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Primal Skill Project Estimate
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Glossary
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1. TaskThe name of the task that is being estimated, such as "Sign-up implementation" or "Staging environment setup"
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2. Task GroupDefines the group or category of multiple tasks, for example "Front-End tasks" or "Back-end tasks"
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3. Optimistic, Most Likely, Pessimistic (story or effort points)Fibonacci-like points marking the effort it takes a task to be implemented by the developers.
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4. Project VariablesSpecified by the project manager to aid the project's estimation, such as how many team members will work on the project or how many effort points per week a team can deliver.
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5. Duration ConfidenceThe total project duration estimate, expressed in hours and weeks, the algorithm generated based on the input. The confidence percentages adhere to the 68–95–99.7 rule of a normal distribution dataset.
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6. Cost EstimateIllustrates the cost estimate based on the input and on the 68-96-99.7 rule.
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7. PERTProgram Evaluation & Review Technique, one of the main algorithms used to estimate based on the specified story points.
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8. Standard DeviationPERT can be viewed as the mean value, then the standard deviation is the amount of variation from mean.
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9. VarianceVariance is the square of sigma or in this context the standard deviation.
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10. Monte Carlo SimulationThe Monte Carlo algorithm is used to "normalize" and "forecast" the PERT algorithm factoring in the standard deviation value.
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How does it work
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1. Team defines the tasksOnce the team is selected for the project they will define the tasks to be implemented for the project based on the project specifications.
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2. Team estimates the effortThe team members will estimate the effort each task takes specifying the effort points for an "optimistic", "most likely" and "pessimistic" outcome. The estimation process will involve "Yesterday's Weather" for planning with story points. Efforts and story point estimation is used as it is a known fact the humans are much more capable of estimating effort than time duration.

Essentially, the team compares the effort it takes for a task to be implemented to other similar tasks that were implemented in the past on other projects. For example, a "log in" process is similar between many projects and the team is confident in the effort it will take to implement it on this project so they will usually assign smaller story points to the task such as: 3 for optimistic, 5 for most likely and 8 for pessimistic.
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3. Project Manager defines the project variables The project manager will set the following variables:

1. Average Points / Week = the project manager is familiar with the team dynamic and knows how many points the team can deliver on a weekly basis, on average. This value shouldn't be exact as the estimation algorithm will factor it in.

2. Daily Effective Hours / Team Member = the effective hours a team member spends with the project on a daily basis.

3. Team Size = how many members are there in the team that will work on the project.

4. Hourly Rate = an optional hourly rate for estimating the cost of the project.
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4. The workbook formulas generate the results 1. PERT, Standard Deviation and Variance is calculated for each task effort points.
2. Totals are calculated for PERT and Variance by summing up each value, for the standard deviation total the square root of the total variance value is used.
3. Effort points are converted to hours based on the project input variables.
4. A Monte Carlo simulation is executed 5000 times based on the total PERT and Standard Deviation values.
5. A 3 sigma distribution is generated based on the PERT and Standard Deviation values.
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5. Duration estimates are generatedThe duration estimates are generated expressed in hours and weeks showing the total hours or weeks it will take for the project to be implemented at different confidence levels using the 68-96-9.7 rule.

The rule states that the project will take...
1. X amount of hours or less at 68,27% success rate
2. Y amount of hours or less at 95,45% success rate
3. Z amount of hours or less at 99,73% success rate
...to be implemented.
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6. Cost estimastes are generatedThe cost estimate shows the project cost based on the estimated hours at the various confidence levels.
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7. Distribution chart is generatedThe chart illustrates the distribution of hours following the path of normal distribution, also known as a Bell curve.
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