The team can be composed of project team members, experienced personnel of the performing organization, as well as experts from outside qualified agencies. The expert team needs to use methodological tools and approaches to develop their expenditure forecasts. Project cost estimation sheets should be developed utilizing a clearly defined statement of work. This principle assumes that only a skilled, interdisciplinary team should produce cost predictions and make calculations.
#Principle app proicing software
This software will also allow considering risks by producing accurate contingencies in cost estimates that may be used later on for developing a risk management plan. A kind of cost estimation software can be used to associate each cost with potential risks or uncertainties surrounding the project. For this purpose an exhaustive method of assessing and re-assessing project risks and uncertainties should be employed. Uncertainty and RiskĪny type of project cost should be identified and included in an estimate considering uncertainty and risk. By following this principle, all information used for developing estimates can be thoroughly considered, filtered and refined in order to get the most accurate and relevant pieces of that information. When a planner develops an estimate, engineering judgement and technical advice should be applied to any assumption made at that estimate. The development of cost estimates should be based only on the best information available.
This principle allows avoiding false precision and rash decisions by integrating all people involved in the process into a team which works as a single mechanism and uses the same sources of information.
Any uncertainties and vagueness associated with the estimate should be explained in an easy-to-understand manner and in laymen’s terms. Here are the key principles:Īny cost estimate should be produced with a high standard of ethical integrity and by following an open and transparent process. The estimation process complies with a set of principles which act as a foundation for identifying and calculating right project expenses. The Underlying Principles of Cost Estimating Logical and reasonable cost estimates will allow the team to make collaborative effort with a reduced probability of risk occurrence and failure because the estimators use various efficient methodologies to fight uncertainty, prevent performance bottlenecks, determine budget and control spending. The necessity of calculating expenses consists in maintaining confidence and trust that project activities are performed properly and as expected throughout the entire project life-cycle.
Cost forecasts and projections are used to establish a set of metrics against which project success will be measured, and to communicate work progress to the stakeholders at any given point in time. The process of project cost estimation is central to setting up the foundation for making key decisions, taking initiatives, budgeting activities and controlling expenditures. The Underlying Principles of Cost Estimating.
0 kommentar(er)
