3 Ways to Improve Cost Estimates with Your Teams

    2=Planning

  •  Minute Read

Do you ever feel like the Lone Ranger when working on cost estimates? Actually, you're not alone; you have a team. Let's explore how to engage your team members and subject matter experts to improve your cost estimates.

So, let's look at three techniques to use with your teams:

  1. Brainstorming
  2.  Delphi Technique
  3.  Nominal Group Technique

3 Team Techniques to Improve Cost Estimates

1. Brainstorming

A senior leader asked Jane to manage a project to implement a new insurance policy administration system. She facilitated an estimating workshop. Jane asked the five participants to come prepared to brainstorm the project expenses. The group identified several items that Jane had not thought of including facilities, the cost to interface the policy admin system to a third party, contingency reserves, and financing cost.

2. Delphi Technique

Bob decided to use the Delphi Technique to identify cost items for his project.

Bob emailed the stakeholders a survey link asking, "What items should be included in the project budget?" He compiled and sent the results to the stakeholders asking them, "Do you agree with these budget items? If not, where do you disagree and why?" Finally, Bob compiled and shared the final results.

3. Nominal Group Technique (NGT)

Betty decided to use the Nominal Group Technique with her stakeholders. She had identified expense categories such as software, hardware, vendor, configuration, and testing before her estimating workshop.

During the workshop, Betty started with the software expenses and asked the participants to write down software expenses. Then she asked each participant for one response. Betty captured each item on a white marker board. She continued the second and subsequent rounds until all of the ideas had been captured. 

Next, Betty instructed the participants, "Look at all of the expenses and write down the top three expenses." She facilitated the round robin exercise asking each participant for their top three.

Afterward, she asked, "Where do we see agreement and disagreement? Why do the disagreements exist?" Furthermore, participants shared details behind the estimates allowing others to understand the costs better.

Documenting Your Basis of Estimates

Have you ever been asked how you arrived at your estimates, but you could not remember? I know I have.

That's why it's important to document:

  • How the estimates were developed
  • Assumptions
  • Constraints
  • Range of estimates (e.g., +-20%)
  • Confidence level of the estimates

Sign up for the Project Risk Coach Tips

Sign up for project risk management tips and receive the Project Management Plan Checklist. Make sure that you are including the right project baselines, subsidiary plans, and ancillary plans in your project management plans.

"Intelligent leadership, creative communication and depth of technical skill all describe Harry Hall." –John Bartuska, Director of HR–ONUG Communications

Powered by ConvertKit

You may also like

How to Actually Close a Project

6 Practical Ways to Actually Improve Your Cost Management

>