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Activity Duration Estimating

Marc B. Jaoudeh

American Public University

BUSN667: Activity Duration Estimating

Dr. Ken Edick

December 15, 2024

Considerations On the Constraints of Cost and Scope When Estimating Activity Durations

Activity duration estimating, a critical component of project management, involves

determining the time required to complete specific tasks or activities. When estimating activity

durations, project managers must carefully consider the constraints of cost and scope (Chyliński,

2024). Cost constraints can significantly impact duration estimates, as resource allocation and

budget limitations may necessitate adjustments to project timelines. For instance, allocating

fewer resources to an activity may extend its duration, while increasing resource allocation can

potentially expedite its completion. However, it is essential to balance resource allocation with

cost considerations to avoid budget overruns (Roberg, 2020).

Scope constraints also play a crucial role in duration estimation. The complexity and

scope of an activity directly influence the time required for its execution. As the scope of an

activity expands, so too does the estimated duration (StarAgile, 2024). Conversely, reducing the

scope of an activity can lead to shorter durations. Project managers must carefully assess the

impact of scope changes on the overall project timeline and resource allocation.

In addition to cost and scope, other factors that can influence activity duration estimates

include the availability of resources, the complexity of the task, risk factors, and external

dependencies. By carefully considering these factors, project managers can develop realistic and

accurate duration estimates, which are essential for effective project planning and execution

(Westland, 2022).

Primary Benefit in Three-point Duration Estimating

Three-point duration estimating, a technique widely used in project management, involves

assigning three time estimates to each activity: optimistic, pessimistic, and most likely. The
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primary benefit of this approach lies in its ability to provide a more accurate and realistic

assessment of project duration and risk.

Improved Accuracy and Realism

By considering a range of potential outcomes, three-point estimating acknowledges the

inherent uncertainty associated with project activities. This is particularly valuable when

historical data is limited or unavailable, as it allows for a more nuanced understanding of

potential risks and opportunities (Atlassian, 2024). Also, single-point estimates can be influenced

by various biases, such as optimism bias or pessimism bias. Three-point estimating mitigates

these biases by forcing estimators to consider both best-case and worst-case scenarios (Guthrie,

2023). The range of estimates provided by three-point estimating helps identify activities with

high variability or uncertainty. This enables project managers to allocate resources and

contingency plans more effectively, reducing the likelihood of project delays and cost overruns

(Saha, 2023).

Enhanced Decision-Making

When considering the range of possible durations, project managers can allocate

resources more efficiently. For example, if an activity has a wide range of potential durations,

additional resources may be allocated to expedite its completion (Guthrie, 2023). Also, three-

point estimating helps identify potential risks and uncertainties, allowing project managers to

develop appropriate contingency plans. This proactive approach can help minimize the impact of

unforeseen events on the project timeline and budget. While providing a range of potential

outcomes, three-point estimating can help project managers communicate more effectively with

stakeholders. This transparency can build trust and confidence in the project team's ability to

deliver on time and within budget (Saha, 2023).

Enhanced Project Control

Monitoring the actual performance of activities against their estimated ranges, project

managers can identify potential issues early on (Atlassian, 2024). This allows for timely

corrective actions to be taken, preventing small problems from escalating into larger issues.

Three-point estimating provides a more granular view of project progress, enabling project

managers to track performance more accurately (Saha, 2023). This can help identify bottlenecks

and areas where additional resources or attention may be required.

The Use of Contingency Estimating

Contingency estimating, a pivotal practice in project management, involves allocating funds to

mitigate unforeseen risks and uncertainties that may arise during a project's lifecycle. By

establishing a financial buffer, contingency estimating safeguards projects from potential

disruptions, delays, and cost overruns (Roberg, 2020). The primary objective of contingency

estimating is to enhance project resilience and ensure successful outcomes, even in the face of

unexpected challenges.

The determination of appropriate contingency amounts necessitates a comprehensive

analysis of various factors. One common approach is the percentage-based method, where a

predetermined percentage of the total project cost is allocated as contingency (Guthrie, 2023).

While this method offers simplicity, it may not accurately reflect the specific risks inherent to a

particular project. A more refined approach is the risk-based method, which involves identifying

and assessing individual risks, then allocating contingency funds based on their likelihood and

potential impact (Guthrie, 2023). Additionally, historical data analysis can provide valuable

insights into past projects, enabling the estimation of contingency based on similar experiences.
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By effectively implementing contingency estimating, project managers can significantly

bolster their ability to deliver projects on time and within budget (StarAgile, 2024). A well-

defined contingency plan, coupled with proactive risk management strategies, empowers project

teams to respond effectively to unforeseen challenges and maintain project momentum.

