Why do Projects need Estimates?

When you work with a Project Manager, you quite often get asked "What would be the delivery date or estimation for a task". You might wonder why it is so important to any Project or Program Manager.

Before we dive into the topic, let's start with a basic question: "What is estimation?"

Estimation is a rough calculation of the value, number, quantity, or extent of something.

Definitions from Oxford Languages

Estimation (or estimating) is the process of finding an estimate, or approximation, which is a value that is usable for some purpose even if input data may be incomplete, uncertain, or unstable. The value is nonetheless usable because it is derived from the best information available.

Wikipedia

In software development there are many estimation techniques, but this is not the focus of this article. I would like to talk about scope estimation and why it is crucial to do it while executing projects at Zalando.

During the Solution Design phase (Phase 2 of Zalando Product Development Process), after the project scope is defined, work breakdown and estimation of the identified work is carried out. Project scope could be broken down into milestones or workstreams based on the project needs. Each milestone or workstream has its own breakdown structure like work packages and tasks.

Whatever approach is used for the breakdown in the end we aim to have timelines defined for each piece of work of the identified scope. This helps to mark discovered dependencies between the work especially if it is done by different teams. Project Manager can build a critical path (the longest sequence of tasks that must be completed to successfully conclude a project, from start to finish). of the project which helps to identify what is the impact of the delayed dependencies, and as a result potential project delays.

Are estimations set in stone? The answer is no. We provide estimations on delivery timelines based on the currently known information and our best knowledge. Estimates might change during the project execution due to the higher level knowledge in comparison when we started the project. What is important from Project Management perspective is that we monitor the progress and are enabled to quickly react to any changes and start any escalations or adjustment.

Normally projects have a planned release date to introduce new features to the customers. This release date is connected with planned marketing campaigns, agreed contract responsibilities, required government regulations, other dependent projects, etc. Sometimes release dates can be moved in case the benefit of slightly postponing it brings more value than releasing it too early. But this doesn't mean that projects can be executed without any planned estimation of when they can be finished.

If the project doesn't have an established end date, then it might be that it is not really a project, but rather a Product. While a Project deliverable can be a Product, a key difference is that the Project always has a defined start and end date. For developing a Product, several projects could be initiated with established goals and targeted launches. In comparison to a Product, for a project to be started and finished it should have defined scope, cost and time.

Scope estimation is never an easy task, and depending on the situation we might need to adapt on how to make the best of it and avoid being a team health killer. Of course, sometimes there will be projects where detailed estimations will help us to reach high level confidence of reaching the established deadline, which cannot be moved because of different reasons. In other cases, we can be pragmatic and not spend weeks and months on estimating the work of huge projects and trying to predict the unpredictable while building new services or releasing brand new features.

Additionally, knowing the pieces of the puzzle, give a Project Manager a full picture of the work needed to be done to provide a transparency of the project progress to the project Sponsor and project stakeholders.