As a PMP(r), you must manage multiple projects and ensure that they are delivered within the budget. It is much easier to have a comparison of your project so you can avoid potential risks.
Analogous Estimating, as the name implies, compares your project’s status to similar projects. It is a common tool for estimating the cost and duration of a project. You can also use the data to make any necessary adjustments.
This article will help you, regardless of whether you are a project manager. Continue reading to learn more about Analogous Estimating, and how it is used.
What is analogous estimation?
Analogous Estimating allows you to estimate the project parameters and measures using data from past projects. This tool uses data from past projects to compare it to your current project status and estimate the cost, duration, and resources.
You will notice that a project’s planning changes frequently as it goes along. These changes can be caused by both internal and external factors.
To understand the status quo of a project, it must be repeatedly estimated. It is a top-down method of estimating that doesn’t require statistical adjustments.
This tool estimates based on comparable data. The accuracy of the estimation process greatly depends on the availability of data. Analogous estimation is much easier than other methods of estimation. It works best when there is less comparable information. It is therefore a common tool for project managers.
Types of analogous estimation
Project EStimation refers to the process of estimating the project cost, duration, as well as the resources. Analogous estimation is a process of estimating the gross value of a project. It can be divided into four categories.
Absolute-Value or One-Point Estimate
The term Absolute value, or One point estimate, denotes that the estimation value is a single absolute value.
This means that if you have a similar past project and it has a budget of one value, you can apply that budget for your current project.
For example, if a historic project had a budget of $400,000, then the amount allocated for the project would be $400,000 as well.
Ratio Estimate
A ratio estimate is the relative usage of comparable historical data, which assumes a linear relationship among project attributes. Although the ratio estimate is similar in process to parametric estimates, it relies more on expert judgement than statistical evidence.
This estimation process can be applied in two ways. The first is to use historical data. The second is to break down the project to estimate current value.
For example, project managers might conclude that the current project’s budget is 50% of the total budget for the previous project when they are doing estimations.
Another example is when the total cost is broken down into smaller pieces. The estimation might conclude that the current budget equals 90% of the total cost for a similar managerial project.
Range Estimate
Range estimates are not based on an absolute value or a single point estimate. Instead, they depend on a variety estimated values. This estimating technique allows for a variety in valuations when evaluating the project’s cost and duration.
It is accompanied by a most probable estimate, which shows the likely values. The project managers will execute the value that depicts the most likely attributes.
This estimating technique can show more than one value and is often compared to the three-point process.
Three-point Estimate
A three-point estimating process is often portrayed as a