response project management
(Marshall)There can be many pitfalls in cost estimation depending on the project that is being proposed. One challenge to cost estimation is poorly derived project requirements. These requirements includes functional, business, end-user usability and other requirements. Not having trustworthy estimates can cause the project to drift further and further from the baseline estimates which is similar to scope creep. Another challenge is consistency and comparability of data from multiple sources and many periods of time. The issue with this is that the organizations are different and processes, procedures, and structures change over time. The next challenge is the large number of organizations involved, which ties in to the previous challenge. This is where the data that is collected from different sources must be accessible and useful and may need to obtain the proper non-disclosure agreements. The next challenge is being too optimistic. Most of the time in the early stages we tend to think that everything will go well executing the project when everyone from the team members to the end-users are on their best behavior. The only type of cost estimation that I have been involved in was during my Planning and Estimation course in Building Construction Technology. We were giving a set of plans and had to estimate the cost of the project from the material down to the number of employees and their pay. We had to present the project to the class with our numbers to determine who was the closest to the actual estimate. I was off by thousands of dollars, which was not bad considering the size of the project. What I ran into mostly was the lack of information that was presented. I had to research most of the processes to know how to implement it into the project. I was new to that type of estimating and it was challenging but it help me understand the processes of cost estimation.
REFERENCES:
https://www.technomics.net/blog/top-5-challenges-to-cost-estimating