Yesterday I had the pleasure of speaking at the New England SCEA Chapter December. The attendees were a great mix of experienced, seasoned cost estimators and young, new talent, eager to learn techniques to apply on the job.
My topic was the program management value of combining estimating Rules of Thumb with more rigorous cost estimating models and databases. Rule of Thumb estimating is used every day by program managers to help guide their projects. Oversight authorities rarely have the resources to perform detailed program estimates, so they rely on simple Rule of Thumb-like models to ensure estimates are within the budget tolerance. I stressed the importance of using external and internal benchmarks to aid model building. One of my favorite examples of this is the Tailor Rule of Thumb.
This is a simple approximation that was used by tailors to determine the wrist, neck, and waist circumferences of a person through one single measurement of the circumference of that person’s thumb. The rule states that twice the circumference of a person’s thumb is the circumference of their wrist, twice the circumference of the wrist is the circumference of the neck, and twice around the neck is the person’s waist. This external benchmark uses average values (2x) for the wide population of the time. I decided to update this with internal benchmarks, or measurements of my own. I carried a tape measure for a week and measured everyone who agreed – friends, family, and co-workers. Based my internal benchmarks, I discovered that a multiplier of 2.3 made the model extremely accurate – it is no secret that we eat more than average New Jersey. In this way, I combined an external benchmark with internal benchmarks to determine an estimating Rule of Thumb with which I am comfortable.
PRICE® empowers our customers with models and tools to arrive at the same comfort level for complex projects. Most of the luncheon attendees work every day with rigorous models and databases, so they left the luncheon for a new appreciation for the value of Rules of Thumb.