Estimating Project Time and Costs

ESTIMATING PROJECT TIMES AND COSTS Estimating is the process of forecasting or approximating the time and cost of completing project deliverables. Cost, time, and budget estimates are the support for control. Project status reports depend on reliable estimates as the major input for measuring variances and taking corrective action. Inaccurate estimates lead to false expectations and consumer dissatisfaction. There are reasons why estimating time and cost are important. Below are the following:
• Estimates are needed to support good decisions.
• Estimates are needed to schedule work.
• Estimates are needed to determine how long the project should take and its cost.
• Estimates are needed to determine whether the project is worth doing.
• Estimates are needed to develop cash flow needs.
• Estimates are needed to determine how well the project is progressing.
• Estimates are needed to develop time-phased budgets and establish the project baseline.

There are also some factors that influence the quality of estimates. The following are:
• Planning Horizon- It is the time frame for planning strategic activities and for accomplishing strategic goals. In this factor you’ll utilize a work breakdown structure and network diagram. It also includes assigning resources and estimating the work.

• Project Duration- It is the elapsed time from project start date through project finish date. We will be able to know how long the project will take.

• People- It the number of skilled people that will work in the project. Accuracy of estimates depends on the skills of the team or people because a close match of people skills will influence productivity and learning time.

• Project Structure- It is a framework of policies and procedures to break their organizations into manageable groups.

• Padding Estimates- People may increase estimates to take into account unknown risks

• Organization Culture- A pattern of shared basic assumptions, beliefs, values