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Five 5 Factors Affecting the Accuracy of Project Cost Estimating

This article will discuss five 5 factors affecting the accuracy of your project cost estimation. In addition to the above factors, your estimate will also be affected by the market conditions and priorities of the client. For example, in this market, your estimates will be influenced by the time it takes to complete the project, the procurement methods used, and the performance of your competitors. It’s vital to keep these factors in mind when estimating the cost of a project.

If you’ve done a project in the past, you may have used an analogous cost estimate method. This method makes use of past performance records and historical costs to adjust new estimates. However, you need to be careful, because historical data may not be relevant to the current business situation. You may want to review your estimates and use environmental analysis to ensure they’re accurate. Otherwise, you may end up over-estimating the project cost.

Another factor that affects the accuracy of your estimates is the culture of your organization. Some organizations tolerate padding estimates, while others place great importance on accuracy and discourage estimating gamesmanship. The amount of importance you attach to estimating will depend on the culture of your organization. Some think that detailed estimating is time-consuming and difficult to predict, while others feel that it is the bedrock of good project management.

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