Estimation........a ritual?

Have you ever watched reactions from different teams whenever a new opportunity arrives on the desk to respond to? And I am talking here in a typical software service provider environment.

First reaction is from Sales…” It is a great opportunity. We have to win it anyway and price is the deciding factor here. Let us go with very aggressive pricing.”

At the same time Delivery team says …”It is little riskier one. Let us not compromise on schedule. Also we need experienced resources to tackle customer expectations. It is better to go with conservative estimate rather to cut a sorry figure later.”

Quality department says …”Customer expects higher quality of deliverables and let us ensure that sufficient cushion is built for project management, quality assurance, documentation and testing.”

Estimation Group tries to put forth their estimation models & experiences to justify accuracy in estimation with sufficient buffers and validations by delivery team so that no one can point a finger to them tomorrow if anything goes wrong.

Management depending on their style either goes with sales or finds a mean between sales & delivery calls.

All discussions happen around “how much it costs”, “how long it takes”, “how many resources and what skills do we need”.

Is that the right approach? No.

Rather the Estimation Group should take a breather and sit across the table with all concerned i.e. Sales, Delivery, Quality and others involved, discussing first:

-Why the customer wants the project in the first place

-How the contour of the project is defined by the customer i.e. what are included and what are excluded, often an amorphous one

-Why customer wants us to participate in the bid

-Why should we participate …what is in for us

Once the above is fairly understood, then the estimation model and number crunching can happen to come up with reliable and sale-worthy estimates. Estimation is part of the sales process and not a back-office ritual. The onus is on the Estimation Group to see that sales happen in a way to have a win-win scenario for the customer and the firm.