by Melissa Winter
| September 25, 2014
Original Post Date: Wednesday, September 25, 2013
Every day we use tools like TruePlanning to build up detailed parametric cost estimates. We could spend weeks collecting data and design information, and weeks honing details on risks and uncertainties. When we finally get to reasonable point estimate, or even a distribution of probable estimates, there are always more questions. Of course the range of queries depends on the purpose of the estimate, and who your consumer is.
If you are preparing an estimate for a competitive proposal, a company executive may be your consumer. They may want to know, “What is the risk of bidding at this amount to win?” or “What is the probability we would overrun at this amount?”. Or from a government prospective, “what is the likelihood this amount is adequate for the project?” After all, no one wants a program overrun.
If working in an internal estimate or a parametric estimate in conjunction with a grass-roots estimate, your organization may want to understand the estimate at a much more detailed level. “Well can you tell me the labor requirements by department? How much is the Systems Engineering effort ?” You may be required to compare the model to a bottoms-up estimate to challenge bids put forth by individual functional areas, and you have to verify that each team will have the time they need to complete their tasks successfully.
And the more questions you answer, the more questions will be asked…”can you show me the costs by resource and fiscal year for each cost object, and split those by development and production. “ Every organization can have specific needs based on their business or culture, and we use various tools to respond to every request. We might not be able to tell the future, but we can always come up with an estimate. How do you go about responding to this multitude of questions? What tools to do you use to accommodate the needs of your consumer?