The Estimation Game: Do not confuse cost with size

The cost of a project is a function of how big it is.  That isn't really a hard thing to understand... you'd think.  When I say this to a PM, they usually say "sure" with that look that says "say something interesting now." 

Yet, when you ask for the cost of a new project, by providing a set of requirements, how many of those Project Managers respond by asking "how big is it?"  Not nearly enough.

That should be the first question.  The conversation between the customer (Tom), the PM (Mary) and the Analyst (Wang) should go like this: 

Tom: I want you to create a new report on our site for Acme Manufacturing to use.  Their CEO mentioned the need for one to our CEO over a game of exploding golf.

Mary: Can you write down what this report will look like for me, Tom?

Tom: I knew you'd ask, Mary.  Here's an example.

Mary: Thank you Tom. (Turns to Wang)  Wang: how big is this project?

Wang: (goes away and returns an hour later) The project is 130 Implementation Units, Mary.

Mary: Thank you, Wang.  I will type the number '130' into my estimation model.

Wang: Don't you want me to tell you how long it will take?

Mary: That's OK, Wang.  I can figure that out.  You see, the last time I asked you for a size, you told me that the project was 165 units.  That project took 16 days.  The model says that this project will take about 13 days.  See?

Wang: That's pretty cool.  I'm glad we decided, last year, to chose an industry-standard definition of an 'Implementation Unit.' 

Mary: Me, too, Wang.  You see, it wouldn't matter if I asked you or Amy or Naveen.  All three of you would have calculated the size the same way, and my model would figure out the cost.  No need for guesswork, and the estimate is always the same.

Wang: and it's more accurate too.

Mary: Yep.  It's been right on the last six projects.

Wang: what a change that is.  I'm glad to be out of the business of guessing 'time.'  Calculating the size of requirements is analytical. I'm an analytical person.  It's easy for me to do, and you get the numbers you need.

Mary: (calling Tom on the phone) Hi Tom

Tom: Hi Mary.  So how long will it take to produce this report.

Mary: Sixteen to Nineteen work days.  Better say an even month.

Tom: Your estimates on the last few projects was "right on the mark."  I trust you. 

This is not a fantasy.  While the conversation is fictional, this kind of interaction has happened many times and will happen repeatedly for folks like Mary.  She uses estimation tools, and she understands the distinction between Cost and Size.  Do you?