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Techniques
Estimation
• Primarily helpful only for evaluating the current state, via review of as-is
documentation.
• If there is a wide range of sources, the effort may be very time-consuming and
lead to information overload and confusion.
10.19 Estimation
10.19.1 Purpose
Estimation is used by business analysts and other stakeholders to forecast the cost
and effort involved in pursuing a course of action.
10.19.2 Description
Estimation is used to support decision making by predicting attributes such as:
• cost and effort to pursue a
course of action,
• expected solution benefits,
• project cost,
• business performance,
• potential value anticipated from
a solution, and
• costs of creating a solution,
• costs of operating a solution,
• potential risk impact.
The result of estimation is sometimes expressed as a single number. Representing
the results of estimation as a range, with minimum and maximum values along
with probability, may present a higher degree of effectiveness for stakeholders.
This range is referred to as a confidence interval and serves as a measure of the
level of uncertainty. The less information that is available to the estimator, the
wider the confidence interval will be.
Estimation is an iterative process. Estimates are reviewed as more information
becomes available, and are also revised (if appropriate). Many estimation
techniques rely on historical performance records from the organization in order
to calibrate estimates against prior experience. Each estimate can include an
assessment of its associated level of uncertainty.
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10.19.3 Elements
.1 Methods
Various methods of estimation are used for specific situations. In each case it is
important for the estimators to have an agreed-upon description of the elements
to be estimated, often in the form of a work breakdown structure or some other
decomposition of all the work being estimated. When developing and delivering
an estimate, constraints and assumptions also need to be clearly communicated.
Common estimation methods include:
• Top-down: examining the components at a high level in a hierarchical
breakdown.
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