The pre-requisites to estimating techniques are
- The pre-requisites for comparative estimating are a set of data from similar projects to act as a benchmark against which we can measure the new project. Ideally, this should be in the same region and using the same technology. For example, is building a block of apartments, we would want a similar block of apartments to act as a comparator. In comparison to other techniques this is not going to be very accurate.
- The first pre-requisites for a parametric estimate is set of historic data that can be used to calculate the cost per unit. This can be from a published set of data, or it can be calculated in-house from several projects over time. The second pre-requisite is an accurate assessment of the quality required. For example, for our apartments, we would need to know the typical cost per sqm for the type of apartment we are building and also an accurate estimate of the total size of the apartments to be built. In comparison to a comparative estimate, this will be more accurate but less so than a bottom-up estimate.
- For a bottom up estimate the pre-requisites are a detailed breakdown of the project into work packages such as the WBS and/or PBS and an understanding of the cost rates to use from the CBS. To do this, we often have to have a fairly good idea what the design is going to look like. For example, in our apartments example, we would need detailed designs for the apartments including any special details such as feature windows and anything else in the design that is non-standard. If the design and the costs used for each element are well known this will be the most accurate estimate.
In a long term project state four causes of estimating error.
- General economic conditions are one of the factors that may cause a change in the cost of a long time scale project. These factors could include inflation or change in commodity process for example.
- Changes in scope are likely to be more prevalent in long time scale projects. These can result in significant changes in the estimated cost of a project.
- Over a long timescale then new legislation can have a significant impact on costs. So, for example, new safety legislation could significantly increase the overheads.
- A change in government can change the objectives and proprieties for a long time scale project, even delaying the start or executing the project more slowly can increase the established costs.