This article summarises four of the key terms that you'll come across when you start working with project estimates.
Bottom up estimating
This estimating term describes how you break down your project and estimate (as the name suggests) based on the smallest components.
Watch the video here: Bottom up estimating video
This term describes how you can use statistical and logical calculations to work out how long a project will take, based on what you know about the individual activities.
Watch the video here: Parametric estimating video
Analogous estimating relies on previous experience to calculate the estimate.
Watch the video here: Analogous estimating video
Three point estimating
Three point estimating is discussed in more detail in this article but the basic premise is that you use a formula to calculate your overall estimate. The formula is:
This calculation will leave you with a weighted estimate of the budget for the activity (although you could use it for scheduling time and work out your estimate in days). It will be weighted in favour of the most likely cost for that task, but it will also allow for the fact that things might go well – or not.
Questions from PMXPO 2015
In this video I discuss some of the questions raised during my presentation at PMXPO this year.
For more on managing project budgets on the cheap, see this article on communicating on a budget.
In this video I discuss the 6 tools and techniques related to project cost control.
In this video I explain why project managers should be commercially aware.
In this video I talk about the 5 things that you should consider before you start a new professional deal or relationship with a vendor.