Costing Estimation & Analysis Solutions

Cost Estimates Can Make or Break Your Projects and Programs

One of the greatest challenges for a project leader is to successfully deliver on all aspects of a program or project on time and within the bounds of the available resources. Cost estimates help organizations increase their quality of delivery by establishing a baseline for scope, schedule and cost. Additionally, cost estimates support the evaluation of competitive proposals and provide a reference point for negotiations for large acquisitions.

Costing enables organizations to create value, drive stronger performance and make more informed financial decisions through data-driven analysis and industry best practices. Costing helps answer many critical questions such as:

• Do we have adequate resources to complete the work?
• Has the contractor proposed enough resources to perform the work for the given price or is there a risk of non-performance?
• If we need to modify our project timeline or scope, what happens to our costs?
• What are the alternatives, and are they viable given our current or future projected resources?

Cost Estimates Tie the Scope of Work to the Resources Required

Part of the cost estimating process requires defining the project or program being estimated and defining the work products. This process is generally informed by reviews of historical data from past projects, lessons learned and initial staging and sequencing of the work. This process also helps teams and organizations to:

• Manage Risks – by documenting areas of uncertainty and assumptions, you can highlight risks and their impacts early in the planning phase. Without performing this type of analysis and exercise, it’s difficult to accurately assess the cost risk inherent and make effective resource planning decisions.
• Overcome Resource Hurdles – By preparing an estimate, you can plan your resources well in advance. The estimate and corresponding documentation and serve as a detailed justification for the budget and link it to the expected outcomes.
• Serve As a Reference Point for Future Projects – Quality cost estimates serve as a reference point for future projects. By using cost estimates, you can compare the initial resource requirements to the final expenditures and to enhance your organizations planning capabilities and drive stronger performance.