What is Project Cost Estimating
Project cost estimating the is the process in which project total cost is established before starting of the project so that funding for execution of project can be confirmed and arranged. It is very important aspect of the Project as the variance in the project cost derails the whole objective of the project. Wrong initial project estimation can cause derailment of the project during execution and can cause premature closing of the project. So, it is always required that the project cost estimated during the planning stage should be established as accurate as it can be so that during the execution of the project there is no haywire variance in the cost baseline.
Type of estimate
Estimate types are based on their accuracy level and method of the estimating. Rough order of magnitude estimates ranges from -25% to +50 % but it is used at the time of initiation of the project. Parametric cost estimation and analogous cost estimation are based on the earlier executed project estimates and can be a good source of the project estimation at the initial planning phase of the project. However, the bottom up cost estimating is the most accurate cost estimation process in which cost is estimated after establishment of complete scope and schedule baselines. In this cost estimates for individual work packages are determined and then it is added up to the project top level as per WBS chart for estimating the complete Project cost estimate. Accuracy range for this type of estimate is between -5% to +10%.
Realistic to execution
A Project estimates should always be realistic and it should not be made to please any one. It should reflect actual planned Project cost which is required to complete the project completing all the planned project scope. It should be based on the present and forecasted economy and market demand situation. It should take care of the effect of the seasons on the demand of the manpower and machine resources as well effect of inflation of the price of material resources.
Effect of proper cost estimating
If a Project is estimated properly during the planning stage of the project including adding the contingency plans, it will not vary har wire during the monitoring and controlling process of the project when the project data of the execution process are analyzed. It will be in the range established in the initial planning stage of the project. This will not only give confidence to the client and sponsor of the project but also save the project from derailing from the established project management plan.
What we offer.
We offer a proper realistic cost estimate for your project as per the range identified by the project client or sponsor. Our team associates from initiation of the project up to establishing the cost of each activities and work packages. All additional cost like cost to quality, contingency cost will also be determined as per the prevailing standard and a proper time based budget and funding requirement will be established in planning process of the project. It will not only manage the project properly in the execution phase of the project but also project will be financially stable.