Analogous estimating

Definition

Analogous estimating is a technique used in project management to estimate the cost or duration of a project based on historical data from similar projects. This method relies on expert judgment and past experience to provide quick estimates, making it especially useful in the early phases of project planning. It allows teams to assess potential costs and timeframes by drawing parallels with previous projects that had similar scopes and complexities.

5 Must Know Facts For Your Next Test

1. Analogous estimating is particularly effective for early project phases when detailed information is not yet available.
2. This method can be less accurate than other estimating techniques, as it relies heavily on the accuracy of past project data.
3. Experts often adjust the estimates based on differences in scope, scale, and complexity between the current and historical projects.
4. Analogous estimating can help identify potential budget constraints and time limitations before the detailed planning stage.
5. It is commonly used in construction and engineering fields where similar projects can provide a reliable reference point.

Review Questions

• How does analogous estimating compare to other estimation techniques in terms of accuracy and application?
  • Analogous estimating is generally less accurate than techniques like bottom-up estimating because it relies on historical data from similar projects rather than detailed analysis. While it provides quick estimates suitable for early planning, other methods may offer greater precision by breaking down tasks and analyzing them individually. This technique is best applied when time is limited or when similar project references are readily available, making it valuable for initial budget discussions.
• Discuss the potential limitations of using analogous estimating in project management.
  • The main limitations of analogous estimating include its reliance on past project data, which may not always reflect current conditions or changes in technology, regulations, or market trends. Additionally, if the historical projects chosen for comparison differ significantly from the current project, this can lead to inaccurate estimates. Furthermore, without a comprehensive understanding of all influencing factors, teams may overlook critical aspects that could impact costs or timelines.
• Evaluate how using analogous estimating can influence decision-making processes during the early stages of a project.
  • Using analogous estimating during early project stages can significantly influence decision-making by providing stakeholders with preliminary cost and duration projections. This information allows teams to evaluate feasibility and prioritize resources effectively. However, if the estimates are overly optimistic or pessimistic due to reliance on historical data, it can lead to poor planning choices. Therefore, while this method aids in initial discussions, it should be complemented with more precise approaches as the project develops to ensure informed decision-making.

Related terms

parametric estimating: A technique that uses statistical relationships between historical data and other variables to calculate estimates.

bottom-up estimating: A more detailed approach where estimates are made at the granular level and then aggregated to form a total project estimate.

contingency reserve: An amount added to a cost estimate to cover unforeseen expenses or risks that may arise during the project.