Moreover, transparent communication with stakeholders regarding the contingency fund and its

utilization fosters trust and confidence in the project's success (Roberg, 2020).

Constraints in Using the Top-down Versus Bottom-up Approach in Duration Estimating

Top-down and bottom-up approaches are two primary methods for estimating activity durations

in project management. While both offer unique advantages, they also come with inherent

constraints that can impact the accuracy and reliability of the estimates (Westland, 2022).

The top-down approach, which involves breaking down the project into major work

packages and estimating their durations based on historical data or expert judgment, is often

criticized for its lack of granular detail (Waldow, 2021). This can lead to inaccurate estimates,

particularly for complex projects with numerous dependencies and uncertainties (Saha, 2023).

Additionally, the top-down approach may not adequately account for unforeseen challenges or

changes in project scope, which can significantly impact the overall project timeline.

On the other hand, the bottom-up approach, which involves estimating the duration of

individual work packages and then aggregating them to determine the overall project duration, is

more time-consuming and resource-intensive. It requires a high level of detail and expertise,

which may not be feasible for large-scale projects with limited resources (Roberg, 2020).

Moreover, the bottom-up approach can be susceptible to optimistic bias, as individuals may

underestimate the time required to complete their tasks.

To mitigate the constraints associated with both approaches, project managers often

employ a hybrid approach that combines the strengths of both top-down and bottom-up methods

(Chyliński, 2024). This involves using the top-down approach to develop a high-level estimate

and then refining it through a more detailed bottom-up analysis of critical work packages. By

carefully considering the specific characteristics of the project, such as its complexity, risk

profile, and available resources, project managers can select the most appropriate estimation

technique and minimize the associated constraints (Waldow, 2021).

Top-down and bottom-up approaches are two primary methods for estimating activity

durations in project management. While top-down is faster but less accurate, bottom-up is more

accurate but time-consuming. To balance these, a hybrid approach combining both is often used.

Project managers should carefully consider the project's specific characteristics to choose the

best estimation technique.

Project Estimation Considerations in Regulated Industries

Project estimation in highly regulated industries, such as healthcare, finance, and energy,

presents a significant challenge due to the dynamic nature of regulatory environments. These

industries are subject to frequent changes in standards, compliance requirements, and

technological advancements, which can significantly impact project scope, timeline, and budget

(Roberg, 2020). To effectively manage projects in such sectors, project managers must adopt a

proactive approach that accounts for these complexities (Medium, 2024).

A critical consideration is the continuous monitoring of the regulatory landscape. By

staying informed about regulatory changes and their potential impact, project managers can

make informed decisions and adjust project plans accordingly (Roberg, 2020). Additionally,

robust risk management practices are essential to identify, assess, and mitigate risks associated
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with regulatory changes. Agile project management methodologies, with their iterative and

adaptive nature, can also be beneficial in responding to evolving regulatory requirements.

Furthermore, engaging regulatory experts and industry professionals can provide valuable

insights and guidance. By effectively addressing these factors, project managers can enhance the

accuracy of their estimates, reduce the impact of regulatory changes, and improve overall project

performance (Medium, 2024).

References

Atlassian. (2024). Project estimation: Methods & best practices. Atlassian.

https://www.atlassian.com/de/work-management/project-management/project-estimation

Chyliński, A. (2024, October 17). How to manage budget changes and improve cost estimates .

Teacode.io. https://www.teacode.io/blog/project-efficiency

Guthrie, G. (2023, March 17). How 3-point estimating can improve project planning and

resource allocation. Nulab. https://nulab.com/learn/project-management/3-point-

estimating/

Medium. (2024, March 27). Agile methodology: Flexibility and efficiency in project

management. Medium. https://medium.com/@MakeComputerScienceGreatAgain/agile-

methodology-flexibility-and-efficiency-in-project-management-eda8bc1c6201

Roberg, O. (2020, May 5). The impact of scope management on project success. Safran.com.

https://www.safran.com/blog/why-scope-management-is-essential-for-project-success

Saha, K. (2023, August 25). Guide to three-point estimation technique in project management |

unichrone. Unichrone Blog. https://unichrone.com/blog/project-management/what-is-

three-point-estimation-technique/

StarAgile. (2024, October 28). Activity duration estimates in project management. Staragile.com.

https://staragile.com/blog/activity-duration-estimates

Waldow, D. (2021, March 15). Bottom-Up vs. top-down project management 101. Monday.com

Blog. https://monday.com/blog/project-management/bottom-up-vs-top-down-project-

management/
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Westland, J. (2022, January 17). The triple constraint in project management: Time, scope &

cost. ProjectManager.com. https://www.projectmanager.com/blog/triple-constraint-

project-management-time-scope-cost