PMP Training: Estimate Activity Resources
PMP® Exam Prep: Estimate Activity Resources
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"Estimate Activity Resources. The process of estimating team resources and the type and quantities of material, equipment, and supplies necessary to perform project work."This definition is taken from the Glossary of Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) - Sixth Edition, Project Management Institute Inc., 2017.
This lesson looks at the second process of the Project Resource Knowledge Area. It is closely related to Estimate Activity Durations because without knowing who will be performing a task you cannot estimate precisely how long it will take them.
We explore the process in detail and review all Inputs, Tools & Techniques, as well as Outputs (ITTOs) that you need to know for the exam.
Until Next Time,
Cornelius Fichtner, PMP, CSM
President, OSP International LLC
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[01:17] Lesson Overview
Hello and welcome to The Project Management PrepCast™ where you can use your ears and eyes to prepare for your exam. I am instructor, Cornelius Fichtner.
In this lesson, we discuss the Estimate Activity Resources process. We go through the various types of resources that are estimated. Several factors that influence Activity resource estimating and we discuss the process details and how you need to coordinate with other processes.
This important process here will help you estimate and identify the type and quantities of human resources, equipment materials and supplies required to perform each of the schedule activities and the project as a whole.
[02:06] You are Here
But first let us see where we are in the overall PMBOK® Guide map. We are in Project Resource Management and as the process name implies in the planning process group and we are at the second process Estimate Activity Resources which is defined as the process of estimating team resources and the type and quantities of material, equipment and supplies necessary to perform project work.
[02:37] Follow Along on Pages: 320-327
If you want to follow along in your own PMBOK® Guide, please turn to pages 320 to 327.
[02:46] Main Concept
A central theme and estimate activity resources is that you should have a thorough understanding of the resources required for each individual activity in order to achieve an accurate estimate of duration and costs for the project as a whole.
In other words, if you understand the resource details at the activity level then figuring out the total cost and duration will be a breeze. But if you fail to understand the required resources then you can expect cost overruns, schedule slippage and possibly total project failure.
[03:27] Types of Resources
The Estimate Activity Resources process helps us to identify and quantify the resources required for each activity. For any given activity on our project, we may require some or all of these resources here --- people, equipment, material, as well as goods or supplies.
So even though we focus mainly on the topic of estimating what type of human resources are needed to perform our activities, we should never forget that our activities may also need some or all of the other types.
[04:05] Four Factors
Furthermore, when you estimate resources, you should also consider these four factors here starting with the complexity of the task then the skill level that is required of the resource; the organization’s history in doing similar activities and finally, the required resources availability. If you’ll properly weigh these factors, you should be able to provide accurate estimates for the resources required.
[04:36] Let’s Dig Deeper
But let’s dig a little deeper here because when choosing resources, it’s imperative that you give adequate consideration to what resource is best to doing a particular job.
Let’s say one of the activities on your project requires the digging of a 40 x 40 x40 cm hole. How long this will take is dependent on your choice of resource. Suppose we have many of these holes to dig. We better choose our resource wisely or it could take a long time.
Well if employing a 6-year-old were not against the law, in most places, we would probably a result in the region of 1 to 2 hours for that 6-year-old to dig the hole. Probably not ideal since many holes would be requiring a lot of time to be scheduled for this child to dig, say, 50, 60 holes like that. A better choice would be to employ an adult who could probably complete each hole in about 10 to 20 minutes. But if we had hundreds of these holes to dig, even that choice would not be optimal. A modern excavating machine would complete the task in only about 10 seconds and so if you have hundreds of these holes to dig, it would likely be the best choice of resources here.
And you probably also noticed that each of these choices would have a different cost attached to it. Let me also fill you in in a little secret here. See the adorable dog on the image here on the right who seems ever so ready to dig. Well I was told that this dog would likely prefer hunting to digging. A terrier would be better for the digging job. So don’t forget the skills of your resources either.
[06:35] Cost Perspective
I just mentioned cost a second ago because in addition to considering duration when choosing resources, it is also very important to look at these resources from a cost perspective. After all, each resource has a cost associated with them and selecting one ton of resource over another can have an impact on your project budget. But there is more to cost than simply the hourly rate.
Know-how and experience is also connected to cost. Experience usually means greater productivity. If your resources don’t have the appropriate know-how to perform a task, you must send them to be trained and that costs money or you could decide that it’s overall cheaper for you to simply hire the external resources who have the specialized know-how. Remember that the more experience a resource has, that resource will usually also cost more and you have to account for this.
Let’s get our hands dirty and start planting some seeds of knowledge about this process…
[7:40] Estimate Activity Resources
…Beginning with the inputs. We have four of them. Within the project management plan, you will need the Resources management plan, as well as the schedule baseline. There are some interesting project documents that are especially helpful in the estimating processes.
