PLANNING ESTIMATE-PROJECT MANAGEMENT HINT

Last week I got angry with one of my customers who wanted me to give him an estimate for the office building in a concept design phase. Using the skills I have developed during my project management education I did this estimate with the accuracy adequate to the information available and also give the range in which the cost could be. And surprisingly the customer was not happy to hear this statement. I needed some time to explain him some basic approaches used for making these kind of estimates.

When you want to do a quick estimate of project cost, you wan to use some type of high level, top-down approach. Depending on characteristics of the project and the type of information you have available, these approaches can actually be very accurate. Worst case, they should at least give you a decent ballpark estimate. From an expectation standpoint, this type of high level estimate should be -25% to +75% accurate. That is, if you estimate the cost of the project to be $100 000, you would expect the actual cost to be  in the range of $75 000 to $175 000. If your management or customer would like more accuracy than that, they need to give you more time to allow you to uncover more details, or lay the work out at a lower level.

What's your experience in such situations?