Estimate the cost of the project is an art

Master it can improve the credibility of the CIO and his access to the CEO

The best project managers are those that consistently deliver, on time and the predicted cost, projects that meet expectations.

Good project managers are able to anticipate and avoid problems that could destroy the deadline, budget or user acceptance.

The project cost estimate is a very important feature.

To start keep in mind that a good estimate of the cost of a project is an initial forecast of spending the resources needed to run the project. This includes, but is not limited, hand labor, materials, equipment, services and facilities, and specific reserves as provision for inflation and contingencies.

The rule of corporate numbers

Besides this, understand the rule of corporate numbers is vital for anyone who hopes to have a career in management and project management.

Use the rule of corporate numbers mean you should only inform a cost and a time limit if it can meet or surpass them.

To do this when estimating project costs, you have to be in a comfortable position to plan the work – you should be able to break the work into tasks that do not take more than a week, and draw a sketch of three or four levels depth (work breakdown structure). Once you have it, you can probably estimate each task with a reasonable degree of accuracy.

Dealing with contingencies

I must say that if you bothered to follow the rule of corporate numbers, your estimate would be reasonably accurate, except for one critical detail: the contingency. Unsurprisingly projects are extremely rare. Something always happens to throw away the original schedule. A good way to handle this is to add 15% in the forecast for contingency costs. This fat can be instrumental in time of project budget management.

Dealing with complexity

One more thing: some projects are so complex that understand them well enough to estimate its cost would require more time and effort than you have to spend. So be prepared to manage well the project budget. A project run without budget management and frequent revisions will be heading for failure.

Prepare the costs of a project is more an art than a science. But after he got used to it, can be fun. And can improve your credibility and your access to the CEO.

Full article: http://cio.com.br/

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