Resource Estimation in Project Management: Ultimate Guide
As a small business, the success of your projects is detrimental to your success. Unfortunately, over 50% of projects fail. Developing better project management skills is key to ensuring the success of future projects.
But where do you start? Resource estimation is an integral part of project management that often gets overlooked. Here’s your guide to resource estimation in project management and other factors, such as resource costs. You’ll also learn why WorkOtter will benefit with this process.
What Is Resource Estimation in Project Management?
Before defining resource estimation, let’s define a resource in project management. A resource is anything you need to complete a project. This can be team members, different materials, technology, and equipment. This leads us to resource estimation, which is when you plan the resources you need. This will help you budget better and determine a realistic timeline for your project.
Many businesses also use this process to determine the risk in a project. This will help you address and prepare for any potential problems.
Many skilled project managers also ask themselves these questions:
- Do we have the necessary tools already?
- Do we have staff members who know how to estimate resources for a project?
- Are there any additional tasks involved?
- How much of each resource do we need?
- What will we do if we don’t have enough resources?
- When do we need the resources?
- What additional skills will benefit this project?
- What are our backup resources?
- How do we access the resources?
By answering these questions, you’ll have a more effective resource estimation plan.
Types of Resources in Project Management
Resources typically fall into two categories:
Equipment includes more than technology. Necessary materials can also fit into this category. This is especially true if your project requires niche items in your industry (such as materials for construction). Many businesses also include overhead costs in this category—even necessary expenses to run your business, such as rent and utilities. That’s why it’s important to know how to calculate the resources needed for a project.
There are two types of labor you can include: direct and indirect. Direct labor includes your main team members working on a project. Remember that this category may also include your freelancers and contractors. Indirect labor involves key roles but doesn’t work directly on a project. These roles may include managerial and administrative staff members.
What Factors Affect Resource Estimation?
The main factors that affect your resource estimation are biases, timescales, experience, and specifications. Many businesses will have positive and negative biases toward resource estimation Some team members may be more optimistic and realistic, especially regarding deadlines. But some businesses may think of unrealistic risks that distract from the tasks at hand.
There are times when resource estimation isn’t an option. This usually happens due to time constraints. When you rush a project, you risk going into it ill-prepared. Still, there are still times when you need a quick turnaround. If this is the case, get your best team members on this project.
Team member experience will make the biggest difference in estimating your resources. Find the best employees or freelancers to help with this process. Using the best project management platform will also help.
Even with all your planning, there are times when you make a mistake. If you choose the wrong resource, didn’t allocate enough, or were incorrect about your budget, it’s beneficial to think of a plan B to prepare for any changes.
Strategies for Estimating Resources
These tried and true strategies will better help you estimate resources. These include bottom-up, top-down, three-point estimating, historical data analysis, alternative analysis, and expert judgment.
Here’s a look at all of these strategies:
Bottom-up: start with a task list and work up to an overall estimate.
Top-down: you work with the project goal and then down to the individual tasks.
Three-point estimating: use optimistic, pessimistic, and realistic elements to develop your plan.
Historical data analysis: using past data to plan your resources.
Alternative analysis: weighing several different options when estimating resources.
Expert judgment: ask for input from experts.
Best Practices in Estimating Resources in Project Management
Some additional resource management best practices include:
- Ensure all team members understand and agree on the estimated resources
- Use the right project management software
- Include buffer room for fluctuations
- Be realistic in your estimations
- Ensure your estimations are always up-to-date
- Communicate with your team members regularly
- Monitor resource usage
- Use diagramming tools when necessary
We want to highlight one best practice—using the right project management software.
Benefits of Using WorkOtter for Project Management in SMBs
WorkOtter is a simple, cloud-based project management tool that offers all the project resources you need. With a 99.999% uptime guarantee, businesses can feel secure that their project management platform will run smoothly without needing to install software, purchase servers, configure networks, or manage their own upgrades.
WorkOtter less expensive than competitors and is completely secure. WorkOtter is powerful enough for enterprise clients. At the same time, this platform is also ideal for small business owners. With “pay as you grow” pricing, your business can invest in more features when needed.
WorkOtter offers lots of flexibility when planning every aspect of your project. This platform supports Scrum, Agile, Waterfall, MSP, HTML5 GANTT editing, and more. WorkOtter also boasts many features, such as a centralized dashboard, reports, different project logs, and other areas to customize your workspace. You can upload files, use the built-in messenger, and receive email notifications.
How WorkOtter Can Help with Resource Estimation and Project Management
You shouldn’t trust another platform more than the award-winning project management tool WorkOtter. That’s because WorkOtter offers everything you need for resource estimation in project management. With impressive features such as resource forecasting, businesses can identify the overall demand for a project before it even begins. You can also track your resources and receive individualized reports.
Are you ready to get started with WorkOtter? Tour our platform today!