The accuracy of an estimate is a measure of how close the estimate is to the actual value. The accuracy of an estimate can be affected by several factors, including the amount of information available, the level of detail in the estimate, and the method used to create the estimate.
- A Rough Order of Magnitude (ROM) estimation is a quick, high-level estimate of the cost or time needed for a project. It is usually done early in the project planning process and has a high degree of uncertainty.
- A preliminary Estimation is a more detailed estimate that is made after more information about the project has been gathered. It is less uncertain than a ROM estimate but still has a significant degree of uncertainty.
- Budget Estimation is an estimate of the cost of a project that is used to create a budget. It is typically more accurate than a ROM or preliminary estimate and is used to allocate funds for the project.
- Definitive Estimation is the most accurate estimate of the cost or time needed for a project. It is made after detailed design and planning have been completed and the project is ready to be executed. It is the final estimate before the project is executed.
The Usage of different estimates based on the Accuracy
Rough Order of Magnitude (ROM) estimates
are typically used early in the project planning process, when there is very little information available about the project. They are used to quickly get a general idea of the size and scope of the project and to help determine if the project is feasible.
are used after more information about the project has been gathered, but before detailed design and planning have been completed. They are used to refine the project scope and to help establish a more detailed project plan.
are used to create a budget for the project. They are used to allocate funds for the project and to ensure that the project stays within its budget constraints.
are used when the project is ready to be executed. They are the most accurate estimates of the cost or time needed for the project and are used to ensure that the project is completed on time and within budget.
All of these estimates are important for project management, as they provide a basis for planning, budgeting, and controlling the project. They help project managers to make informed decisions about the project and to anticipate and mitigate risks.