Project Estimates Using the Cone of Uncertainty

We are in the early months of hurricane season. A storm can start brewing off the west coast of Africa, and in a matter of weeks, turn into a killer hurricane that’s wreaking havoc somewhere in the United States. Is this the time for authorities to evacuate all US coastal regions from the Northeast down to the Gulf of Mexico? Of course not! It’s so early in the life cycle of this storm that there’s no telling where it will end up. 

That’s why meteorologists have developed the “cone of uncertainty” model. As time passes and the storm grows, they run all kinds of scenarios estimating where it will most likely hit. One week before landfall, this cone of uncertainty could cover anywhere from two to three states. However, one hour before landfall, there’s nearly a 100% chance they know exactly where the hurricane will make landfall.  

A similar situation occurs with our projects. For example, a big enterprise-wide project is brewing somewhere in the C-suite of your company. If you’re fortunate, the first question a project sponsor will ask is, “When can this be done?” Or, if you work in most companies, the first statement you will hear is, “This needs to be done by….” 

You now have the same problem meteorologists do in forecasting where and when a hurricane will make landfall. The variance early on in the life cycle of the project could be vast! But your executive team still wants a date. What do you do? 

Below are a few rules of thumb you could apply to help balance the need for certainty with the reality of the unknown. 

• Size it Up - What size is this T-Shirt: small, medium, or large? That’s how many companies provide a range of estimates to project sponsors. For example, if it’s small, it could run anywhere from 3-6 months. A medium project could run 6-12 months, and a large project could range anywhere from 12-18 months. Yes, these are wide ranges, but based upon the information you have been provided, this can be enough information for executives to decide if this is going to be a “this year” or “next year” project delivery date. 
• Compare it to Other Projects - If you’ve been managing projects for a while, you will be able to identify similarities between this project and others you’ve done in the past, such as comparing time spent, number of resources, dollars spent, or any other metric you have available. Side note: Employees typically don’t do a good job of tracking time on projects. They may come up with a guesstimate at the end of each week on how much time they spent, or not report time at all. This is your opportunity to emphasize the need for accurate time reporting, so project estimates aren’t unrealistic in the future. 
• Break It into Smaller Chunks - Going back to estimating when a hurricane will make landfall, meteorologists don’t know where it’s going to be in two weeks. However, they will have a much better feel for where the storm will be tomorrow. Similarly, you won’t have a good sense of when the entire project will be complete, but you can estimate that the Discovery phase (or any phase for that matter) will be done in x months. Once that’s complete, you can estimate the next phase, then the next phase, and so on. 
• Talk to Experts - Another option is to talk with experts who have been there, done that with similar types of projects. For example, it could be an implementation of an HR System and that’s all they specialize in. You can talk with companies and contractors who specialize in that type of work to get a ballpark estimate of how long it will take. They’ll be glad to share that type of information for the chance of gaining your business in the future. 

The challenge for giving any kind of date with certainty is that you don’t know what you don’t know. This is where progressive elaboration comes into play. Every day a hurricane moves forward, its expected path becomes clearer and clearer. The same thing happens each day your project moves forward. Scope becomes clearer, problems get solved, and dates can be set with confidence. 

It’s a delicate dance between business needs and project delivery. Applying the principles above to your estimates will at least get you in the same ballpark, and hopefully not during a hurricane!