Resource Management

The First Phase of the Resource Management Lifecycle: Estimate

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The Resource Management Lifecycle begins with the Estimate Phase and is dedicated to setting your project up for success. Estimation occurs prior to the start of a project and is intended to ensure that the project is proposed to an organization or team.


What is The Estimate Phase?

The Estimate Phase is the first phase of the Resource Management Lifecycle. This concept is introduced in our most recent ebook, The Definitive Guide to Resource Managment. Here we will discuss the details of Phase 1, Estimation. 

Resource estimates typically start at a high level, since they have less certainty around the exact details of the project. Individuals in sales and project management begin to identify the roles necessary for the project. For example, you would initially identify the roles required, as well as the high-level deliverables before you can compare those needs with your capacity. By roles, we are referring to job title or position such as engineer, project manager, or designer.

According to Gartner, “The initial, high-level resource capacity function uses a broad-brush, relatively nonspecific process that needs to be done first.”

If you dedicate too much time to the Estimate Phase, there is a chance the project is never won and time and resources are wasted. On the other hand, if you dedicate no time to the Estimate Phase, there is a good chance you won’t have the necessary roles or resources on deck. The key is to find a happy medium during this phase in order to adequately prepare your team or organization for a project.

Therefore, the goal of the Estimate Phase is to adjust variables that will allow you to predict the feasibility and profitability of a completed project. When done properly, this frees up time for project managers to fill in the more granular activities later down the lifecycle, and you are better prepared to respond to changes when they arise at any point throughout the project.

Information Required in the Estimate Phase:

1. High-level scope and information about the service being provided.

Such as: skills required, necessary experience, and estimation details (time, difficulty, or effort level).

2. Key variables involved in the scope.

This includes: milestones, specific resources, and dates that are being committed to the client in the project agreement.

3. Availability of required roles.

This is also known as capacity, to work on the project in the proposed timeframe, and their associated costs. 

4. Client’s price sensitivity. 

Determine the price that the client will likely agree to for you to win this deal.

5. Other key projects.

That are currently occurring, or scheduled to occur, at your organization, as some may conflict or overlap.

6. Insight into historical data.

Look to similar past projects or tasks for accurate planning.

This is the time to figure out what resources will be necessary for the project to be successful and what the appropriate fees are to ensure profitability, as well as signoff by the client. Once the requirements for the project are communicated, you can begin to estimate the types and amount of roles required for a given project.

Step-by-Step Guide to the Estimate Phase

1. Start by setting standards on when you should start resourcing your projects.

In other words, determine your confidence level. A confidence level is the probability that a project is actually going to happen. Every company varies when it comes to what confidence level spurs the start of resource planning. It’s important to get this timing right so you don’t spin wheels planning for projects that never come to fruition.

2. Determine the level of detail required for your estimates.

If there’s high variance between your project plans and your actuals on completed projects, you may want to go into a bit more depth on future estimates.

3. Now you can define the project scope.

Here, you will to understand what types of roles are required on this project and if you have the capacity to fill the demand at this point in time.

4. Estimation doesn’t actually end at the Estimate Phase.

You can get additional value from the process of estimation by using it to optimize success throughout the project lifecycle. That is, you can increase the success and profitability of future, similar projects by comparing how your estimates compared to your actuals. More on this later.

Potential Roadblocks and Challenges During The Estimate Phase

1. Pressure to close.

The sales team may be pressuring the estimation team to minimize the costs associated with the project in order to close a deal. However, if you fail to adequately estimate the resources required for a project, the chances of successfully delivering your service are low.

2. Poor estimation.

Many leaders fail to recognize the importance of proper estimation in projects.

3. Lack of visibility into available resources.

Often, organizations don’t have proper pro- cesses or systems to see what new projects may be coming and which resources may be available to meet demand when they may need them. This is especially an issue when there is a lack of CRM integration.

4. Increased demand.

As the number of service organizations grow, so do the number of resources and projects. Previous methods will no longer suffice.

Tips for the Estimate Phase

1. Involve the right people.

Dependent on the organization, a number of different individuals may be valuable for resource estimation; this could be a project manager, account executive, or business development representative, to name a few.

2. Prepare for change.

Due to the nature of the services industry, change is inevitable and ad-hoc conflicts will occur. Expect resource demands to change and project requirements to shift, but ensure that you are not chaotically moving around resources when this does happen.

3. Learn from the past.

Use lessons from past clients and like projects to hone your estimates.

4. Don’t spread your resources too thin.

Ensure you have enough resource flexibility in case conflicts arise during the Execution Phase.

5. Estimate at a high level.

The Estimate Phase allows you to get an understanding of your resource needs and what it will take to deliver a profitable project. Investing too much time in granular details, too early, is wasteful, as those details will get more refined and solidified the closer you are to project execution.

To learn more about the Resource Management Lifecycle, download our free Definitive Guide to Resource Management!

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