Two concepts that are usually mixed-up
People often mix up accuracy and precision. This is a serious issue for a project manager.
Accuracy indicates how close an estimation is to the true value of a variable, while precision is about how certain you are about your estimation. There is no point in being very confident of a wrong estimate, so keep focus on the estimation accuracy: is it the best you can do?
This illustration shows the four possibilities varying both accuracy and precision:
Poor estimations are a major cause of problems in projects. Unfortunately there are more than way to be wrong about an estimation, but the way it is reported bears significant, implicit information in its quality that the project manager should be aware of.
It is better to be accurate than precise. It is better to be closer to the truth but not so certain about it, than to be very precise but wrong (inaccurate), so beware of the level of precision that suggest a high level of confidence on an estimation that can be untrue.
Example: If the true value is 12.6, is the estimation 12-13 is better than 12.0-12.5? Why?
The first interval, 12-13, is wider but it contains the true value while the second interval, 12.0-12.5, does not contain the true value.
It is usually accepted that it is better to be approximately right than precisely wrong!.
