Do You Need to Re-estimate Your Whole Project?

Estimating projects is never easy. There are too many variables. Team performance can be inconsistent. And even with sound risk management, issues arise. These variables can require adjustments to estimates for part of a project. Sometimes, re-estimating the entire project might be in order. Here are circumstances when a complete project re-estimation is in order.

• Scope changes by more than 20%. In managing project change, you examine the implications of a single proposed change and propose whether to approve or reject the change based on its cost and benefits. Each change is evaluated on its individual merits. What doesn’t occur is an overall evaluation of the project after many changes have been approved. Multiple changes can increase risk and complexity and the need for personnel and contract management. So, if your project has increased by 20% or more from its original scope, it’s time to re-estimate the remaining project work to assess the aggregate impact of all the changes. That way, you ensure the project is still appropriate for the business.
• Critical team members change. In most projects, there will be business and/or technical team members who are critical to success. If a critical team member changes, you might consider re-estimating the project. You might need multiple people to replace that team member. Or the replacement will be an expensive contracted resource. Either way, you might end up with significant unplanned costs. The replacement resource might take longer to deliver their assignments due to a lack of internal business knowledge. Re-estimating after critical personnel changes ensures realistic expectations for the project.
• The project has varied by 30% or more from your initial project estimate. Don’t continue to use an estimate that isn’t accurate enough. If you’re variance is over 30% from your original estimate, it’s time to re-evaluate the project’s viability. Revisit all your estimates. Use the difference between actual performance and your estimates to revise remaining work estimates. Look for opportunities to cut scope. While you want to deliver value to offset the money you have spent, it may not be feasible. The project should continue only if future spending will justify the business value.
• The project intent changes. Projects can go a different direction due to business strategy changes. Or a change of sponsor can alter your project’s direction. The priority of requirements can change or new requirements arise. The team members and project name are the same, but you could be managing a very different project. If so, it’s time to re-estimate! Evaluate risks and examine the tasks needed to meet the revised expectations, so you can verify that the altered project can meet business expectations.

Have you ever re-estimated an entire project? If so, why, and how did that turn out. Share with us in the comments section. 

For more about estimating, check out my Project Management Foundations course.