PROJECT MANAGEMENT ESTIMATION METHODS

Project Management Estimation Methods

Project Management Estimation Methods

Abstract

Estimation is the process of calculating the approximate time and the cost for completing a project. One of the most crucial—and difficult—activities in project management is estimating the time it will take to complete a particular task. Since a resource generally performs a particular task, a cost associated with that particular resource must be allocated as part of the time it takes to complete that task. The time estimated to complete a particular task will have a direct bearing on the project's budget as well. There is substantial evidence suggesting poor estimates are a major contributor to projects that have failed. Therefore, every effort should be made to see that initial estimates are as accurate as possible since the choice of no estimates leaves a great deal to luck and is not palatable to serious project managers. Even though a project has never been done before, a manager can follow seven guidelines to develop useful work package estimates.

Introduction

Estimating is a process of calculating the likely cost of a project. It may be a formal or informal process. The act of determining the likely cost of Project Management on behalf of either clients or contractors. It may also be called the determining the probable cost of future work. Project management and planning requires estimation. An estimate is a projection from past projects to a future project, suitably adjusted to account for differences between past projects and the future one. Adjustment factors must be applied to the projection because the future software project is always different from past ones. Three fundamental factors to be balanced in making an estimate are the requirements to be satisfied by the software to be developed, the time needed to conduct the project, and the numbers and types of required resources. Estimation techniques include structure planning, risk assessment, parametric estimating, Delphi method, compartmentalization, analogy based estimation. (Applegate 2008, 15-20)

Discussion

In project management, correct estimations are the foundation of good planning of any project. Once the project deliverables and activities have been defined, the next step in developing the project schedule and budget is to estimate each activity's duration. One of the most crucial—and difficult—activities in project management is estimating the time it will take to complete a particular task. Since a resource generally performs a particular task, a cost associated with that particular resource must be allocated as part of the time it takes to complete that task. The time estimated to complete a particular task will have a direct bearing on the project's budget as well (Rad 2001, 47). Various procedures have been made to assist project managers in constructing exact estimations, for instance:

1. Structure Plan

Structured Planning is a procedure for structuring, discovering, communicating and using the information essential for planning and design. It is a front-end procedure for growing notions.

2. Risk Assessment

Risk assessment is an action in a risk management process. It is the grit of qualitative or quantitative risk value associated with a real ...