How to Estimate Project Resources Sensibly

Team member working hard takes time to play“We work hard, but we play hard!”

I remember that being a common theme as I was pursuing my career in software development. Project teams wore this mantra like a badge of honor, as though 60-hour work weeks made them super-heroes. They took pride in their long hours and their ability to party without it affecting their work output or quality.

However, science and biology tell us otherwise. One can mistreat him- or herself for so long before one slows down, before errors creep in, before motivation and collaboration and relationships are damaged, and before health issues manifest. Even now, decades later, as I come across former colleagues’ profiles on social media, I find that they have left the demanding life of IT consulting to pursue corporate jobs in accounting, HR, procurement, and others that allow for a more balanced lifestyle.

So why are so many IT delivery teams overloaded and team members overwhelmed? Why do they work excessive hours yet struggle to meet milestone deadlines? Why so much burn-out?

Is it a lack of skills? Not hardly! I have worked with the brightest and best over my entire career, and they struggled with meeting deadlines.

Is it a lack of training in areas like time management, teamwork, and other essential skills? Not typically. The teams that I had the privilege of working with typically had the best of employee development training. Yet they also struggled with meeting deadlines.

Is it poor management? In some cases, yes. But I have observed that even well-managed teams struggled with meeting deadlines.

Is it because of the nature of fixed-price bidding? To some extent. I mostly witnessed this where the proposed price was designed to win at all cost – and this cost often manifested itself in the overload and overwhelm of the delivery teams.

However, in my estimation, the number one reason for overload and overwhelm is the (intentional or unintentional) over-planning of project staff.

Have you seen situations similar to this? The number of available working hours in a year is rounded to approximately 2000 hours (allowing for state and federal holidays). So, for easy math, divide the estimated hours to complete the job by 2000, and voila! You determine the magic number of required full-time equivalents (FTEs).

But what about vacation time? Sick time? Family emergencies? Continuing education (yes, I know, this typically gets scrapped when the project gets intense)? Time taking lunch orders for Uber Eats delivery? Time around the coffee machine to catch up from last night’s party? Meeting time (Oh, those absurd wasted hours in endless meetings!)? Administrative time? Career management time?

Project individuals are not automatons. They have lives outside of the best hours of the day that they willingly give to the project. They deserve to work solidly productive days without the fear of overload because of aggressive estimates.

So how should we estimate the true capacity of our project teams? My rule of thumb is that 80% of the team member’s time will be what is called “productive” time (this varies depending on the circumstances, but let’s go with that). As a rule of thumb, and assuming good project management and a synergistically working team, this is not an unreasonable factor for estimating team capacity. Allowing for approximately 80 hours of annual PTO (personal time off) per individual, an 80% productivity factor calculates to just under 1500 available productive working hours per team member per year. Actual execution may require bursts of extra effort, but not as a constant for the entire project.

So, for easy math, divide the estimated hours to complete the job by 1500, and voila! You get the number of required full-time equivalents (FTEs). But don’t do as some have done – assume a 50-hour work week. Then when the 80% factor is applied, the number of required FTEs is more favorable to the project budget.

At least on paper.

To validate a productivity figure of 80%, or to estimate productivity for your situation, it is always a good idea to conduct an internal analysis of past projects. Corporate HR may be helpful in arriving at a good estimate of productivity. An analysis such as this will benefit future estimations, as well as provide the opportunity to review existing practices to discover areas for improvement.

Of course, there are other factors that need to be considered when estimating the activity resources for a project. For example, a client may mandate a date certain by which an activity must be completed; but adding extra FTEs may not be sufficient (think “mythical man month” made famous by Fredrick Brooks in the 1970s). Or a key skilled resource won’t be available on time, and a lesser skilled person must be proposed. In such circumstances there is no substitute for using expert judgment to fine-tune the estimates.

Unfortunately, there is no simple, clear-cut formula for estimating project resource needs. Probably the most profound counsel to come out of this discussion is to never estimate based on a factor of 100% capacity. Expert judgment, while applying relevant data from past project experience, and considering an 80% productivity factor are great places to start the estimation process.

Your project delivery teams will thank you. Maybe their new catchphrase will be “We work sensibly, and we play sensibly.” Not quite the cachet of the earlier mantra, but a more enjoyable project work life.


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