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Why We're So Bad at Estimating Time - and How to Solve it in Jira

We’re all guilty of it: we consistently underestimate how long projects and tasks will take us to finish. Whether at work, at school or at home, we’re simply unable to gauge the amount of time needed to complete something. 

There’s even a name for this phenomenon: it’s called the planning fallacy. It comes from the work of psychologists Amos Tversky and Daniel Kahneman in their 1979 paper and has spawned significant research since.

According to Kahneman’s book Thinking Fast and Slow, for instance, one study showed that the typical homeowner expects home improvement projects to cost about $19,000, whereas the true average cost is closer to $39,000. Similarly, the overwhelming majority of high-speed railroad projects have an average overestimation of passengers that sits at 100 percent and budgetary underestimation of about 50 percent.

“The planning fallacy is that you make a plan, which is usually a best-case scenario,” Kahneman writes. “Then you assume that the outcome will follow your plan, even when you should know better.”

“[S]tatistics show that you probably will end up spending twice as much money and time as you have budgeted,” he continues.  

So what causes the planning fallacy?

Scope creep

Scope creep is caused in part by underestimating the complexity of a project at the outset. 

Planning focalism

Planning focalism happens when people do not consider similar past tasks that took longer to complete than expected.

Natural optimism

Natural optimism is the tendency to assume that projects will go smoothly, without any problems or changes. 

Motivated reasoning

Motivated reasoning is the tendency to make optimistic estimates because you are incentivized to do so. Managers want to see work completed as quickly as possible.

 

How to estimate time accurately

The fact is that most of us see ourselves as more skilled than we really are and assume that the goals we set out for ourselves are readily achievable. So, if you find your timelines are always underestimated, what can you do?

Look to the past

One way to avoid the planning fallacy is to get information about similar projects you have finished in the past so you can compare them and make projections. If you want to know how long it would take your employees to finish a piece of code, for example, simply look at how long similar tasks have taken them before. This is where time tracking software can be especially useful. 

Assume the worst-case scenario

Success is much easier to imagine than failure. When estimating how long a given task will take, allow for interruptions and roadblocks along the way. Do not assume everything will go as smoothly as you imagine.

Get multiple estimates

People are poor at guessing how long their own projects will take, but they’re reasonably good at guessing about other people. That’s why planning poker is a helpful agile practice for determining how long a project will take. In planning poker, each participant gets a set of cards with numbers and chooses one of them to estimate the effort for a given task. People can compare and discuss their estimates together in order to avoid the planning fallacy. 

Measure your progress

Track time and costs closely so that as the project progresses you can see when and how your estimates begin to go off-track. The sooner you can intervene, the better. Measuring your progress will also serve as valuable information for any future estimates you make. 

Try time tracking software for better time estimation

It takes experience to accurately estimate time, and projects will virtually always take longer than originally imagined. If you’re working in Jira, Tempo’s time tracking and resource planning software can help you get a handle on how long tasks and projects actually take.

The ultimate guide to Tempo Timesheets time tracking software

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