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PRINCE2 Estimating 

 January 18, 2021

By  Dave Litten

The art of PRINCE2 Estimating


A decision about how much time and resources are required to carry out a piece of work to acceptable standards of performance must be made by identifying the type of resource required.

Specific skills may be required depending on the type and complexity of the plan, and requirements may include non-human resources, such as equipment, travel, or money

You will want to estimate the effort required for each activity by resource type, but remember at this point, the estimates will be approximate and therefore provisional.

PRINCE2 Estimating Planning Levels

Basic PRINCE2 Estimating rules

Many books and software packages include some basic rules to help ensure that an accurate and realistic estimate is produced. Examples of such planning rules include the following:

  • Assume that resources will only be productive for, say, 80 percent of their time
  • Resources working on multiple projects take longer to complete tasks because of time lost switching between them (multi-tasking)
  • People are generally optimistic and often underestimate how long tasks will take
  • Make use of other people’s experiences as well as your own
  • Ensure that the person responsible for creating the product is also responsible for creating the effort estimates, or at least agrees with the estimate
  • Always make effort and time provision for problem-solving, meetings, and other unexpected events
  • Cost each activity rather than trying to cost the plan top-down
  • Communicate any assumptions, exclusions or constraints you have to the user(s)
Preparing Estimates when PRINCE2 Estimating

The Planning Horizon

Estimating cannot guarantee accuracy but, when applied, provides a view about the overall cost and time required to complete the plan, however, estimates will inevitably change as more is discovered about the project.

The PRINCE2 Estimation Planning Horizon

Estimates should be challenged, as the same work under the same conditions can be estimated differently by various estimators or by the same estimator at different times.

Identifying activities and dependencies

Simply identifying products is not sufficient for scheduling and control purposes.

The activities required to create or change each of the planned products need to be identified to give a fuller picture of the plan’s workload.

There are several ways to identify activities, including:

  • making a separate list of the activities, while still using the product flow diagram as the source of the information
  • taking the products from the product breakdown structure and creating a work breakdown structure to define the activities required

The activities should include management and quality checking activities as well as the activities needed to develop the specialist products.

The activities should include any that are required to interact with external parties; for example, obtaining a product from an external source or converting such externally sourced products into something that the plan requires.

After the activities have been identified, any dependencies between activities (and products) should also be identified.

It is important that dependencies are captured (e.g. on the product flow diagram or some form of register) and that someone responsible for managing the dependency is identified (the project manager or some other nominated person).

Key dependencies should be noted in the project plan. Consideration should be given to identifying threats to the plan related to dependencies.
Avoid the proliferation of activities beyond the plan level of detail (the planning horizon)

Determining Activity Dependencies for Estimating


A dependency means that one activity is dependent on another. There are at least two types of dependency relevant to a project: internal and external.

An internal dependency is one between two project activities. In these circumstances, the project team has control over the dependency.

An external dependency is one between project activity and a non-project activity, where non-project activities are undertaken by people who are not part of the project team.

In these circumstances, the project team does not have complete control over the dependency.

Preparing PRINCE2 Estimates

A decision about how much time and resource are required to carry out a piece of work to acceptable standards of performance must be made by:

  • identifying the type of resource required. Specific skills may be required depending on the type and complexity of the plan. Requirements may include non-human resources, such as equipment, travel, or money
  • estimating the effort required for each activity by resource type. At this point, the estimates will be approximate and therefore provisional

Estimating cannot guarantee accuracy but, when applied, provides a view about the overall cost and time required to complete the plan. Estimates will inevitably change as more is discovered about the project.

Estimates should be challenged, as the same work under the same conditions can be estimated differently by various estimators or by the same estimator at different times.

Preparing a schedule

A plan can only show the ultimate feasibility of achieving its objectives when the activities are put together in a schedule that defines when each activity will be carried out.

There are many different approaches to scheduling. Scheduling can either be done manually or by using a computer-based planning and control tool.

PRINCE2 Scheduling Techniques

Defining a PRINCE2 activity sequence

Having identified the activities and their dependencies, and estimated their duration and effort, the next task is to determine the optimal sequence in which they can be performed.

This is an iterative task as the assignment of actual resources may affect the estimated effort and duration.

The amount of time that an activity can be delayed without affecting the completion time of the overall plan is known as the float (sometimes referred to as the slack).

The float can either be regarded as a provision within the plan or as spare time.

The critical path(s) through the diagram is the sequence of activities that have zero float. Thus, if any activity on the critical path(s) finishes late, then the whole plan will also finish late and completion of the plan will be delayed.

Identifying a plan’s critical path enables the project manager to monitor those activities that must be completed on time for the whole plan to be completed to schedule or those that can be delayed for a time period if resources need to be re-allocated to catch up on missed activities.

Examples of estimating techniques

There are many PRINCE2 estimating techniques that can be used at different points within the project lifecycle:

Using PRINCE2 Estimating Techniques

Top-down estimating
When a good overall estimate has been arrived at for the plan (by whatever means), it can be subdivided through the levels of the product breakdown structure.

By way of example, historically development maybe 50 percent of the total resource requirement, and testing maybe 25 percent. Subdivide development and testing into their components and apportion the effort accordingly.

Bottom-up estimating
Each individual piece of work is estimated on its own merit. These are then added together to find the estimated efforts for the various summary-level activities and overall plan.

The top-down and bottom-up approach
An overall estimate is calculated for the plan. Individual estimates are then calculated, or drawn from previous plans, to represent the relative weights of the tasks.

The overall estimate is then apportioned across the various summary- and detailed-level tasks using the bottom-up figures as weights.

Comparative (reference class) estimating
Much data exists about the effort required and the duration of particular items of work.

Over time an organization may build up its own historical data regarding projects that it has undertaken (previous experience and captured lessons).

If such data exists, it may be useful to reference it for similar projects and apply that data to the estimates.

Parametric estimating
Basing estimates on measured/empirical data where possible (e.g. estimating models exist in the construction industry that predict materials, effort, and duration based on the specification of a building).

Single-point estimating
The use of sample data to calculate a single value which is to serve as a ‘best guess’ for the duration of an activity.

PRINCE2 Estimating Techniques
PRINCE2 Estimating Technques


Three-point estimating
Ask appropriately skilled resource(s) for their best-case, most likely and worst-case estimates. The value that the project manager should choose is the weighted average of these three estimates.

Three-Point Estimating in PRINCE2



The Delphi technique
This relies on obtaining group input for ideas and problem-solving without requiring face-to-face participation. It uses a series of questionnaires interspersed with information summaries and feedback from preceding responses to achieve an estimate.

Planning poker (when using an agile approach)
A group uses specially numbered playing cards to vote for an estimate of an item.

Voting repeats with discussion until all votes are unanimous.

Big/uncertain/small {when using an agile approach)
Items to be estimated are placed by the group in one of three categories: big, uncertain, and small.

The group starts by discussing a few items together and then uses a divide-and-conquer approach to go through the rest of the items.

PRINCE2 Estimating Estimating

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Dave Litten


David spent 25 years as a senior project manager for USA multinationals, and has deep experience in project management. He now develops a wide range of Project Management Masterclasses, under the Projex Academy brand name. In addition, David runs project management training seminars across the world, and is a prolific writer on the many topics of project management.

The Projex Academy

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