Cost Estimate Accuracy
By: Ray Myers, Jr., PMP
The accuracy of project cost estimates varies depending on position in the project life cycle.
Rough Order of Magnitude (ROM)
- Very early in the project
- ROM estimates are used for selection decisions
- Accuracy is usually plus/minus 50%, but could range from -25% to +75%
Budgetary
- Early in the project
- Budgetary estimates are used for initial budget planning
- Accuracy is typically -10% to +25%
Definitive
- Near start of the project
- This is a refined estimate with sufficient detailed for purchases and project control
- Accuracy is usually-5% to +10%
About the Author: Ray Myers, Jr. is a PMP certified project manager with over 2o years experience planning and managing technology projects. Contact Ray at wwwpmservicesnw.com
Article source: www.pmservicesnw.com
