LECTURESConsulting Skills18

Supplementary course

How to Estimate

Create a state where the customer can choose: line items, good/better/best, alignment

Estimating isn't "the task of producing a number" — it's the task of creating a state where the customer can choose. Break line items into ¥200K–1M units, hand over the right to choose with good/better/best three options, and cycle through aligning and re-estimating as an iterative procedure.

How to Estimate

─ ARTICLE COVER

Consulting SkillsSupplementary course

§I ─ POSITION

Where this course fits

A course that converts the AS-IS / TO-BE / GAP lined up in "Discovery at Project Start" into an estimate the customer can decide on. Hand it off to the next stage, requirements definition, as grounded line items.

§II ─ TAKEAWAYS

What you will learn

  1. 01

    Break line items into ¥200K–1M units, to a granularity where a reduction debate is possible

  2. 02

    Lay out good/better/best three options as "choices the customer can dial down by budget"

  3. 03

    Eliminate expressions that rob the room for debate, like "lump sum" or "infrastructure all-in-one"

  4. 04

    Build it assuming alignment after presentation → re-estimating

§III ─ EXCERPT

Excerpt from the course

01

Core question — can the customer choose with these line items?

Hand over only a single total amount and the customer can only say "expensive" or "cheap." An estimate that hasn't handed over material to choose from is not yet an estimate. The goal of this course is to reach a state where you can ask yourself, "can the customer choose with these line items?"

02

Break line items into ¥200K–1M units

¥200K–1M per line item is standard. Under ¥100K is noise, not worth debating. Conversely, a line item over ¥2M becomes, from the customer's view, a binary of "keep it whole or cut it whole," and a reduction debate becomes impossible. How you break it down itself decides the quality of the estimate.

Line-item sizeStateCustomer's move
~¥100KNoiseNot a subject for debate
¥200K–1MStandardCan debate keeping or cutting
¥2M~Too coarseCan only judge it whole

03

Good/better/best is to leave "options to reduce the price"

Good/better/best is not a sales technique for getting the seller's "best" chosen. You lay them out to hand over the right to choose, so the customer can dial the price down to match their budget. Whether the starting point of the idea is "the seller's convenience" or "the customer's right to choose" changes the quality of the estimate completely.

  • Best: the ideal form (fills the entire GAP)
  • Better: essential features (top priority)
  • Good: minimum start (assumes phasing)

04

"Lump sum" and "infrastructure all-in-one" rob the room for debate

"Lump sum," "all-in-one," "XX management features bundled" are convenient for the side issuing them, but the customer can't see the contents. It becomes impossible later to debate "can we cut just this?"

  • ✗ Infrastructure all-in-one as 1 line → the customer can only judge "all infrastructure"
  • ✓ Split into cloud / licenses / monitoring / servers → realistic reduction ideas like annual license contracts and in-housing monitoring come up for debate

05

Presentation is the "starting point for alignment," not the sign-off

An estimate isn't complete the moment it's issued. It's material for drawing out the customer's priorities (budget-first / feature-first / deadline-first). After presenting, ask "where to cut" and "where to prioritize," and build it assuming re-estimating.

06

Conditions for the handoff from discovery

It assumes AS-IS / TO-BE / GAP are lined up in the prior course, "Discovery at Project Start." Enter estimating without GAP lined up and the rationale for the line items disappears. Check that all three are lined up before you start.

─── Continue in the download edition ───

§∞ ─ DOWNLOAD

Get the full materials, exercises and answers
in the download edition.

─ EXERCISE

A standard 8-file set (principles / slides / cheat sheet / exercises + answers / a catalog of estimating pitfall patterns / a 90-minute test + answers). Experience building 12 line items and good/better/best three options, plus the pitfalls of nested estimates and infrastructure all-in-one, through exercises.

Lecture slides

Every slide of the course

Cheat sheet

Quick reference for the field

Exercises

With answers and grading

Advanced / test

Hands-on plus rubric

INCLUDED PDFS ─ 8files

IT Consulting Guidebook | A Systematic IT Consulting Method Across 18 Lessons, from IR Analysis to PM | IPLoT Inc.