Learn how to use the topdown and bottomup project management approaches when it comes to estimating project times, resources and. Bottom up estimating is an extremely helpful technique in project management as it allows for the ability to get a more refined estimate of a particular component of work. Flowing up to the enterprise from the project manager at the initiation of a project is commitment. Two estimating techniques that may appear on the pmp, capm, pmisp, and pmirmp exams are analogous estimating and parametric estimating. Compares the current project with past similar projects. Estimating method description analogous estimating generally used at the start of the project when not much is known. Source selection criteria are developed and used to rate or score seller proposals. Bottomup estimating involves the estimation of work at the lowest possible level of detail.
Analogous and parametric estimating techniques are most commonly used methods. These estimates are then aggregated in order to arrive at summary totals. The topdown approach, in my opinion, generates a complete and more accurate wbs. By building detailed cost and time estimates for a work package, the probability of being able to meet the estimated amounts improves substantially.
Analogous estimating is a topdown estimation technique for estimating the cost, resources and durations of projects according to pmbok, 6 th edition, ch. In this article, estimation tools, such as analogous estimating, resource cost rates, and bottom up estimating are explained. We decompose the project objectives, requirements, targets, schedule, budget, and any other key elements down to the lowest level of the wbs. The second process involved with pmbok cost management strategies is cost budgeting. Among all, analogous estimation is the least accurate, and bottomup. Work and resource breakdown structures for formalized bottomup estimating. Pdf work and resource breakdown structures for formalized.
Bottom up estimating is the project management technique of estimating individual tasks and then combining them into an overall project estimate. Lastly, computerized tools can provide great assistance in estimating cost in projects. Free project cost management questions, free pmp chapter 7. Bottomup estimating expert judgment parametric estimating three point estimating. In bottomup estimating, each task is broken down into smaller components. Work breakdown structure,pmi seminar sep 991, p 696 701. This project management knowledge area is known as project human rescource management as described in the pmbok guide 5th edition it is updated in pmbok guide 6th edition as project resource management which reflects more closely what a project manager is required to manage not only the human resource but also other. Analogous to the traditional work breakdown structure, the rbs lists. I say this because it has often been mistakenly written that analogous and top down estimating are the same thing. You will find definitions, detailed description, and examples of these techniques in this post. Bottomup estimating is a way to approximate an overall value by approximating values for smaller components and using the sum total of these.
Pmps use different methods of estimating, depending on the situation. The pmbok defines the cost estimation process as the process of. Analogous estimating use of the metrics from a previous, similar project as the. Summarizes or rolls up detailed costs to higher levels for further reporting and tracking. In order for this concept to work, what goes down must come up. Jan 29, 2019 project estimation is the most fundamental aspect of project management pm. Bottom up estimating is the most accurate form of estimating. You will also get to know about the difference between analogous and parametric estimation. In fact, the pmbok has two separate processes for these two things. The accuracy of bottomup estimating is optimized when individual work packagesactivities are defined in detail. This estimating technique gives the entire project team the opportunity to take part in developing the estimates used to measure their work.
In this approach, the wbs is derived by decomposing the overall project into subprojects or lowerlevel tasks. Project manager is responsible to decide when would the best time using this technique. Both estimating techniques can be used to determine both project cost and project durations. Mar 09, 2020 updated for the new pmp exam thru 2020. While there is a good deal of overlap between the two curricula, there are also significant differences.
Now lets discuss project cost estimation methods in detail. Bottom up estimating is the project management technique of estimating. Analogous estimating vs parametric estimating for pmp exam. Jan 18, 2018 updated for new pmp exam thru 2020 note that the pmbok guide 6th edition has included bottomup estimating as one of the tools and techniques for estimate activity durations process in addition to analogous estimating, parametric estimating and threepoint estimating. Jan 12, 2020 bottom up estimating involves the estimation of work at the lowest possible level of detail. Project management body of knowledge pmbok, cost estimation is the.
Cost estimation methods in project management projectcubicle. This term is defined in the 3rd and the 4th edition of the pmbok. In top downbottom up project management we take this valuable concept further and decompose all of the project elementsnot just the work. Cost estimation techniques for the pmp certification exam. Nov 27, 2019 4 tools to estimate costs in the project management. It can get more complex, though, with the more variables you add. Accuracy of estimates may be improved by considering risk in order to create three estimates. Estimates costs of individual work packages, and these estimates are then totaled or rolled up to higher levels. Cost estimating when creating a budget for a job, project management must be able to engage properly in the process of cost. Bottomup estimating technique bottomup estimating is an extremely helpful technique in project management as it allows for the ability to get a more refined estimate of a particular component of work. Dec 06, 2015 a fresh etc can by found by estimating the cost of remaining unfinished work in the work breakdown structure wbs. Bottom up estimating creating detailed estimates for each part of an activity or work package and rolling the estimates into work packages and control accounts and, then into the overall project estimate. May 03, 20 analogous, parametric, bottomup, and threepoint estimating the reason why i am creating this post is because the pmbok guide definitions of analogous and parametric estimating both use the words parameters and i thought, well, theres a potential source of confusion right there. Bottomup estimating estimates the cost of individual activities or work packages with the greatest level of specified detail.
