. The project may change and be re-scoped, but this snapshot details what the basis of the estimate submitted was. Make sure it is dated and time-stamped. Mark it confidential. Review it with your marketing product manager or other key stakeholders.
For the Extreme Project Planning case, the SWAG steps outlined above still work, but you must also really dig into more detail on project goals, product features as well as staffing and technical risks. Otherwise you will be held accountable without having done the due diligence needed. You seldom have time to do a detailed project plan with WBS and complete PERT analysis. Having good metrics from similar projects can help a lot, but only if they are comparable to the proposed project.
I found that the SWAG method could be used for planning multiple projects over multiple years, and then be updated as each budget cycle approached or the actual project start neared. By then you often know more about the features, goals and risks, so an update and more detailed planning is appropriate.
At Hewlett Packard, beginning in the 1980s, they instituted a 10-step business planning process that allocated time throughout the year to do the homework (data gathering, analysis and so forth) in small discrete steps rather than take a month off at the most critical time of year to do all the work (often poorly).
Please comment with other or better approaches, especially for "Extreme Project Planning.". There’s always a better way!
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Matt Glei is a contributing blogger to the ProjectConnections' blog. ProjectConnections is a corporate sponsor of the Engineering Leadership SIG. This entry was reposted with the permission of Matt Glei.
Matt is also owner of Know-how Consulting in Honolulu, Hawaii. This consultancy provides performance coaching in areas such as collaboration, knowledge management, intellectual property, virtual teams, program, project and risk management.
Matt also has long experience in product development, project portfolios and strategic planning. Matt has also developed several Quality Systems, compliant with ISO and FDA guidelines.
Matt is certified as a Project Management Professional by PMI and is a Certified Scrum Master.
Matt has spent his 30-year career in high technology and medical product development and operations. His background includes significant periods in Research & Development, Operations as well as Marketing. His career includes 5-person start-ups, all the way to 350 M$ high-volume businesses with thousands of employees. As different as these company situations appear, the fundamental performance problems remain the same.
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