Discussion 3
Benjamin Kim
Liberty University
BUSI 680 – Advanced Project Management I
1. At this point, what would you do if you were the project manager?
At this point, regardless of how underestimated the top down estimate from the top
management was, I would go and discuss the large discrepancy that exists. It is important to
discuss with top management the reality of the situation and discuss several important decisions.
The first of which is whether the newly revised, and more accurate, bottom-up estimate that was
created will be acceptable to move the project forward. While the project might have been
excitedly moved forward after the top-down estimate given the inaccurate numbers, it doesn’t
mean that the newly revised, much higher estimates signal an end to the project. The potential
return on investment is going to be very important to look at to determine if the new estimate is
still acceptable, albeit not as desirable as the original estimate. The next question to be addressed,
if the newly revised budget is not acceptable, is whether there are certain aspects whether in
design or function that can be altered or given up altogether in order to bring the final budget into
an acceptable range. After these two questions are addressed, then a decision can be made,
whether the project is modified and continued or whether we will be cancelling the project
altogether. Without the discussion of what upper management’s wants versus needs from this
project are, the most optimal decision cannot be made. This is not a decision for one person to
make with their own individual thoughts, as it says in Proverbs 15:22 (ESV) “without counsel
plans fail, but with many advisers they succeed”.
2. Was top management acting correctly in developing an estimate?
Yes, according to the textbook, top down estimates are used when many details are not
yet known to be able to derive an accurate cost and time estimate. In this case, the proposal was
still in the very early phases with not so much as a prototype or design in mind. In this situation,
in order to be able to assess and evaluate the possibility of moving forward with the project, a
top-down estimate is likely one of only few techniques to be applied here. The only possible
mistake made was the exact method of top-down estimating that the upper management used. It’s
not made clear in the prompt what method was used. For example, maybe the consensus method
was used, simply relying on their best guesses or most relatable experiences, whereas potentially
something a little more detailed and broken down like a ratio method might have been the better
alternative.
3. What estimating techniques should be used for a mission-critical project such as this?
Both top-down and bottom-up should be used for this project. While many estimating
techniques exist, the most appropriate one for each individual project will depend on “the
purpose it is used for, the amount of information available at the time of estimation, and the party
using it”. (Bayram & Al-Jibouri, 2016, p.1). For a project as critical as this $200 printer for
small business and retail customers, the more estimates available from a very broad estimate to a
more detailed estimate, the better and more accurately the project can be judged and evaluated.
So the initial top-down estimate made by upper management was a good place to start because
they knew the major deliverables and had the goal project launch date in mind. However, the
next step from that would be for Lauren, with her 15 years of expertise in printer design and
manufacturing, is the right person to spearhead the bottom-up estimate and be take over as the
project manager. With the information provided that the bottom-up estimates on this project yield
a nearly 20% overrun as well as a timeline four months longer than estimated, using range-
estimating is likely the best option. This will allow Lauren to present a range for costs as well as
timeline to complete that allows all possibilities to be accounted for in the scope of the project.
This will make it so that surprises can be minimized during the progression of the project
(Larson & Gray, 2021). While being more complex and difficult, to enhance further the quality
and efficacy of the project’s estimates, being able to identify and consider any threats that may
pose a risk to the originally estimated costs and timeframe will only help to further provide the
best range of estimates that would mitigate possible surprises that may appear during the
project’s course (Asadabadi & Zwikael, 2021). The estimation process for such a critical project
needs to be done thoroughly and carefully as it says in Proverbs 21:5 (ESV), “the plans of the
diligent lead surely to abundance, but everyone who is hasty comes only to poverty” in order not
to run into problems along the course of the project.
References
Asadabadi, M.R., & Zwikael, O. (2021) Integrating risk into estimations of project activities’
time and cost: A stratified approach. European Journal of Operational Research, 291(2).
482-490. https://doi-org.ezproxy.liberty.edu/10.1016/j.ejor.2019.11.018
Bayram, S., & Al-Jibouri, S. (2016) Efficacy of estimation methods in forecasting building
projects’ costs. Journal of Construction Engineering and Management, 142(11). 1-9.
https://doi-org.ezproxy.liberty.edu/10.1061/(ASCE)CO.1943-7862.0001183
English Standard Version Bible. (2001). https://esv.literalword.com/
Larson, E. W., & Gray, C. F. (2021). Project management: The managerial process (8th ed.).
New York, NY: McGraw-Hill
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