Three-point estimation is a strategy for estimating the time or effort required for a task by evaluating three possible outcomes: optimistic, pessimistic, and most likely. This strategy is commonly used in Agile organizations for more precise forecasting, particularly where uncertainty occurs. Here's how a three-point estimate works using real-world examples:
- Optimistic Estimate (O) - This is the best-case scenario, assuming that everything goes smoothly and no problems develop. For example, if you are predicting the time required to develop a feature in an IT project, an optimistic estimate could be two days, assuming everything goes as planned.
- Pessimistic Estimate (P) - This is the worst-case scenario in which everything that could go wrong occurs. The pessimistic estimate for the same feature development is that it may take 7 days if the team encounters problems such as delays, unclear requirements, or technological concerns.
- Most Likely Estimate (M) - This is the estimate that you believe is most likely based on your present understanding of the problem. The most likely estimate for feature development would be four days.
- Calculate Expected Time Using the Three-Point Estimation Formula: Expected time=(O+4M+P)/6 For this example, the estimated time to develop the feature is: Expected time= (2+4(4)+7)/6= (2+16+7)/6=25/6 ≈4.17 days
Three-point estimation allows IT project managers to account for uncertainty and provide more realistic projections, resulting in improved project planning and delivery accuracy.
