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Analogous Estimating vs. Bottom-Up Estimating



Estimating in Project Management
Estimating Techniques

Analogous estimating and bottom-up estimating are two different techniques used in project management for estimating project costs and durations. Each method has its own advantages and disadvantages, and they are often used in different situations based on the available information and project requirements. Let's explore each of these estimating techniques:

  1. Analogous Estimating:

  • Definition: Analogous estimating, also known as top-down estimating, is a technique where the current project's estimates are based on historical information from similar projects.

  • Process: The estimator looks at the characteristics of past projects that are similar in scope, size, and complexity to the current project. The cost or duration of the current project is then estimated by adjusting the historical data based on known differences.

  • Advantages:

  • Quick and relatively simple.

  • Requires less detailed information.

  • Can provide a rough estimate early in the project life cycle.

  • Disadvantages:

  • Relies heavily on the accuracy and relevance of historical data.

  • May not be accurate if there are significant differences between the current and past projects.

  • Limited precision, as adjustments are often subjective.

  1. Bottom-Up Estimating:

  • Definition: Bottom-up estimating, also known as detailed estimating, involves breaking down the project into smaller, more manageable parts and estimating the time and cost for each individual component.

  • Process: Estimators create detailed estimates for the smallest work packages or activities, and then roll up these estimates to calculate the total project cost or duration. This approach involves a more granular analysis of the project components.

  • Advantages:

  • Provides a detailed and accurate estimate.

  • Allows for a more precise budget and schedule.

  • Facilitates better control and tracking of individual project components.

  • Disadvantages:

  • Can be time-consuming and resource-intensive.

  • Requires a high level of detail and information about the project components.

  • May not be suitable for early stages of the project when detailed information is lacking.

Choosing Between Analogous and Bottom-Up Estimating:

  • Project Phase: Analogous estimating is often used in the early stages of a project when detailed information is limited, while bottom-up estimating is typically employed when more detailed information is available later in the project life cycle.

  • Project Complexity: For simple projects with well-defined similarities to past projects, analogous estimating may be sufficient. For complex projects with diverse components, bottom-up estimating is often more accurate.

  • Accuracy Requirements: If a high level of accuracy is required, especially for critical components of a project, bottom-up estimating is preferred.

In practice, a combination of both techniques may be used at different stages of a project to capitalize on their respective strengths.


 


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