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%

 

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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

Tags: Cost Estimate Accuracy, project cost estimtes

This entry was posted on August 31, 2010 at 3:38 pm and is filed under Cost, Initiation, Planning. You can follow any responses to this entry through the RSS 2.0 feed.