… at least in your customers mind it is. One of the true joys of my job is the constant learning, and therefore the constant need to attend webinars and presentations to get new information. Sadly, a lot of what people present at a webinar isn’t new information but a rehash of old stuff. Still, you have to keep attending just in case you ever discover something new. At any rate, I was attending a webinar today about what measurements your organization should have. One of the things the presenter said, and that I blanched at, was “an estimate is not a prediction.”
Yeah right. I understand where he’s coming from which is “there are lots of unknowns and things change and complications come up so estimates aren’t perfect” but that’s not the same as “an estimate is not a prediction.” It most certainly is!
If I were a contractor and estimated a job, let’s say to install a new bathroom in your house, and I told you it’d cost $15,000 you would expect the final price to come in around $15,000. You then look at your bank account, your other upcoming expenses, the amount of the loan the bank will give you, etc. and make a decision (informed or not) about whether you should do this project. If the estimate is $30k you make a different decision possibly. I’m sure there are people out there who shrug and say “well, they said $15k but it ended up being $30k. C’est la vie.” I’m not one of those people and I suspect most people (whether they act on their frustration about the final result or not) aren’t either.
No reasonable person can do business if you make an estimate and then consistently don’t achieve that goal. Why bother estimating if you can’t predict the cost? That’s not to say you won’t some times screw up the estimate, but the goal of the estimate is to provide a realistic picture of what the final cost of the project will be when it is complete. What person wants to do business with someone who “estimates” X dollars but then might actually cost 2X or 10X that “estimate”? Money is valuable because it is a scarce resource, and that means I don’t have an unlimited amount of it to continue throwing at you because you couldn’t predict your costs.
If anyone tells you that you shouldn’t rely on the estimate they gave you, DON’T DO BUSINESS WITH THEM. With the exception of items whose input costs are already known (an item that has already been created such as a can of beans or a television), much of what we do is agree to trade money for labor/expertise in a familiar but unique situation. We understand that there are some unknowns in the request that need to be accounted for in the estimate, but you can’t just throw the estimate out the window having made it. The PREDICTION of cost is exactly what we are looking for with an estimate to make a business decision. What the hell else is an estimate for?
Posted by ProcessRants 