Chris Croft
Tips of the Month Archive

Project Management Tip 8


Blow your own trumpet

Be assertive at the start

What is a Gantt Chart?

Avoiding people problems

Listing all the tasks

Internal projects

How to discover the key project driver

Three methods of project costing

Why I love Gantt charts

Three ways to handle uncertainty

Overspend or underspend?

Why PM is difficult

My instant guide

Why review?

Some eccentric PM abbreviations

What exactly is a PID?

Its never too late to plan

Why PM is good

Good questions to ask a project manager

Project costing.

There's no magic way to estimate the cost of a project, but if you use two or three ways and then compare them you are probably more likely to get nearer to reality.

Method 1:
From the ground up, activity by activity.
Make a list of every activity that forms part of the project (and you'll probably miss a few so maybe you should add 10% to the finished total) and costs for those. Smaller things are usually easier to estimate. If stuck on an activity, break it into smaller pieces.

Maybe there is an expert you can ask, or get them to check your estimates.
Maybe a similar project has been done before, or at least one with some of the tasks being similar, so you can compare your estimates.

Method 2:
Team size x Time.
How many people are you planning to use, and how long do you think the whole thing will take, roughly? Then multiply the two. If the numbers are going to vary (often projects start slowly and then rise to a peak with lots of people, and then the numbers of people dwindle in the finishing stages again) then take an average. This method seems pretty rough but if you are experienced it can be a good double check for method 1.

Method 3:
Gut feel.
Have a guess!
I know this sounds rather unscientific, but from experience you'll know roughly the size of the project compared to others. Someone will have probably set an approximate budget based on this - after all, the question 'How much money is this project worth to us?' should always be asked, probably before any detail pricing.

It might be interesting to do this first, and then see if Method 1 comes in similar.

-> if all three are not the same you've got a problem. And the problem might be with method 1!.

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