If estimation isn’t part of your day job, you may wonder what kind of contingency profiles your users will need? SLIM-Collaborate ships with an assortment of general purpose, preconfigured profiles that will be sufficient for most users. Here are some guidelines to help you understand the differences between the two types of contingency.
Fixed percentage profiles simply add a proportional (percentage-based) amount of additional effort, cost, or schedule buffer to an existing estimate. They are most appropriate for situations where management reserve is set by corporate policy or directive. An example may help here. Say your firm mandates that internal projects require only minimal schedule or staffing/cost buffer. Your management is more sensitive to cost overruns than schedule overruns. Since schedule slippage has less serious consequences than having to acquire additional staff unexpectedly and exceeding the budget, you might create a 10% schedule, 20% cost contingency profile for these kinds of jobs.
In other situations, the potential consequences of exceeding the planned budget, staffing, or schedule are very much tied to factors like scope creep, scant information on which to base an estimate, etc. For projects like these, it’s reasonable to scale management reserve to the uncertainty around the final delivered size, productivity, or labor rate (cost). Target probability profiles are ideal for these types of estimates, because the amount of buffer required to provide 80% assurance of not exceeding the planned schedule or budget is driven by estimation uncertainty (rather than corporate policy).
For more information about the differences between these two contingency methods, see the Creating a Contingency Profile topic in this user guide.