You’ve probably heard the shortest joke in the IT industry. It goes like this: “I’m almost done”.
When doing BI and Performance Management projects with our clients, we occasionally have the same problem. Projects take longer than we (or our client) anticipated and there is a variety of possible reasons: technical problems with the software or installation, data quality problems on the ETL side, or incomplete requirement specifications. Or different role perception: We see ourselves as coaches for the Palo-BI Suite and we expect the customer to do part of the work, especially at later phases of the project, while the customer expects to be handed over a 100% completed project.
20 years ago, to cope with this and similar types of issues, my brother Peter (former CEO and founder of MIS AG who unfortunately died in a car accident in 2004) came up with a surprisingly easy formula to calculate realistic project duration (both for internal software development projects as well as consulting projects with clients). Simply take the gut feeling of the developer or the consultant and multiply the number of days or weeks that he thinks are realistic with pi (3,1415). In other words, if somebody thinks 10 days are realistic, the project will most probably take 31,5 days.
20 years after Peter had told me about this rule, I finally had a look at the theory behind it. In my opinion it goes like this: If a person takes an educated guess about how long it will take, he will automatically just see the work to get 80% or 90% of the desired functionality done. He simply neglects the 10% to 20% percent that is needed to make the product or the project 100% perfect. But how long will it take to complete these 10%-20%? Very long as you can see in the following drawing which shows a typical curve based on the Pareto principle (80/20 rule). Doing between 80% to 90% of the work will only take you around a third of the total effort (MD gf stands for man days estimated using gut feeling)
So if you only look at 80% to 90% of the total functionality you will come to the conclusion that the project will only take you 33% of the time it actually really would if you look at the 100% result. That is where pi comes into play. Multiply the number of days a developer or a consultant estimates for the project by the magic 3,1415 and you most probably have a realistic amout of time it will take to really get done 100%. The following drawing explains this.
PS: At Jedox we decided to multiply the “gut feeling” estimate by 2. This is not pi but then we also have a clause in our general terms of contract where we ask for an additionaly 60% range that we can charge above our original estimate. And 2 x 160% roughly equals pi.
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