Cpmgt 303 Week 1 Project Estimating Technique Paper

Project Estimating Technique Paper

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CPMGT/303

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Project Estimating Technique Paper

Estimating and managing cost are both important aspects of a project manager’s job.  Project manager’s employer a plethora of tools and techniques to achieve both the estimating and cost management of their assigned projects. Not only is estimating cost important, estimating scheduling, miles stones and the specific project finish times fall within the lines of estimating a projects cost. Project managers need to use different techniques for every phase in a projects lifecycle to insure good information is provided to the stakeholder’s customers, as they are tasked with making good decisions for the outcome of their projects.  

Techniques for Project Estimating

Before beginning project estimations, a project manager needs to have a clear understanding of the project details. It is imperative to verify the scope of the project in detail in order to come up with an accurate project estimate. It is equally important to consider the size, complexity and at what what stage the project will have the greatest impact on when looking at coming up with an accurate estimation for the project. It will be extremely challenging to accurately estimate a project, but there are several techniques project managers can use that will aid in the accuracy during the estimation process.

Judgment expert falls under the responsibilities of the project manager. The judgment of the project manager is instrumental in deciding what business risks need to be or can be managed and which estimating technique will need to be used in order to achieve the best results possible for the project. Top-down estimating is used when estimating the project cost when there is limited detail about a project available. Parametric estimating is based on using historical information to calculate cost estimates. It involves using similar aspects of different projects and applying them to current projects. Parametric estimating is similar to analogous estimating, although it does provide a higher level of accuracy because its base is figured on a statistics, averages, known rates, age of historical data and data sourcing as key elements for accuracy.

Three-point estimating reduces any biases and uncertainties in the estimating process. When using the three-point method, the project manager takes the average from three different estimates to determine and select the one that provides the fewest uncertainties, risks, and biases. Bottom-up estimating is the estimating process that is most often used because it is the most accurate. With bottom-up estimating the cost of each activity is figured starting with the one having the highest level of detail then moves to the lower levels while calculating the complete cost of the project.  The bottom-up estimating process takes the longest amount of time to prepare because of the high level of accuracy attain in its use.