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Padding is extra time or cost added to an estimate because the estimator does not have enough information
I do that sometimes only to mitigate identified posible risks.
I have not used this concept
according to the amout of uncertainty, then we can decide to use padding or not.
if there is a little amount of uncertainty, then no need for padding.
I do as safety tools, to tolerate my expectations and deadlines.
I create3 times and maintain3 records for each project seperately.
I follow guesstimates
- Identify3 values for each task in the WBS. Optimistic, pessimistic and most-likely time (Optimistic and pessimistic time will have2%-20% of chances of happening depending on the industry strength in that project. Bid manager/Estimator should know this tolerance level)
- Once identified, identify the Time expected as [(optimistic+(4*mostlikely)+pessimistic)/6] for each task
- Identify the variance expected as [square of ((pessimistic-optimistic)/6)] for each task
- Identify the standard deviation as [square root (variance expected)] for each task (Solution would be +or- some number)
Time for team = (Time Expected - Standard Deviation)
Time for management & for original record purpose = (Time expected)
Time for clients = (Time Expected + Standard Deviation)
This has helped me win projects and complete projects safely within time. Worked completely well upto projects worth around USD0.5M.
If you are adding extra time or cost to an activity to mitigate identified risk then this is called Contingency Reserve and not padding.
Following a proper risk management process will assign required reserves to these activities instead of following this unprofessional habit.