As an IT project manager, you understand the value of accurate cost estimates. Not only do they ensure you have the funds necessary to complete the work, they also serve as a strong framework regarding what is required along the way. So, what can an IT project manager do to improve their cost estimates? Here are a few tips to get you started.
Get a Grip on Risk
Risk assessments are a big part of project management; they let you identify and address potential problems in advance, helping to keep everything on target. Failing to manage the risks properly means you’re more likely to be faced with a challenge that could turn into a budget buster, rendering your initial estimate useless. However, by taking the time to assess these points in advance, you can adjust your estimate accordingly and plan to mitigate any unexpected costs.
We all want to do more with less, but overestimating the team’s capabilities and underestimating the costs based on the more optimistic scenario can come back to bite you. While you should work to identify potential cost savings for the project, make sure you are realistic about the expenses involved.
Create a Thorough Plan
Your estimate will only be accurate if you track all of the required tasks and materials needed to see the project through to completion. Failing to get a firm plan in place means certain details may be missed, rendering your initial estimate inaccurate.
You also need to identify any variables that may affect the associated expenses as the project moves along. This will ensure you adjust your estimate to reflect different scenarios based on how things play out.
Think in Multiples
One way to increase the accuracy of your estimates is to produce more than one. Multiple estimates can help you look at the situation from multiple perspectives, spotting potential risks associated with individual variables or unexpected events.
Once you have a few created, find commonalities that likely represent a suitable estimate. Then, examine the differences and identify the most probable scenarios before including a variant on your formal estimate.
Have a Plan B
If you’ve spotted potential trouble spots in the project, make sure you create a contingency plan to address these issues and keep everything on track. Then, create supplementary estimates based on these scenarios to ensure you can provide all stakeholders an accurate picture of how things will work if things don’t go exactly according to plan A.
By completing the steps above, you have the ability to improve the quality of your cost estimates, making it easier to stay on target and keep everyone involved happy. If you are looking for an IT project management position, the team at The Armada Group can connect you with leading employers in the area. Contact us today and see which open positions may be right for you.