Kevin Eckerle (Wed)

Estimating Dollars

What a day….  It seems to happen in every project, especially those where you’re developing strategic plans. There comes a point in the project when you have to sit with your project team, lay all the options on the table, debate the pros and cons of each, and come to a consensus on which options you’re going to recommend to your client and which you’re going to leave behind. Today was that day.

It can make for the longest day on the project, but also the most interesting and exciting. You start the day sitting with your colleagues and staring at a completely blank white board, over very large cups of coffee. Gradually, you populate the white board with every option you’ve identified and evaluate each. Part of that evaluation is crafting an estimate of the financial impact of pursuing each option. A large part of crafting that estimate is debating with your team, how best to produce the estimate. You start by developing what you think is the ideal equation and documenting assumptions. After agreeing on the equation, you review the data you have on-hand to identify which data points can be used in your equation, and which could serve as replacements, should you not have the ideal data point. Ideally, you’re able to provide the client with a very detailed estimate, though it’s not uncommon to develop more ‘ballpark’ figures that can provide direction to the client for what could be realized in comparison to other options.

Once you get the financial estimates, you discuss other factors that might impact the overall strategic direction. You and your team debate the risks to success of each option, how complicated implementation might be, the likelihood of realizing the full value identified, and what could develop as unintended consequences of pursuing each option.

The process itself can be grueling, as you’re in a room or on the phone with the same group of people for long periods of time.…  We started this morning at 8am and finished just after 6pm, and I considered limiting the day to only 10hrs to be a very successful day.

But, in the end, everyone is comfortable with the day’s outcome and the proposed plan for the remaining weeks of the project. More importantly, as the person who’s going to be presenting this to the client tomorrow, you feel a greater sense of confidence in the recommendations you’ll be presenting and retire for the evening to consider what questions you might expect, what questions could come from out of the blue, and how best to present your recommendations.

Tomorrow will be an interesting day and a significant milestone for the project. It’s also travel day, so my eyes will increasingly turn to flight schedules and weather forecasts, as I look forward to getting back home.