Lots of the work on Bullpen's is project-based. This means that there is a defined start and end to its lifecycle. As with any project, one of the first questions that the sponsor is going to ask is “how much is this going to cost?” Before you can provide an answer, you'll need to scope your project.
A project’s cost is a function of the number of hours that it takes to complete it so providing an accurate estimate is critically important. Get it right and you’ll deliver within the client's budget. Get it wrong and you risk upsetting them.
The name of the process used to estimate the time required to complete a project is "scoping." It is part art and part science. Use the following six steps to scope your project like a pro.
Step 1: Understand the Business Need
If the sponsor is requesting help with a specific project, they must have a real time business need for it. So, the first step to scoping a project is to understand exactly what it is and how the completed project will meet it.
For example, a sponsor may request help with the construction of a financial model, but this is vague. Uncover the specific business need by asking the sponsor specific questions like:
- Why are you requesting help with this effort?
- What are the current pain points that you are looking to solve once this effort is complete?
- How will the completion of this project improve your business function?
The answer to these questions should provide valuable context behind the reason for the project and provide the project manager with initial insight into how long it is going to take.
Step 2: Define Clear Goals and Objectives
The next step is to clearly define the goals and objectives of the project effort. It isn't enough to just create a broad project scope statement like "create a financial model." Well written goals and objectives fit into the S.M.A.R.T methodology. This means that they are:
- Specific: Each goal/objective should be as specific as possible. A goal like "create a financial model" is too broad. A better project goal is "create a financial model to underwrite the acquisition of multifamily assets."
- Measurable: In order to claim success, one must be able to measure it. Using the example above, a measurable goal could be something like: "create a financial model that will decrease underwriting time by 10% and reduce the number of manual inputs by 30%." Adding these numbers provides a way to measure the success of the project.
- Achievable: A project's goals must be achievable for the team members and resources available. For example, a complicated financial model requires individuals to code it, test it, and deploy it into a production environment. This is likely not achievable for just one person. As a result, the number of hours for all members of the project team should be accounted for.
- Reasonable: Good goals must be reasonable. Creating a financial model that reduces input time by 99% is likely unrealistic.
- Time Bound: This may be the most challenging element of project management. "Time Bound" your goals by allocation a specific period of time to complete them. Rather than provide a specific date, it can be helpful to provide a small range of realistic possibilities. Instead of saying it will take 100 hours to create the model, a better quote may be 100-115 hours. A range gives you some margin for error while still staying on budget.
The result of this effort should be a clear understanding about exactly what the project entails and the goals that the project stakeholders are trying to achieve. Circulate them amongst the project team and receive sign off from the project sponsor.
Step 3: Clearly Define Project Deliverables
At the end of the project, what is it that you will be delivering to the project sponsor? Itemize the time needed to complete project deliverables as part of the project scope. For example, a client may be expecting a financial model in MS Excel. Deliver in Google Sheets and this is a major miss that reflects poorly on you.
Step 4: Create a Plan
Once you have clarified the project objectives and deliverables, you can back into how long it is going to take to achieve them. For this, create a project plan. For each deliverable, create a work breakdown structure. Then back into the number of hours it is going to take to complete each of them.
Although every project is unique, the effort required to complete each deliverable follows the same general pattern. Perform some upfront research required to define the requirements. Then there is some level of work required to build the requested functionality or deliverable. Next is some sort of testing/feedback phase. Finally there is a handover of the finished product. It can be helpful to break the work effort into these chunks and assign a number of hours to each to get to a realistic total.
A project plan is also helpful for tracking your efforts along the way to make sure you are staying on track with your original estimate.
Step 5: Identify Dependencies
Working with a client is a collaborative effort. This means that each member of the team must be engaged and responsive for timelines to be met. If they aren't, it can lead to delays and wasted effort. As such, "dependencies" should be clearly identified as part of the project planning/scoping exercise.
For example, if you have been contracted to create a financial model for the underwriting of multifamily properties, there are likely to be several dependencies impacting the scope:
- You will be dependent upon the client to provide financial information. They may also need to provide previous versions of the model, and underwriting examples to get started.
- There is a dependency upon the client to provide feedback along the way. This ensures you are on the way to meeting their needs.
- You will be dependent upon the client to test your model and provide feedback and change requests.
- Finally, you will be dependent upon the client to provide final review and signoff of your effort.
These dependencies - or those similar to them - should be accounted for in your estimate of time. Communicate them to the client clearly with the suggestion that the proposed timeline could be at risk.
Step 6: Include a Contingency
Even the most detailed plans have a way of getting off track once a project is in motion. To account for this, it is best to include a contingency for extra time that could be used to address unforeseen issues.
Generally, the contingency could be in the range of 10% of the total project hours and it can be detailed as part of the quote so that the client understands that you are being conscious of potential roadblocks.
Final Thoughts
For a moment, put yourself in the client's shoes. Would you rather have a contractor tell you something is going to take 50 hours and it ends up taking 80? Or, would you rather have a contractor tell you it is going to take 80 and it ends up being 60?
Regardless of the quality of the final deliverables, these two scenarios are the difference between a successful project and one that leaves the client feeling like they were misled.
To avoid this type of miscommunication, it is critically important to invest the time upfront to determine exactly what the scope of the project is, what the dependencies are, and how long it is going to take to complete the required deliverables. Defining the boundaries of the project can go a long way towards identifying the project requirements and the resources required to meet them.