Enterprise environmental factors such as resource availability, location and skill can all influence resource selection. And organizational process assets can also influence or even impact resource used. Most common examples are policies or procedures that address staffing, the rental or purchase of materials, equipment and supplies.
[8:25] Project Management Plan
The Project management plan and its subsidiary components may be quite large. So focus on those elements that we know that we need. First of all, we need the Resource management plan, which shows us how we approach identifying all the required resources and how they will be quantified. And we’ll need the scope baseline to see which activities need people or activities that require things or perhaps both. And lastly, the Schedule baseline answers the question ‘when’. When does an activity start means that’s also the when a resource may be required.
[9:06] Project Documents
Here are the project documents that we need. Activity attributes, which are the details that allow resource estimation for those activities; details like successor activities, logical relationships, leads and lacks, imposed dates and constraints to name just a few.
Then the Activity list is a list of all activities that will require resources. Don’t forget a list of the Assumptions that we made about our project. Then we also have the Activity cost estimates. They can influence whether or not resources are used and if so, what type of resources are used based on cost. Oh and be careful because cost and quality may be interdependent.
Next we have the Resource calendars. They can be consulted to identify what resources such as people or equipment are available at a given time. And lastly, the Risk register; it provides a list of risk events that may impact resources required, selected or available. Each of these provides information needed to make accurate resource estimates.
[10:25] Commonly Used EEFs & OPAs
Here are a few of the commonly used Enterprise environmental factors and Organizational process assets. Starting with the EEFs, we have the resource location and availability, team resource skills, the organizational culture and the marketplace conditions.
And then on the other side for the OPAs, we have standard HR policies, physical management procedures, as well as the history of resource used on past similar projects. We have discussed most of them in other lessons so I won’t go into detail here. However, there is one factor I would like to look at with you and that is the fact that we have to keep in mind that the choice of resource or quantity can potentially impact multiple project variables like time and cost. But how do we make these decisions without having an enormous base of knowledge about those factors and more? Well that brings us to the fifth EEF that is missing here on the left-hand side.
[11:37] Published Estimating Data
Because the answers to my questions can be found in Published estimating data. This data is indeed available and it tells us how long it will take and excavate it to dig a hole. How long it takes a skilled laborer to dig the same hole or maybe even how long it takes a 6-year-old to do the same job? I doubt that one though.
Similarly, there are catalogues available that give you the unit cost for labor equipment and material resources, and having these two pieces of information available, you can use the rate information and unit cost together to determine total cost of production for the resources selected. These sorts of external publications whether industry-based or even government-created may be very helpful since someone else has done all the brainwork for us.
[12:33] Tools and Techniques
Let’s keep going and grab our spade and shovel as we learn all about the tools and techniques to estimate activity resources.
[12:43] Estimate Activity Resources
We have quite a number of them to choose from starting with one of our usual suspects here: Expert judgment. Then we have three specific estimating tools namely Bottom-up estimating, Analogous estimating, Parametric estimating. We also have Data analysis, your Project management information system; and finally Meetings that’s the other usual suspect. Each of these tools and techniques helps you to estimate all the resources that you are going to need for the project.
[13:18] Expert Judgment
Expert judgment is the first tool and technique. Experts can provide real perspective when it comes to estimating resources for our activities. First off, experts can help the project staff choose the right resource based on their wealth of experience with similar projects or activities. Remember our earlier example about digging holes? I suppose the expert will not tell us to pick the 6-year-old. Experience counts!
Once we have decided on which resource is correct for the task, experts can then help us to determine how many of these resources we should employ for a given activity. Experts usually know the optimum number so there is just enough work to go around and avoid idle time.
Experts earn their big paychecks also by sharing their knowledge and insights about requirements for a given activity that is common in their area of expertise. Experts can give us choices of different techniques for estimating and because they have seen many different situations, experts can typically also provide a range of choices of resources appropriate for a given activity.
[14:39] Estimating Tools
Next, we have the three common estimating techniques that you have already seen in both Cost Management, as well as Schedule Management lessons. Bottom-up estimating is often on PMP® exams. It’s a PMP® exams favorite because even though it is time consuming, it is the most accurate of estimating approaches. Some call it the Engineering or Grassroots estimate because of the level of detail involved.
The key is in the detail. When you breakdown an enormous task into smaller, more manageable tasks then the tasks become small enough to make a considered estimate for the required resources. After you assign people, equipment, material and supplies, you get a total for that single task. Add up all these estimates and that is Bottom-up estimating. When each and every task on the WBS has its own detailed estimates, the number can be aggregated at a different level or totaled for the entire project.
Analogous estimating is certainly quicker and easier. This method uses the common features of similar past projects based on recent historical data.
