Estimation is one of the hidden costs that eats into your outsourcing costs. More often poor hands offs of scope and requirements result in piquant situation like these. The classic case of missing out on key documentation, missing links in handoffs, lack of attention to details and then the blame game begins. It is extremely important to ensure adequate checks and balances be it via simple team communications using collaborations tools, IM, chat, few phone calls along the way as you progress on estimations thru deliverables be it small, large or medium size projects or just plain simple deliverables.

Be it managed services proposal, time and material, project or program the chances that your estimation is (+) or (-) 5% is almost ruled out. This impacts both sides depending on who went wrong with their strategy.

Check when was the last time you had a project execution right on target 10 (+) or (-). A greater majority of the projects you will see go off the tangent. Precisely due to the above factors. At times the culture of padding every step which exponentially increases the estimates is common. The idea is with so much padding you are going to be successful which is not often the case. Not going into details or following a scientific process to estimate is a risk. Not very project needs to go into a functional point estimation which could be overkill, use plain best practice methods to understand work packets, break down to component level or any lower level that wont fluctuate your estimations Create your own template if you don’t have one and be consistent, run it by a peer, get reviews done and plug in feedback.

Predictable outcomes always comes from good estimations, not to mention quality of the deliverable. Poor estimations run of risk of cutting corners to achieve the end goal.
Writing good estimation needs to be developed as a culture and getting to a point of having offshore teams deliver better estimations is a discipline that will pay huge dividends. It saves time, money and frustrations, helps improve team spirit and motivate teams to do better via customer satisfaction.