Project estimating and cost management for dummies pdf download

But in general, it describes the problems that are typical of Agile and Scrum as well as shows the ways to solve them. Follow the link and find more books on Agile project management. If you start out your way in the complicated world of project management, this is the basic book for you.

It describes ideas in a simple way what makes it even more useful. Written by an expert in project management and a specialist in writing instructional texts, the book creates an environment where it is possible to gain knowledge that will help to manage projects in the online, global, and multicultural setting. It may have an impact on you and probably your career next year. This short summary will give you a hint whether it is a good fit for you right now.

However, we are sure that this is a must-read book for all project managers and business owners! It provides with the practical context to move from the theory to the practice itself. Also, it explains when exactly you need to use Agile and how to avoid pitfalls in project management.

Cookies help us deliver our services. By using our services, you agree to our use of cookies. Read more in Privacy policy. This site uses technical cookies and allows the sending of 'third-party' cookies. By continuing to browse, you accept the use of cookies. For more information or to refuse consent to some or all cookies, see the dedicated section. Get started for free.

Read also. Gantt Chart vs. Notify of. Inline Feedbacks. No obligation. Support Help center Terms of service Privacy policy Security. For instance, if the comparability of previous work and the current project is assessed or adjustments to parametric estimates are determined. Analogous estimating refers to the use of observed cost figures and related values in previous projects or portions of a project. In order to be accurate, the type and nature of these reference activities must be comparable with the current project.

This technique uses historical data in the form of values and parameters to determine the expected resource requirements of a current project. The historic values are adopted for the current work and can be adjusted for differences in scope or complexity. Analogous estimating is categorized as a gross value estimating approach.

In general, analogous estimates are used if a project has access to historical data on similar types of work while the details and resources for more accurate estimates in the current project, such as parametric or bottom-up estimating, are not available. Parametric estimating is a statistical approach to determine the expected resource requirements.

It is based on the assumed or proven relationship of parameters and values. Simple examples are the building cost per square foot in construction projects or the implementation cost per data field in IT projects.

The input data can be obtained from previous projects or external data sources such as industry benchmarks or publicly available statistics.

In practice, this technique is employed with a broad variety of sophistication and accuracy. In projects that do not use an explicit statistical correlation analysis, some expert judgment is required to assess whether it would be reasonable to apply the historic parameters to the current project.

Complexities of projects and activities vary and may therefore require certain adjustments. For instance, building a highway in a mountainous region likely produces a higher cost per mile than in a flat area. IT development projects in complex IT architectures or systems tend to require more resources than a less complex environment.

Another consideration concerns the expertise and experience of the project team. If a previous project was delivered by highly skilled and experienced resources while the current team is just at the beginning of its learning curve, using unadjusted historic data may understate the estimated cost.

Similar to analogous estimates, adjustments can be made to adapt the parametric estimates to the current project. Depending on the quality of the input data and its applicability to the current type of work, the parametric estimation technique can produce very accurate figures.

However, the higher the accuracy desired the more resources are needed to perform the data gathering and statistical analyses. Bottom-up estimation refers to a technique that involves estimating the cost at a granular level of work units.

The estimates for all components of a project are then aggregated in order to determine the overall project cost estimate. In practice, these estimates are often performed at the lowest level of the work breakdown structure WBS , e. While there is no clear rule on who should be performing this estimation, it seems to be a good practice in project management: asking those project team members who are operationally in charge of the respective work packages or activities to estimate there on work.

Thus, this approach to estimating costs often comes with significantly higher accuracy than top-down estimations. However, obtaining and aggregating these granular estimates normally requires some resources and can potentially become a political challenge, especially in large or complex projects.

Three-point estimating is a technique that usually leverages on bottom-up estimates, analogous or expert estimates. The concept requires three different points of estimates: the optimistic best case , pessimistic worst case and the most likely cost estimate. This can be done by assuming a triangular distribution, a PERT or beta distribution. Read this article for further explanation and examples of this technique.

Note that the level of detail and granularity of the estimates usually increases throughout the project. In the initiation phase, the rough order of magnitude ROM is often the only type of estimate that can be obtained. Definitive estimates will usually require techniques such as analogous, bottom-up and parametric estimating that may only become available in later stages of a project. Parametric and bottom-up estimates are usually the techniques that provide the most accurate cost projections.

They are commonly used if the budget needs to be revisited and replaced with a new estimate at completion. When a budget is determined and approved, earned value analysis and variance analysis help project managers control the cost and value generated in a project.

You will find more details on the measures and the techniques in this article. What Is a Cost Estimate? What Are the Types of Cost Estimates? Rough Order of Magnitude vs.

ROM and definitive estimate are types of cost estimates with a very different accuracy that are used in different phases of a project. Parametric estimates are often used in construction projects, e. However, differences between the current project and historical projects need to be taken into account when using parametric estimates.

Parametric Estimating Definition, Examples, Uses. Experts estimate the resources needed to complete the work in scope, either as a top-down or a bottom-up estimate.

Using the historic cost per parameter unit to determine the expected cost of the current project.