ProPM / Estimate Costs
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ProPM Logo Estimate Costs    
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The Estimate Cost process consists of developing an approximation;

  • Of the monetary resources;
    • Needed to complete project activities.

The key benefit of the Estimate Cost process is that it determines;

  • Total cost required to complete project work.

Cost estimates are predictions based on information known at a given point in time.

  • Include ID & consideration of costing alternatives to initiate and complete project;
  • Cost tradeoffs & risks should be considered;
    • Make versus buy.
    • Buy versus lease.
    • Resource sharing to achieve optimal costs for the project.

Cost estimates should be reviewed & refined during the course of the project.

  • To reflect additional details as they are available;
    • And as assumptions are tested.
    • The accuracy of cost estimates will increase through the project lifecycle.
    • Some organizations have guidelines for refinement and accuracy: +/- 10% etc.

Source of input information comes from outputs of other processes in other knowledge areas;

  • Once received, all of this information remains available as input to all cost mgmt. processes.

Costs are estimated for all resources that will be charged to the project;

  • Labor
  • Materials
  • Equipment
  • Services
  • Facilities
  • Special categories such as;
    • Inflation allowance
    • Cost of financing
    • Contingency costs

A cost estimate is a quantitative assessment;

  • Likely cost for resources required to complete the activity.

Cost estimates may be presented at the activity level or in summary form.

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Cost Management          
Plan execution          
Estimate Costs          
Process Inputs          
Cost Mgmt. Plan          
HR Mgmt. Plan          
Scope baseline          
Project schedule          
Risk register          
enterprise environmental factors          
organizational process assets          
Tools and Techniques          
expert judgment          
Analogous estimating          
Parametric estimating          
Bottom-up estimating          
Three-point estimating          
Reserve analysis          
Cost of quality          
Proj. Mgmt. Software          
Vendor bid analysis          
Group dec. making tech.          
Process Outputs          
Activity cost estimates          
Basis of estimates          
Proj. doc. updates          
Process Benefits          
An iterative process. Determine and know at all times, total cost required to complete project work. Key component of, and assurance that, earned value management is the primary form of cost analysis defined in the cost management plan.          
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