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What Is the Biggest Problem in Developing Accurate Cost Estimates? Why?

In: Business and Management

Submitted By guti1441
Words 822
Pages 4
Project cost estimation helps management to determine the feasibility of project before undergoing the actual investment. If the cost estimation turned to be incorrect, the management's decision could go in favor the wrong project proposal, and the whole investment may be in stake. Estimating project cost is the responsibility of the project manager. It is one of the difficult tasks in project management. There are many reasons that makes project cost estimations so difficult. The following are descriptions for some of those reasons.

Project managers derive the total cost after identifying all tasks needed for the project. These tasks are based on project mangers' complete collection and interpretation of user's requirements. It is obvious that if the requirements were vague or incomplete, some tasks will not be included in the project. Both project duration and cost will suffer in this case. The project managers must ensure to collect all requirements as many and as detailed as possible. Else, project time and cost estimates will not be accurate.

Project execution phase, specifically the coding and testing processes, poses the most chances for changing the project cost. It is rarely that existing tasks get eliminated. Contrary, it is expected that users will contributing in adding new development tasks after user initial testing. During testing, users will form closer expectations to future working environment the project intends to build. Here, users may discover forgotten functions or system components. These could have been missed either from the start when collecting the requirements, or during the software developments. In any case, new task that has not been accounted for from the start, are required now. Inserting new tasks at this stage of the project implementation will definitely be reflected in total project cost.

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