What is an estimate?
An estimate as a noun is an approximate calculation or judgment of the value, number, quantity, or extent of something.
An estimate as a verb is to roughly calculate or judge the value, number, quantity, or extent of.
But those estimates, nouns, and verbs themselves's have other attributes. They have precision and accuracy
We can't talk about estimates or estimate, without also talking about the precision and accuracy of the estimate (the noun) after we have performed the estimate (the verb).
The precision and accuracy of the desired estimate and the produced estimate, the noun, before and after the verb estimate, needs to be determined by those making and those asking for the estimate.
The best starting point for determining the NEEDED precision and accuracy is to determine the Value at Risk.
If I'm risking two weeks of work for the Scrum team of 5 people it's a much different need from the risk of a $10B manned spaceflight program being supported to congress for budget authorization.
This is course is why we develop software for that manned spaceflight program using Scrum, because delivering small pieces of functionality on small grained boundaries greatly reduces the risk of being overbudget and behind schedule, and answers to critical success factor question
How long are we willing to wait before we find out we're late?
Answer 2 weeks. Every two weeks there is a mid-month flash report sent to NASA. Every month there is a Month End reports, both showing cumulative cost to date, cumulative schedule performance, and Physical Percent Complete.
Estimating and the resulting Estimates must be described by their accuracy and precision. If you hear any other description, like estimates can't be precise, or estimates are never accurate, those words are mathematically incorrect.
Point estimates without variance (accuracy and precision) are never right
Don't fall into the trap that estimates are wrong, estimates are not precise, precise estimates are a waste or any other malarkey about estimates that don't include the measures of precision and accuracy.
Finally, the accuracy and precision themselves have accuracy and precision. This is the error on the error - the confidence in the error - that is needed.
When you hear pushback from someone about not needing to estimate, perhaps asking in what domain do you work where estimates are not needed will help make a connection.
Here's a range of domains, on the far left, estimates may not be needed. On the far right, they are.
To learn more about estimating on Agile programs read Chapter 5 of the bibliography below. There you'll also find materials on risk management, capabilities-based planning, and other agile processes as they are applied to Software Intensive System of System for mission critical programs where we work.