Imagine you want to develop a new business solution or have a great project idea that you want to turn into reality. In practice, there’s only one hurdle that you can face: how much will it cost? There are two common scenarios that you may choose from to determine the project cost and duration. You may either use your own resources to create project specification, calculate costs, and evaluate all risks. Or you may use project cost estimation calculators that were designed to simplify these processes.
In case you don’t want to spend too much time deciding whether your idea matches the project budget, you may use one of the project estimation calculators available on the market. Such a tool will enable you to quickly estimate the initial costs, evaluate the project timeline, and anticipate possible risks.
Scenario 2
You can create a project estimate by yourself in case you clearly understand the team’s expertise, tasks, processes, and deliverables. This approach suits well the businesses that want to get a detailed estimation. Yet, it’s a less suitable option in case you require a quick estimation.
Estimation Techniques
Whether you want to estimate the project by yourself or use one of the solutions offered by the third party provides, you need to decide which estimation technique suits best your business. To do that, you should answer such questions as: Do you have a clear project idea? Do you need an approximate estimation? Do you require a quick quote? We offer you to use the questions below to find the project estimation technique that suits your specific business needs.
Quick Summary
Bottom-up estimation
Works well when you have a detailed project description. Choose if you need a detailed estimate. Yet, consider using a different technique in case you require a quick estimation.
Choose when there are few project details available and you need a quick estimation to receive decision-making data about the project cost. Works well when you need to identify and estimate the major tasks. Try Alverden Estimation Tool
Ensures accuracy due to the usage of both historical and statistical data available. However, this type of estimate is considered to be more complex due to the use of algorithms, and it might require more time.
Real-Life Example
In order to help our customers make better-informed decisions, we’ve implemented a Top-Down Approach Estimation Calculator based on analogous method. This calculator enables business owners to receive information about the approximate project cost based on such parameters as Industry, Service Line, Application Platforms, Solution Type, Technologies, 3rd Party Platforms integration, and more.
Let’s see how it works in practice. Imagine there’s John who runs an event agency. John wants to improve his business efficiency and minimize administrative efforts. He decides to build a CRM system for event management. His next step will be the estimation of the approximate cost and timeline in order to determine whether the project is worth implementing. By using the project estimation calculator, John fills in all the necessary information. For example:
Industry: Hospitality and leisure;
Solution Type: CRM;
Service line: Web;
Application Platform: Windows.
The usage of the top-down estimation technique allows John to find a similar project to the one that he plans to develop. He compares his current project with the identified past project and gets the valuable information about the duration, team size, and cost of the current project. Applying analogous estimation, John may quickly decide whether or not he has enough resources to implement his project.