Easy task estimation with Three-point estimation technique

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Among many tasks performed during the project life cycle, one thing that simply cannot be avoided is the task estimation. Accurate time estimation is a crucial skill in project management, and it affects all the other phases of the project. The project planning is depending on accurate estimation and Stakeholders often judge if a project was successful or not depending on whether it has been delivered on time and on budget.

Task Estimation - Question

Task List

To get to the estimation, we would typically start with defining a task list. In Agile Methodology a task list is called Product or Sprint Backlog, while in general Project Management is known as Work breakdown structure (WBS).

Work breakdown structure is a list of tasks that, if completed, will produce the final product. The way the work is broken down dictates how it will be done. There are many ways to decompose a project into tasks but the point of this blog post is not to go deep into this topic. One thing to keep in mind is that a task we are supposed to estimate has to be SMART (Specific, Measured, Approved, Realistic, Time boxed). In general this rule applies to the Goals and Objectives as well. The consistent application of “SMART” attributes, when defining tasks will result in a clear, measurable and verifiable items.

One rule to keep in mind is: More detailed is the task, easier will be the estimation.

Three-point estimation

Three-Point estimation is just one of the techniques that could be used to estimate a task. There are many other ways, but the simplicity of the Three-point estimation makes it a very useful tool for a Project Manager, Scrum Master or Developer that need to perform the estimation task.

In three-point estimation, three values are produced initially for every task based on prior experience or best-guesses:

  • a = the best-case estimate
  • m = the most likely estimate
  • b = the worst-case estimate.

When estimating a task, we need to provide three values, as specified above. The three values identify what happens in an optimal state, what is the most likely, or what we think it would be the worst case scenario.

Let’s see how to use the above three values….

Double-Triangular Distribution

One known way of using the above parameters is to use the Weighted Average or also known in statistics as double-triangular distribution technique which uses the following formula:

E = (a + 4m + b) / 6

particularity of this method is to put more weight to the “Most Likely” value.

Standard Deviation

As with the above double-triangular distribution formula, in reality we are determining a possible and not a certain value, we may derive another value from it, which is a standard deviation value, that could give us the information about the probability that the estimation is correct.

The formula to calculate the standard deviation in our above case is the following:

SD = (ba)/6

SD value is usually represented with the Greek letter sigma (σ).

The standard deviation is can be represented with the diagram:

(c) Wikipedia

Example

Let’s see this with a concrete example:

We think that in the best case we need 3 days to finish a task, most likely this is going to be 5, but in the worst scenario, in case where we need to perform much more work because not all the details would be provided, we believe that it is going to take 10 days.

a = 3
m = 5
b = 10

By using the formula, this becomes

E = (3 + (4 x 5) + 10) / 6
E = (3 + 20 + 10) / 6
E = 33 / 6
E = 5.5

calculating the standard deviation

SD = (10 – 3) / 6
SD = 7/6
SD = 1.67

Conclusion:

5.5 days would be our estimation for the given task.
By knowing that +-1 sigma represents 68% possibility, we could conclude that:

With confidence of 68% we need from 3.83 to 7.17 days (5.5 +- 1.67) to finish the task.

Triangular Distribution

The second way of estimating the task is known as Triangular Distribution. The difference with the previous method is simply that we don’t have to weight more the Most Likely value. This generates an arithmetic average of the three points.

This is translated with the following formula:

E = (a + m + b) / 3

Example

Let’s apply the calculation to the previous example.

We think that in the best case we need 3 days to finish a task, most likely this is going to be 5, but in the worst scenario, in case where we need to perform much more work because not all the details would be provided, we believe that it is going to take 10 days.

a = 3
m = 5
b = 10

By using the formula, this becomes

E = (3 + 5 + 10) / 3
E = 18 / 3
E = 6

So, 6 days would be our estimation for the given task.

Conclusion

Three-Point Estimation is really a simple technique that could be used to estimate a given task. This is very useful to the Project Manager in order to lower the risk with a non accurate estimation.

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