Estimating Activity Durations: Definition, Methods, Practical Uses


Before you begin developing the schedule of a project, you need to know the expected durations of all activities of a project. Project management frameworks such as the PMI’s PMBOK contain different tools and techniques for estimating durations. The expected amount of time for the completion of an activity is the basis for developing the project schedule. It can also serve as an input for estimation of the cost of an activity, depending on the type of the activity and the estimation technique.

In this article, we introduce the concept of estimating activity durations, the tools and techniques and the typical uses in project management.

What Are Activity Duration Estimates?

The purpose of estimating activity durations is to determine the amount of time it takes to complete an activity. Estimate activity durations is a process of the Project Schedule Management knowledge area according to PMI’s Guide to the Project Management Body of Knowledge (PMBOK®, 6th ed., ch. 6.4).

This process requires several input parameters, which include, in particular, the scope of work and the list and characteristics of planned activities as well as the resources that are deployed to perform the work.

The PMBOK lists

  • expert judgment,
  • analogous estimating,
  • parametric estimating,
  • bottom-up estimating, and
  • three-point estimation

as techniques to determine duration estimates. Read on for an overview of these estimation techniques.

The estimation of durations is normally done on the level of activities (see below image). Determining the total duration of a work package or the whole project requires scheduling of activities, taking their individual durations into account.

Illustration of the level of activity durations in relation to the work breakdown structure
The level at which activity durations are estimated.

This includes the consideration of dependencies between activities and often involves the development of a critical path (the longest chain of activities to achieve the desired outcome). It is therefore typically not accurate to simply calculate the sum of activity durations if you determine the duration of work packages or whole projects. This is because the sum of activity durations may overstate (sometimes understate) the total time to completion of a project as some activities can run in parallel while others are dependent on the completion of a preceding activity.

What Is the Basis of (Duration) Estimates?

The basis of estimates is a documented set of assumptions and constraints that underlay a duration estimate. This document also describes the methods applied to produce an estimate, the range of potential outcomes as well as the confidence of the estimate(s).

This documentation is important in projects for several reasons. It makes the constraints and assumptions transparent that have been considered for the estimation. Once an assumption becomes invalid, this may trigger the need for a new estimation. A project manager can also use these documents to ensure consistency across the different activities in a project, as a justification for the project schedule and for the communication with stakeholders.

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How Is Activity Duration Estimated?

The estimation process requires some input information and documents and implies the use of one or multiple estimation techniques. The following subsections elaborate on these requirements.

The estimation of activity durations should generally be done by the person who is the most familiar with the activity’s type of work. This is even more important if an estimation technique is used that relies on the expertise and experience of the estimator(s) instead of historical data.

The output of duration estimations is always a number of time periods (e.g. days, weeks, months; source). The level of confidence and whether it is a single estimate or a range depend on the estimation technique that is applied.

Regardless of the estimation technique, it is good practice that a document accompanies the estimated number that sets out all underlying assumptions and constraints, the estimate ranges and the expected level of accuracy. In PMI terminology, this document is called the ‘basis of estimates’.

Inputs

The PMBOK lists a number of inputs which are grouped under the project management plan, project documents, enterprise environmental factors and organizational process assets. While the knowledge of the complete list is likely relevant for project management exams (you will find it in ch. 6.4.2 of the PMBOK), an estimation can be done with the following minimum key input parameters:

  • list of activities and their attributes,
  • assigned resources (material and team members, incl. availability and skills), and
  • historical data (for some estimation methods).

The more information you can consider – such as risk register or enterprise environment factors – the better your estimates.

Tools and Techniques

The following table summarizes the most common estimation techniques that are also introduced in the PMBOK.

Follow the links in the ‘references’ row of the table to read more about the respective method (incl. examples). You can also use our project management calculators to calculate final duration estimates.

Overview of Estimation Methods

  Expert Judgement Analogous Estimating Parametric Estimating Bottom-up Estimating Three-Point Estimating
Input Data Expertise and experience of the experts Historic or market data: Values of previous similar projects Historic or market data: Parameters and values of similar projects Scope of work, activities Estimation techniques
Method Experts estimate the time it takes to complete the work in scope, either as a top-down or a bottom-up estimate Adoption and adjustment of historical duration observations for similar types of activities (top-down) Using the historical durations per parameter unit to determine the expected duration of future activities Estimation of durations at a granular level (e.g. activities or below) and aggregate them to higher levels Three-point duration estimates consist of optimistic, pessimistic and most likely estimates. They can be converted into final estimates with a triangular or PERT/Beta distribution
Output Type Several Duration estimate for an activity Duration estimate for an activity Duration estimate for an activity Final duration estimates for activities*, standard deviations of estimates
References PMBOK, ch.  4.1.2.1, ch. 6.4.2.1 PMBOK, ch. 6.4.2.2   Article incl. example5-step guide PMBOK, ch. 6.4.2.3
Article incl. example
PMBOK, ch. 6.4.2.5,
Article incl. example
PMBOK, ch. 6.4.2.4;    Article
Calculator

*The PERT method can also be used for scheduling multiple activities which however is not in the scope of this article.

According to the PMI, activity duration estimates are subject to progressive elaboration. This implies that they could be rather rough estimates at the initial stage of scheduling the project. During the course of the project, they are then enhanced and become more accurate as more information and details are known.

