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Using Top-Down Estimating

Using Top-Down Estimating

A top-down estimate allows a project manager to take a very similar project’s budget, work some financial math magic, and arrive at a reasonable budget for the current project. Top-down budgets are often used by organizations that complete IT projects for other companies. Consider IT integrators who install servers, network cable, and network equipment. They’ll have similar projects they can refer to when predicting the cost of current projects.

Within an organization, IT project managers also have projects that are similar to other projects they’ve completed in the past. Consider a project to roll out a new operating system using a disk-imaging server. If the project manager has rolled out other operating systems in the past using the disk-imaging server, he’ll have a pretty good idea of how the current project will go. This historical information on proven, completed applications allows the project manager to save the time of doing a bottom-up estimate; he can work from prior successful projects

The problem with top-down estimates in the IT world, however, is that most IT projects have never been done before. Specifically, because IT changes so quickly and each environment is generally customized, top-down estimates are not as reliable or useable as bottom-up estimates.

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  • There are possibilities of quantifying the top-down approach to the problems of project estimation. This method is based on the balancing equation for an arbitrary project. According to this equation Project Duration X Project Staffing X Team Productivity = Project Size X Project Difficulty. Combining this equation with Goals and Objectives of projects it is possible to derive functional relationships between project parameters. Details of this approach you can find here: 1. 2.
(Posted on June 11, 2011, 8:06 PM Pavel Barseghyan)