The Problem:
Everything Changes
An estimate is just that—an estimate, not a certainty
set in stone. The problem isn’t that the estimate will
change, however; the problem is assuming it won’t.
“It’s so easy to make a mistake on cost, at least in
the very initial phase when you’re doing a charter,”
Ms. Parker says. “If you’re held to a cost from that
initial phase, everyone is going to lose.”
The Solutions:
Project managers should treat the estimate from
the start as a changing document—and so should
executives and other stakeholders. Change isn’t
It’s so easy
to make
a mistake
on cost. If you’re
held to a cost from
the initial phase,
everyone is going
to lose.”
—Tracy Parker, PMP
a bad thing: It means the estimate can become
more precise.
“You should initially estimate the project in
orders of magnitude, plus or minus 50 percent, and
home in as you go. When you get a more definitive
estimate, it should be plus or minus, say, 10 percent,” Ms. Parker says. “Or you can say, ‘I think this
is going to cost US$100,000, but I only have 50 percent confidence in that number.’” Closer to project
execution, that percentage may increase.
Also, document not just the estimate, but how
it changed and became qualified over time. “That
way, if you have to ask for more money later and
the sponsor says, ‘But you said it was only going to
cost US$100,000,’ you have the documentation to
back you up.”
