Characteristics of an Estimate
The characteristics of a good estimate are the approximate judgments of the effort, cost, and time to perform a task or a project. Specifically, an estimate:
- Is not a budget. Cost budgeting allocates the cost estimates to individual project components so that they can be measured and managed. Cost estimating determines the approximate costs of resources needed to complete the project activities. You must have your resources planned and costs assessed before you can build a budget.
- Is not a price but a cost factor. An estimate contains all the elements related to the cost of the project. It is not just effort in hours or pricing. You must estimate all cost items and factors such as staff, materials, facilities, and duration of tasks. Cost is internal; pricing is what the sponsor is charged.
- Must be documented. The documentation must contain the assumptions made while developing the estimate.
- Is affected by the duration of the project in terms of how quickly and in what sequence tasks are to be done, and whether they are contiguous or interruptible. Some tasks can be interrupted and have breaks as needed. Ask whether a task is dependent on a fixed completion time, regardless of the number of resources applied, or whether it is effort-based so that with additional effort, it can be completed much faster. Make sure you know what information is needed to determine both the effort and the duration.