Estimates provide the basis for your business to secure work that clients wouldn't award without a sense of the costs their projects can engender. How you estimate affects how much you estimate and how accurately you can document prospective costs. Two of the most common estimation methods, bottom-up and top-down estimating, offer differing processes, advantages and disadvantages that can help you decide which to use when. The nature of an individual project and its specifications also factor into that decision.
How to Use Bottom-up Estimating: A Step-by-Step Guide | The Blueprint
Estimating costs is one of the most important processes in project management. You can use it for many purposes like if an organization wants to know the cost to quote the correct price when bidding for a project. You may need to use this process in the middle of the project in the event of major changes. It can be repeated any time when the need arises. On the surface, this process looks difficult, but you have several techniques to accomplish this task.
Cost Estimation Methods and Tools in Project Management
Estimating the project cost can be a scaring exercise for many managers. It is often seen that many project managers across the industries burn the midnight oil to prepare a perfect estimation. Despite all the efforts, when the project cost exceeds the estimated budget, they face a lot of flak from all the corners.
Estimating cost is an important process in project management as it is the basis for determining and controlling the project budget. Costs are estimated for the first time at the beginning of a project or even before a project has started. Subsequently, the re- estimation of the project cost is repeated on an ongoing basis to account for more detailed information or changes to the scope or timeline.
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