What is E, F, G?
E, F, G in alphabetical sequence seems quite interesting. You must think what it stands for? So let’s just quickly get deeper into this.
E stands for estimation, F stands for forecasting, and G stands for guesstimating. In this blog, you will get to know why estimation is important in any field, whether it is a business or even in your daily household budget. And also how forecasting things in advance helps you to do things in a possible better way.
Scenario For Understanding “Forecasting And Estimates”
For describing this I would like to take an example let’s say you want a painter to paint and decorate your house or you want a mechanic to fix all the flaws of your car, so after explaining him your requirements you want him to give you a rough estimate of about how much it will cost you and many hours or days he will take to complete the work. Because you definitely don’t want any uncertainty on time or budget.
So overcoming this thing, you can simply ask him about an approx estimate of the same. This will increase accuracy in your work, and you may receive it at a desired time. However, sometimes the predicted time are not done at the estimated time, few exceptions are expected in this case.
Why do we need estimates?
It is an excellent strategy if you pay proper attention to the need of estimation. Estimation basically helps you to determine whether the proposed project or work you are doing is worth it or not?
You obviously never want your money or energy to go in vain, so by estimating things priorly you at least get an idea that you are stepping in the right direction.
For example, if you are launching a new product in the market, you need to predict first the right time, place or audience to present it. You need to have an estimation about the significant performance of it in the marker beforehand. And by doing this you will also get a rough idea about the plans related to it.
And secondly before launching anything you also need to estimate the total budget including all its necessities in order to escape from the unwanted financial problems as you will then have a rational idea of the total investment.
Estimation Techniques
Mostly the product manager builds a strong and accurate estimate system so that the company does not suffer any sort of loss at the end.
These techniques can be: choosing a Subject Matter Expert (SME) to guess, story point estimation with tracking velocity, sizing, through-put, simulation, cycle time and work in progress. These techniques definitely help in estimation in a better way.
What is an Expert Guess?
It is that option which almost everybody wants to opt for clearing any confusion. It is a guess or prediction that an expert gives as he has already had a subject matter expertise on it.
It is often considered that an estimate given by a respective subject matter expert is fully accurate but according to some research, here if I take this example of “The Planning Fallacy” by Roger Buehler which says that even an expert’s guess cannot be fully correct.
Whereas Douglas Hubbard argues against this research as according to his point of view, the guess made by an expert increases the quality of the estimate. The guess made by them has a significant impact on the quality of the estimate, which is fairly close to the exact estimate.
What is simulation?
It is one of the simplest and the best way to estimate. In this you can measure things to be done week by week in order to have a range of values. People also use statistical simulation, known as the Monte Carlo method, to simulate a lot of results.
You can use it to provide a probability that can be done by a date for all the dates, for example, there is 80% chance that it will be done by the end of February, 20% chance it will be done by half of March, etc.
Simulation is the other name for forecasting, it seems appealing yet rather complex. It would be great if someone could try the results it produces without investing much work into researching all the details.
What is Sizing?
It is another estimation technique which involves the use of sizes for example you must have seen sizes like S, M, L denoting small, medium and large respectively on clothes; so it is nothing but estimation of measurements which would fit to different people according to their body size.
From this you can get rough cost estimates for an investment decision, rough timing for release planning, and enough understanding to assist in story prioritization.
Interesting Read
You can also follow #NoEstimates on twitter for an interesting take on estimation, there you will find a major discussion on the estimation theory.
This discussion just started and has gained attention of many, because the experience of those working on large projects has been that whether you size by story points or just count the number of stories, the tracking of throughput is about the same.
While this makes the part interesting and simple, and enables the delivery team to get on with it quicker; the poor product owners and sponsors still need to know roughly how much it will cost and how long it will take.
The good thing is that you can still do this based on counting the number of stories once you have sufficient metrics to make this work efficiently.
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