Project management is a big responsibility that involves proper coordination among various departments involved in a project and proper planning. Estimation is the foundation of any project which is expected by planning and allocating the tasks. If your estimation is flawed, your entire project may become a huge disaster. There are many estimation software available in the market which help the project managers deal with project estimation and even better project management more efficiently. Any organisation that deals in projects have to invest in a good project management and estimation software which keeps track of the entire project so that the shortfalls are easily identified and corrected on time. Desktop, web-based, and cloud solutions are available now for project management and estimation which all types of organisations can make use of without burning a hole in their budgets. In fact, the right project management software help in cost control and better management which make the entire project more feasible and cost-efficient.
With any kind of project, estimation for the project is one of the major aspects in which the project manager spends a considerable amount of time. It forms the very basis of the project’s cost, resources and time requirements. The project manager first prepares a rough plan of the entire project and then allocates the volume of resources and time to be spent on it. This sums up the cost of the project roughly. Generally, the estimations are revised a couple of times to accommodate the customer requirements that arises after this stage. Accordingly, the plan and job allocation are also altered to accommodate the changes.
Let us consider the 5 important reasons in which estimation helps a project:
1. Estimation helps in creating a rough layout of the project.
The project manager creates a high-level project layout. This forms the basis for the cost, resource and time estimations for the successful completion of the project. This layout is refined to give to the customer to get a better understanding of how the project is being planned by the contractor or the project manager.
2. It helps to determine the maximum time that will be required to complete the project successfully.
The high-level layout gives an idea to an experienced project manager regarding how long the project will take to be completed. He uses his experience and expertise to consider the probable hurdles and risk factors associated with the project and add some buffer time for any contingencies. Sometimes, the client specifies the timeframe within which the project has to be completed in which case, the project manager adds the number of resources and cost factors to make sure the project is completed on time.
3. It helps in determining the resources required to complete the project on time.
Once the high-level layout is ready and the timeframe is also determined, the project manager now starts defining jobs and determining the type of expert resources and their numbers to ensure that the project is completed on time. If the client has a very low budget, too many experts will be avoided and instead, trainees will be included who will cost much lesser to the project. For prestigious projects, the best employees and more time will be provided to make sure it is completed flawlessly.
4. It helps in determining the overall cost of the project.
Once the layout and resources are roughly sketched, the overall cost can be determined based on the resource cost and time required. Business margin and some buffer are usually added to this cost and then given in proper format as the project estimate. The client has to approve this to kick-off the project which is done after a couple of revisions sometimes.
5. It forms the basis for preparing the project plan.
The approved estimate is then taken as the basis to prepare the project plan which is the base for task allocation. The cost and time for the project have to fall within this plan or else, the estimate will be exceeded and the project will become a disaster as far as profitability is concerned. The costing considers the current cost of materials and resources which tends to escalate over a period of time.
These are the basic advantages of having an estimate for a project. It stands true for all types of projects – whether construction, IT or power sectors. The estimation software automates many of the processes involved and also connects the processes so that the real-time data can be analysed later to ensure they conform to the plan. The deviations are easily detected and corrective actions are also promptly taken. Manual estimations are difficult to compare with the actual data and every time the estimate is changed, the comparison has to be repeated which is cumbersome as far as the project manager is concerned. With a competent project management software not only the estimation but the entire business processes involved in completing the project successfully.
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