Project estimation is one of the key aspects of project management and widely used to this day. However, a question often arises that if each project is bound to be unique in its own way, how can we estimate anything about it? The answer to this is that no matter how challenging it is to estimate the size or cost of a project, it is nonetheless possible. Project estimation has a degree of accuracy and with experience and effort, one can sure reach the accuracy level that, at first, feels insurmountable.
According to Wikipedia, project estimation is the foundation of sound project planning and without it, no project can move forward. If project estimation is not done right, the outcome may be achieved very late or a project may exceed the budget indicating a red signal of project failure. To run a thriving business and avoid failure, one must adopt skilled techniques to estimate project as accurately as possible. Being a great estimator is one of the stepping stones in the career of project management.
The very crucial task of project estimation includes scheduling, preparing a budget and resources. Below are a few foolproof techniques that one can acquire to achieve success.
Communication and Advice:
Taking advice from team members or those in the senior position can help estimate to a great level of accuracy. Expert advice mostly leads to correct estimates that inexperienced people otherwise would not be able to give. However, that does not mean excluding team members. But it is always better to inquire people that have in-depth understanding o the nature of the project and hands-on experience with a similar project before.
Parametric Model Estimating:
This estimating technique makes use of data from previous projects and involves a rather mathematical, or statistical, approach. To be precise, it takes data from previous work to determine the unit cost or duration to estimate the budget or duration of a certain task in the current project. It is very accurate in nature because of the statistical approach but it cannot be denied that it does have certain limitations. For instance, it does not take political, cultural or environmental factors into account.
Analogous Estimation:
When used alone, this technique is not as accurate as parametric model estimation. Essentially, it compares the current project to previous projects that are similar in nature to estimate the cost or time frame of the project. While the two techniques, analogous and parametric model, may appear to be same, they are not. Parametric is more statistical in nature. However, the two are similar in terms of making comparisons to the previous projects.
These techniques are inarguably the best from the lot but using only one of them might not produce the desired results. Estimation comes with its own set or risks and the real challenge lies in mastering the art. The best way to go about estimation is to combine the techniques that suit your project. In order to avoid risks, it is advisable to have a certain margin for fluctuation of schedule or budget.