Narrative Estimating

What do you mean: “Where is the storyboard?”, the cost engineer asked while being entangled in a website development process. The information manager explained. The cost engineer saw a link between the structured estimating methods which were already developed in his offices, and the method of using a storyboard to define a interactive website. The concept of narrative estimating was established.

The modern world relies on quick and accurate data-to-information conversion to enable sound decisions. The accuracy, reliability and credibility of information to consider in making a decision, is crucial.

The capital costs of engineering and building projects are high, and money spent incorrectly is forever wasted. The costs of abortive design and lost time in the initial phases of a project is a waste factor that is deemed to be unavoidable. A sort of an accepted nuisance.

An engineering project is particularly sensitive to this form of waste, since there are so many options and large cost differences both in capital expenditure (capex) and income potential to be considered. Two variables have to be controlled to contain this waste:

  • The time passing by while engineering and designing an option to a state of reasonable estimating and evaluation
  • The effort (cost of engineering, drafting and the like) to outline the design for estimation and evaluation
Narrative estimating is an inhouse term given to the approach that had been adopted recently to overcome the upfront waste problem. This method entails a workshopping approach to use available knowledge and experience from the project team members, combined with members consulted on specific issues, to draft estimates in realtime by discussing and debating the proposals.

In its simplest explanation, a narrative estimate for engineering is the result of talking about a proposed process plant and agreeing on the likelihood that certain amounts would reasonably represent the cost of the plant.

It requires the following:

  • A project manager that understand the value of fuzzy logic and can clearly distinguish between the purposes of different levels of estimates.
  • Discipline engineers experienced in their disciplines regarding the process and plant to be considered.
  • Facilitator that direct discussions to come to provisional conclusions without falling into details inappropriate to the level of estimating required at this stage.
  • Cost engineering translator that can in realtime convert discussions into quantitive and cost data.
  • Elementally structured cost data and a clearly defined high-level cost structure to serve as road map for discussions.
  • On-screen live projected cost structure which is filled in and developed as the discussion progresses, so that the whole meeting see the estimate developing. (The meeting takes joint responsibility for the estimate, thus questioning of items and values inserted in the estimate, is part of a ongoing realtime testing process).
  • Mutual trust between the team participants.

The process is rather simple on the surface: sketch an outline of the proposed plant in a flow diagram and rough general arrangement, and then discuss the requirements to engineer, design, procure, construct and install the proposed plant. If the appropriate experience and domain knowledge is available in the meeting, it is amazing to what accuracy various estimates can be drafted, based on prior experience and jointly deciding on the quantitive and cost shots being called.

Process and structure proposals can be changed within the estimating process: it encourages lateral thinking and testing new ideas. The live nature of the estimate allows for experiments all the time.

A narrative estimate provides a reliable tool for ranking, and where ranking is not clear, at least the number of options that require further investigations and thus consumes time as well as engineering and design costs, are reduced. The result of a narrative estimate is also very useful in determining the amounts for capital notification requests. It can be reported in a structured and defined manner, compared to an overall lump sum often used in such early notifications.

The above are only brief notes on a method that use underlying sophistication to simplify the process itself. For more information on narrative estimating, contact VDDB at their offices in Centurion, South Africa.

Leonard van der Dussen

About Us

VDDB provides project structuring, execution and control services that makes projects predictable and controllable. Some clients prefer the full project office function, including procedures, procurement, contract administration, policies and general project execution and co-ordination, and use selected services.

Skills

The concept of analytical quantity surveying is one of numerous enhanced services where traditional skills are merged with information management tooling to provide strongly enhanced project services in a fast world which is keen for optimisation.

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  • Phone:
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  • Mail:
    navrae@vddb.co.za
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    78 Kalkoen Street, , Monument Park X2, Pretoia, South Africa, 0157