1. Get a clear picture of the work that is being estimated
Many problems with estimation come because the estimator is not really sure what the work entails. You should avoid estimating work that you do not understand. This should not imply that you can know every detail. The estimating contingency is a way to reflect some of the uncertainty.
2. Determine who should be involved in the estimating process
The project manager may or may not know enough to make the estimates on his or her own. It is usually a good practice to look for estimating help from team members, sub-contractors, subject matter experts, etc. This will usually result in the estimates being far more accurate than you would get by yourself.
3. Determine if there are any estimating constraints
If there are estimating constraints, it is important to know them up-front. For instance, the end-date may be fixed. You should also know the level of quality in the deliverables. It is possible that there may be a fixed budget that cannot be increased. This would be of interest so that you can reduce the scope or quality of work, if necessary, to meet the fixed budget. Knowing these constraints will help the estimators make valid assumptions regarding the cost, duration and quality.
4. Consider multiple estimating techniques
There are a number of techniques that can be used to estimate work. If possible, try to use two or more techniques for the estimate. If the estimates from multiple techniques are close, you will have more confidence in your numbers. If the estimates are far apart, you need to review the numbers to see if you are using similar assumptions. In this case, you can also try to utilize a third (and fourth) estimating technique to see if one initial estimate can be validated and the other rejected.
5. Document all assumptions, clarifications and qualifications
You will never know all the details of a project. Therefore, it is important to document all the assumptions, clarifications and qualifications you are making along with the estimate. If you are prepared for the estimating work, and you use good estimating techniques, your estimates will be more accurate. This in turn will allow your managers, sponsors, stakeholders or clients to make better business decisions.