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Expertise, estimations and project risks

PM Oracles
May 9, 2012

“Bias and prejudice are attitudes to be kept in hand, not attitudes to be avoided.”—Charles Curtis

The use of subject matter experts is commonplace throughout the lifecycle of a project. The experts, as we will generally refer to them, are typically functional experts in their respective roles that the project manager relies on to make delivery estimations and identify potential risks to a project.

Depending on the dynamics of your particular organisation, such experts may come from the same functional team that will be responsible for the execution of the tasks for which the experts are providing input, or they may be in a specialist division that deals with project set-up. In either case, there are a several risks which the project manager needs to look out for to avoid being given an impossible or very difficult delivery task.

Beware of expertise

In many business environments, the experts available for a project are often within the same functional group that will be responsible for the execution of tasks on a project. Let’s consider, for example, project Alpha’s objectives include designing a new car headlamp for Automotive Company XYZ. The experts used for this project are likely to include engineers, managers and/or senior personnel from various departments that will be responsible for the development of the product.

The potential pitfall in using experts from the same group that will implement it is that they accept the estimates without accounting for any bias that may be lurking in the estimates. This bias may be consciously or subconsciously included from the experts. Once the scope and requirements have been finalised for the project, the duration estimates are generally finalised with the input of the experts.

In order to meet or exceed the duration estimates provided, the expert’s estimates may actually be ‘worst case’ scenario unbeknown to the project manager, which has ensuing implications on project budget and schedule. The Peter Principle, by which the work expands to fill the time available, risks coming into play, so we do not get the optimum delivery result.

Conversely, estimates from experts that are overly optimistic risk putting the delivery team to the sword, and put the project budget at risk. The conclusion: project managers should make sure that expert guidance should be ‘peer reviewed’ by an external person to ensure it is reasonable.

Calculating risks

Bias is not isolated to the work estimates of a project. It is also connected to the level of risk involved whether for an estimate of work or generally assessing project risks. Risk, according to PMBOK, is calculated as Probability * Impact. Yet risk depends on the project team’s appetite for it, particularly the client: Are they risk averse or risk-seeking?

Depending on the environmental factors of your organisation, how you obtain the probability and impact may vary. However, most calculations of impact will be based on the subjectivity and experience of experts. Take the example below, where the project team has agreed that impacts should fall into one of five categories (see figure 1.1 below), and any risk rated over a 2.0 impact should require mitigation planning.

PM Oracles
PM Oracles is Gareth Byatt, Gary Hamilton, Jeff Hodgkinson and Duke Okes, all experienced PMO, program, and project managers who share a common passion to help others and share knowledge about PMO, portfolio, program and project management.
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