Study 70 terms pmbok 6th edition tools and techniques. The project management body of knowledge pmbok and cost estimating body of knowledge cebok each give guidance on effective cost estimating for successful project execution. Because the wbs is a breakdown of all required project work, each decomposed project task is smaller, more manageable, and can be used to easily estimate the costs and duration of work. Summarizes by rolling up the individual estimates to get a project detail. This type of estimate is generally more accurate than other methods since it is looking at costs from a more granular perspective. Before you begin a project large or small it is crucial to have an accurate estimate of its cost and duration. Stephen has worked as a project manager and is pmp certified, as well as certified by the scrum alliance. In this video, dick billows, pmp, discusses how to make accurate estimates for small to medium size projects. Threepoint estimates use of three estimates to determine a range for an activitys cost. May 02, 20 but, its also most timeconsuming method for project estimating. Cost estimating techniques none one expert opinion ways of structuring estimates not discussed see sn topdown, bottom up role of work breakdown structure wbs is a necessary foundation for estimating costs but the estimate is conducted at the activity level below the lowest level in the wbs primary estimating structure.
Parametric estimating is easy if you have a simple model, such as cost per square foot. Bottomup estimating is one way to estimate time and cost from detail level starting and then aggregated to most upper level to obtain a larger estimate for the entire task as a whole. Bottom up estimating technique bottom up estimating is an extremely helpful technique in project management as it allows for the ability to get a more. Apr 09, 2018 it is important to differentiate between task level estimating and project level budgeting top down or bottom up estimating. The content pertains to the estimate costs process of the project cost management knowledge area. In bottom up estimating, you must be careful not to force an estimate on the project team members. Oct 04, 2019 while accurate estimates are the basis of sound project planning, there are many techniques used as project management best practices in estimation as analogous estimation, parametric estimation, delphi method, 3 point estimate, expert judgment, published data estimates, vendor bid analysis, reserve analysis, bottom up analysis, and simulation. Bottomup estimating technique project management knowledge. This is a top down estimating technique used when there is little detailed information available. The basis for bottomup estimating is the allimportant work breakdown structure. You can apply pmp project management professional estimating techniques to resources, effort, duration, and costs. Bottom up estimating is a way to approximate an overall value by approximating values for smaller components and using the sum total of these values as the overall value. Cost estimating cebok pmbok 081215 washington iceaa.
Oct 01, 2018 there are essentially two ways to create a work breakdown structure the topdown or the bottomup approach. Jul 31, 2018 bottom up estimating is the project management technique of estimating individual tasks and then combining them into an overall project estimate often the individual project team members who will be performing the task provide the estimates, because they are in a better position to estimate a task that they will be working on. Once the work package is complete and the team member is comfortable with it, you can go on to develop the cost and duration estimates. Bottomup estimating is the most accurate approach to estimating the cost and duration of project tasks. Analogous estimating technique project management knowledge. The basis of estimate is a separate estimating function that addresses management philosophy. Estimating is a vital part of project planning, especially. Bottom up estimating involves estimating the cost and duration of the smallest activities and then adding them up to create the estimate for the whole of the project. The basis of estimate is created via the use of stochastic variables and advanced mathematical models, which will point to the most effective of the three major estimating tools for your project. Bottomup estimating estimating all individual work packagesactivities with the greatest level of detail, summarizing higherlevel estimates with the combination of the individual estimates. Pmp certification study notes 9 project resource management. Analogous estimating analyzes a similar project completed in the past and makes a rough estimation for the current project by the use of this past projects data. Analogous estimating vs parametric estimating pmp exam concepts.
Often the individual project team members who will be performing the task provide the estimates, because they are in a better position to estimate a task that they will be working on. Threepoint estimates are example of bottomup estimates, which are obtained from. In bottom up estimating, each task is broken down into smaller components. The bottomup cost estimation template is to estimate the cost of any portfolio, program or project by using the bottomup cost estimation technique. Estimate costs is the first process in the project cost management knowledge area. Go to the page 61 of the pmbok guide fifth edition. Bottomup estimating is an extremely helpful technique in project management as it allows for. The analogous estimating technique uses information from similar projects to.
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