2.10
Estimating Project Costs to
Determine
and Confirm the Workable
Approach
|
Focus
on cost to balance with grade of
material and time of
construction
|
“According
to the ancients, the truly great
in warfare are those who not
only win but win with such ease
and ingenuity that their wisdom
and courage often go
unrecognized. Such
men do their best to ensure that
the victory will be theirs
before they commence fighting,
placing themselves in an
invulnerable position and not
missing any opportunity to
defeat the enemy. The winner
does everything to ensure
success before he fights. The
loser rushes into combat without
adequate preparation.”—The
Art of War
|
“The
science of war may be summarized
under these headings:
|
1.
Measurement
of distances
2.
Estimation
of expenses
|
4.
Assessment
of possibilities
5.
Planning
for Victory”—The Art of War
|
Estimating
costs builds on the cost part of
the workable approach. 'The
approach to the job, grade of
material,
and time of construction all
affect costs. The acceptable
target costs in the workable
approach affect the
possible approaches, materials,
and time. So, the costing must
be done as part of the approach
development and confirmation
process—with back and forth,
and give and take between
approach and costs. Estimating
involves detailed counting and
arithmetic, but it is not just
bean counting. It is part of
building the
project on paper and in your
head to determine the approach.
The organization of the
information in the
estimate is the start of project
planning and is later used in
project management.
|
The
Estimate Starts with an
Organizational System—So You
See the Big Picture and Nothing
Is Missed
|
The
first step in preparing an
estimate is establishing an
information organizational
system, which contains all
work items. If all work items
are in the estimate, but not
precisely estimated correctly,
mid-project feedback and
control makes correction
possible and success still
probable. If a work item is not
in this original estimate,
additional management time and
probably cost will be incurred
later. And timely completion at the
required cost will become less
likely—full recovery is
usually not possible.
|
|
|
|
