Projects play a large role in businesses today. Projects are becoming the primary instrument for executing and achieving the strategic goals of a company. With global competition increasing, many companies have restructured their business model around modernization, revitalization, and organizational education to compete. This strategy infers that an organization is adaptable and has a mission-driven focus. Now that businesses are so heavily focused on projects, project management has advanced to where it is now a specialized skill set sought after by companies looking to hire. In today’s times, it is virtually unimaginable for someone at any level in the company who would not gain from being proficient in the study of project management.…show more content… For this reason, it is crucial to get the team to buy into time and cost estimates.
Using top-down estimates is suitable for initial and strategic decision-making or in situations where the costs associated with developing better estimates have little benefit. However, in most cases the bottom-up approach to estimating is preferred and more reliable because it assesses each work package, rather than the whole project, section, or deliverable of a project. Estimating time and costs for each work package facilitate development of the project schedule and a time-phased budget, which are needed to control the project as it is implemented. Using the estimating guidelines will help eliminate many common mistakes made by those unacquainted with estimating times and costs for project control. Establishing a time and cost estimating database fits well with the learning organization philosophy.
The level of time and cost detail should follow the old saying of “no more than is necessary and sufficient.” Managers must remember to differentiate between committed outlays, actual costs, and scheduled costs. It is well known that upfront efforts in clearly defining project objectives, scope, and specifications vastly improve time and cost estimate accuracy.
Finally, how estimates are gathered and how they are used can affect their usefulness for planning and control. The team climate, organization culture, and