Expert Judgement

Expert judgment means that an estimator or a group of estimators determine the expected duration of an activity based on their experience and expertise in the respective area.

The accuracy of these types of estimates can vary greatly. It depends on the characteristics of the work and the experience of the estimators.

Expert judgment can also be applied to supplement one of the other types of estimates, e.g. in cases where historical data are only applicable for portions of the work.

Analogous Estimating

Analogous estimating is a technique that involves using either historical data or the experience of estimators to determine the expected duration of an activity. It is also referred to as top-down estimating.

Read more details and an example here.

Parametric Estimating

The Parametric estimating technique makes use of historical data and statistical approaches to predict the durations of planned activities.

This can be one of the most accurate methods if the data availability, quality and statistical correlations are strong. However, it may require some efforts and resources to perform the estimation.

You will find more explanations and an example in this article.

Three-Point-Estimating

As the name suggests, this technique requires determining three different duration estimates:

  • an optimistic,
  • a pessimistic, and
  • a ‘most likely’ estimate.

It can be used as a range estimate or further processed, e.g. by calculating a final estimate using a triangular or Pert distribution.

Bottom-Up Estimating

As duration estimations relate to activities, the bottom-up estimation technique is implicitly the main approach for activity durations. Activities are typically the most granular planning components of a project. However, even activities can be further broken up, e.g. into steps or procedures, to increase the accuracy of an estimate.

The technique suggests that those who are responsible for the execution of work are also estimating the duration of that work.

For the estimation of project cost, the granular estimates are rolled up to determine the total cost estimate of the entire project. However, doing this for the project schedule is more complex. It actually requires some scheduling techniques to account for activities’ interdependencies and the options to have activities running in parallel.

You can read more in this guide to bottom-up estimating (incl. examples).

Formulas and Calculation

The aforementioned estimation techniques come with their own way of computation. Parametric estimation requires a statistical correlation and subsequent calculation (ranging from a rule of three to complex statistical models). Expert judgment and analogous estimating are typically done without calculations.

When referring to the “formula of duration estimates”, people usually think of the three-point estimation method.

Assuming a triangular distribution of the three estimates the calculation of the final estimate is:

E = (O + M + P) / 3

where:
E = Expected amount of time using three-point estimation,
O = Optimistic duration estimate,
M = Most likely duration estimate,
P = Pessimistic duration estimate.

An alternative to this triangular calculation is the Pert method. You will find a comparison of both approaches in this article.

Note that three-points estimating is only one of several methods that can be used for forecasting durations. Refer to the previous sections and the detailed articles to familiarize yourself with the other techniques.

How are Activity Durations Used in Project Management?

Activity durations are a critical piece of information in project management. They are the basis for the creation of the project schedule and help determine the time it takes to complete deliverables. If the critical path technique is used to develop the overall schedule, the duration estimates of activities that are part of the critical path directly affect the whole project’s timeline. Thus, a high level of accuracy is recommended for the duration estimates related to these activities (source).

Duration estimates on the activity level also help test whether work can be performed under a given set of constraints. For instance, a project often has a predefined completion date and set of deliverables. The project is then broken down all the way to the level of activities where resources are estimated and assigned as well. Estimating the duration of activities implies a check whether the combination of assigned resources, expected outcomes and other constraints are workable.

As duration estimates refer to activities, further scheduling techniques need to be used to determine the duration of the entire project. Activity duration estimates are an input to these methods.

Activity durations may also serve as a basis for cost estimates. This is the case where cost is determined as a product of time and resource cost per time unit. This is a common approach bottom-up cost estimating, for instance.

How Can Activity Durations Be Shortened?

There are several ways to shorten the time it takes to complete activities. The different approaches can be grouped into three categories:

  • Narrowing the scope of the work of an activity,
  • Increasing the amount or number of resources for that activity, and
  • Increasing the efficiency of the work.

Activities are usually planned after the work breakdown structure has been completed. Every activity is linked to a work package that is supposed to produce a deliverable or parts of a deliverable.

Therefore, changes to the scope would be a rather drastic step at the point when activity durations are estimated. However, estimating durations can help shifting steps and procedures between activities if this increases the overall productivity and, therefore, lowers the duration.

There are also numerous other ways to increase efficiency which may include but not be limited to automation of work, a higher skill level of resources, improved working environment (e.g. collocation), optimization of the sourcing of materials and products, better quality assurance, etc.

A common way to shorten activity durations is to raise the number of resources assigned to an activity. This is particularly common for labor-intensive types of work.

In practice, there are certain limitations to the effects of such measures. New team members would have to have a fitting skill level. They would also need some onboarding which would affect other members’ time to do their own work.

The PMBOK also lists the law of diminishing marginal returns – this means that the additional (marginal) productivity gain decreases with every newly added resource.

Conclusion

Estimating the duration of activities is crucial to prepare the schedule of a project. In the early stages of a project, it can also serve as a test for high-level assumptions. Thus, the need for adjustments (e.g. resource assignments) can be made transparent.

The techniques used for duration estimating are also applicable to cost estimates, and the PMBOK is regularly cross-referencing between both chapters.

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If you are preparing for your PMP exam, you should therefore familiarize yourself with these methods.