10 tips to create accurate project estimates
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The document provides 10 essential tips for creating accurate project estimates, emphasizing the importance of understanding project priorities, considering risk factors, and performing detailed breakdowns. Project managers are advised to include contingencies, clarify assumptions with their team, and utilize lessons from previous projects to improve accuracy. Additionally, it suggests using multiple estimation techniques and tools to manage projects efficiently.
10 tips to create accurate project estimates
- 1. 10 Tips To Create Accurate Project Estimates
- 2. Contents 1.Introduction 2.Discussing Project Priorities 3.The Numbers Should Not Just Fit The Budget 4.Consider The Risk Factors 5.Detailed Breakdown 6.Follow Proper Process Planning 7.Clarify Assumptions 8.Include Contingency 9.Appreciate The Client Business 10.Include Common Activities
- 3. Introduction ●Project estimation is like predicting the future. Making an accurate project estimate can be a daunting task for project managers. The project estimate is not only affected by known factors like budget, resources, type of project and its scope, but also unknown variables and risks. ●The project manager faces several challenges while estimating. However, accurate project estimate is essential for the success of the project and the organization. With the right project estimation techniques, the project manager can accurately make the estimations. Here are a few tips for accurate project estimation.
- 4. Discussing Project Priorities ●To create accurate estimation for the project, you need to elucidate the project priorities. For instance, in a project you can afford to incur more costs but cannot extend the time period. ●You have to let your team know the priority so that they can create an effective project estimate to accomplish the project successfully.
- 5. The Numbers Shouldn’t Just Fit The Budget ●It is a tendency of project managers to keep the estimate numbers within the boundaries of the budget. This type of project estimate may look idealistic on papers, but in the practical world it doesn’t serve any purpose and it becomes difficult to justify any excess later on. ●If the budget cannot be altered, try to find out what can be done within the limited budget.
- 6. Consider The Risk Factors ●There are inherent risks in projects. Some of the risks are known to your team and some of them will be hidden. A quick risk assessment is not fruitful in such cases. ●Your team has to be aware of risk management to create an accurate project estimate. You have to implement the proper risk mitigation plan in your project estimate.
- 7. Detailed Breakdown ●Make sure to perform detailed breakdown analysis of the project. The more detailed breakdown will result in more accurate estimation.
- 8. Follow Proper Process Planning ●After breaking down the project in smaller components, the three scenarios for each component must be analyzed – worst case scenario, best case scenario and most likely scenario. ●This analysis should be done especially for those components which are relatively risky or new for the team.
- 9. Clarify Assumptions ●Make sure that you and your team are on same page when creating project estimates. ●For instance if your team gives you an estimate of successfully completing a task in a given time, make sure that their assumptions of the task matches yours.
- 10. Include Contingency ●Always include contingency in your project estimates. Contingency can be in terms of cost, man hours and resources.
- 11. Appreciate The Client’s Business ●Being polite to the clients while asking for money is the best way to get paid quicker while keeping the professionalism intact. ●Always add a “Thank You” note at the end of an invoice and let the client know that you appreciate the business. One may further add another line by asking the clients for their feedback.
- 12. Include Common Activities ●When making project estimations, the project manager usually overlooks common activities like meetings, edits etc. ●However, these activities are quite frequent in any project and must be considered in project estimation.
- 13. Use The Lessons and Data From Previous Projects ●If an owner is registered for VAT, then he must include his VAT details, on the invoice, and keep copies of all the sales invoices, even if they get cancelled or get produced extra by mistake.
- 14. Use The Lessons and Data From Previous Projects ●Reviewing the information from similar projects you have done before will help in creating better project estimates. ●If there is a task you have done before, you will have a clear idea about how much cost, resources and hours it will take to complete the task.
- 15. More Than One Technique ●Always use more than one project estimation technique to create project estimations. This will help you make your project estimation more accurately.
- 16. Choose The Right Tool All the above mentioned activities become cumbersome when traditional methods of project management. Using a project management application helps managing and billing for projects more accurately and efficiently.
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- 18. Thanks You :)