And then Parametric estimates are simple math tools. They are algorithm-based. If you have current, up-to-date data, you can use a formula to make an estimate based on proven relationships. For example, a paving company knows its past cost per lane mile paved and even the cost of a mile of painted centerline. Very handy but using this tool requires current, accurate and relevant data.
[16:25] Data Analysis
We are moving on to our next tool and technique, which is Data analysis where we take the time to look at the activity resource related information so we can organize, assess and evaluate them.
[16:41] Alternative Analysis
We want to look at a particular type of data analysis that is all about alternatives. Just as we have choices of how we derive energy, we have choices of what resources to assign to the various project tasks. As project managers, our project team and often experts will assist us in identifying several resource options for our activities.
When choosing resources, we must first determine what is the best choice and why. Is it faster? Is faster always the best? What about reliability and what about quality? The analysis of alternatives should consider all the ways to accomplish the activity. Should the task be done manually or is automation a better choice?
Questions such as whether it makes sense to do the work in-house or use external resources need to be considered when estimating resources. Very often, project managers will also have to consider whether it makes more sense to build it or buy it or even rent it. For example, software, should we build it ourselves or purchase it from a vendor? Both the requirements of an activity or its product, as well as the current environment will limit our choice of alternatives.
One example that immediately comes to mind is a resource shortage and its effect on cost and considerations in regards to alternatives. So as you see, there are many considerations when choosing and estimating the resources required for the project activities and it’s good to have alternatives.
[18:26] Project Management Information System
The Project management information system and of course in particular project management software is definitely something you are going to want to use. Contemporary software is sophisticate enough to consider several factors when estimating resources such as the Resource breakdown structure, the Resource calendars and Rates and cost. Having these all in on package will allow you to create instant alternatives for comparisons in order to see the potential, scheduling conflicts and resource shortages or overbooking problems. And that is how project management software will support us in our endeavor of estimating activity resources.
And now that we have applied our tools and techniques to the various inputs, we come to the outputs. We have a total of four outputs here in Estimate activity resources. We have the Activity resource requirements. This is a key listing of what types and quantities of resources will be needed by all activities on the WBS. Indeed, it can directly affect cost and quality.
Then we also have the Basis of estimates, also called the BOE. In some organizations, they provide the rationale for each estimates; the Resource breakdown structure and the Project document updates. Let’s discuss these outputs further.
[20:40] Activity Resource Requirements
The goal of this process is to identify and estimate what kind of and how many resources are needed for each activity in a work package. Therefore, the activity resource requirements list contains the quantity and type of resources for each activity or task on the WBS. It can be used to aggregate the total resources required in a work package or a work period.
It will often contain the details involved in creating the estimate for each resource and the assumptions that were used to determine the resources estimated. This output is a vital piece, which becomes indispensable as an input for other processes. The basis or rationale for each estimate is a handy reference document to remind us how we created our estimates. Let’s see what’s involved!
[21:24] Basis of Estimate
The Basis of estimates, the BOE, supports the activity resource requirements. It is a key source for finding the methods used to develop the estimate --- Analogous or Parametric for example, and it includes the assumptions and the type of resources used.
For example: Did we use a 6-year-old or machines to do the digging? Were there any constraints affecting this estimate? And since estimates are predictions of the future and cover a range of possibilities, we should be able to attach a level of confidence to each. And finally, has our estimating activity revealed or introduced any new risks?
[21:53] Resource Breakdown Structure
The Resource breakdown structure is our third output. It’s a great way of showing required resources in a graphical format. Our example here includes only the human resources that are needed in each of these three categories here. Of course, you could have other categories like labor, material, equipment, supplies and so on.
Take a look at the welding category. Here you see an example that includes the skill level of our resources because we have a Master welder, as well as one other category, an Apprentice welder. And now, we complete our example here with the transportation, as well as the plumbing.
Notice something: We’re only talking about categories here. We haven’t yet assigned individuals. We haven’t yet people. We would need to consider the different roles and types of resources that we need which may include required licenses and certifications, skill or grade levels or knowledge and experience.
[23:01] Project Document Updates
And finally because we have done quite a bit of work in this process here, there are number of project documents that may require updates. For example, the Activity attributes, the Assumptions log and the Lessons learned register could be among them. And that was the last of the outputs here in the Estimate Activity Resources process.
Let’s see what we can take away from this lesson: Why do we estimate activity resources? Well we want to estimate how many and what type of resources we will need on our project. And how exactly do we accomplish this? We analyze the type and the quantity of resources that we need for each schedule activity so that we can accurately estimate the activity duration.
We apply expert judgment and alternative analysis in order to document activity resources requirements in the activity attributes of our activity list. And we also create a resource breakdown structure.
And that concludes our look at the Estimate Activity Resources process.
Until next time.
[End of presentation]