One of the vital roles of a project manager is to learn how to estimate project cost and duration. He must also learn how to do it accurately. While it is a fact that the more experiences you have in a specific type of project, the more knowledgeable you are in terms of how these processes start and when they can end as well as how much budget they need to be completed.
If you are not an experienced project manager, there are various programs now that can assist you in providing an accurate estimate of the cost and duration of any project that you might be assigned to manage. Projects involve various dynamic aspects but they are also limited by finite conditions and these opposing forces makes an accurate estimate very challenging.
Reasons Why Estimating is a Challenge
Even if project managers have various experiences in projects and there are tools that can help us provide an accurate estimate, experienced project managers still have a hard time giving their clients a very accurate estimate. One of the reasons is the knowledge that there are hidden or unknown variables that might come up and they are difficult to resolve and this will adversely affect the cost and duration of any project.
Another reason is that we tend to become idealistic of our own capabilities. Oftentimes, we believe that we can achieve more than what is actually possible in a given period of time. The last reason is the human nature’s desire to please other people by giving them the information they want to hear.
Tips in Increasing Accuracy in Estimating
The use of project plans and specifications are very helpful in estimation.
- Always keep a record of the number of hours used on specific tasks to have an idea for future projects.
- A task analysis of the task is important so that unnecessary and repetitive procedures are removed and the whole process is improved.
- When giving an estimate, identify assumptions and possible constraints that can accompany the calculations after which anything out of scope is not covered by the estimate.
- Analogous Estimating. This is the method of recording the hours spent on tasks and noting down the expenses of projects so when there is a similar project in the future, the records can serve as references for estimating.
- Parametric Estimating. Without any previous records and reports of the actual number of hours spent and expenses on a similar project, the other way to do it is to find public information that is relevant to the project.
- Bottom-Up Estimating. Meet up with people who have experiences doing the tasks and let them give the estimates for this project. They will be accountable to the estimate or budget that they have created.
Estimating the cost and duration of the project can be overwhelming especially for someone who don’t have the experiences needed to estimate a certain project. However, it isn’t very difficult and eventually, the effective project manager can learn how to estimate any project almost accurately.