Project Planning and Budgeting

Question: What challenges do project managers face when estimating project costs? Answer: Introduction The cost management is one of the most difficult aspect in the project management. The project managers need to be sure the cost off the project in order to estimate more accurately the cost at the beginning (Kerzner, 2013). Various challenges faces the project managers when estimating on the project cost these are as follows: one of the challenge is as a result of intricacies, uncertainties, contradictory interests and priorities of the task underway (Akhilesh, 2014). The project manager are unable to expect to plan for the venture as well as develop a precise estimation of the cost as a result of the numerous parameters , that happen to be associated with the projects .Other challenges the project manager not being able to effectively incorporating the diverse distributed project configurations as well as the characteristics (Kerzner, 2013). Additionally they require a comprehensive data, which they are not fully available for the starting projects and these projects usually requir e domain experience of which these managers may not have in order to derive accurately the estimates. Tools and Techniques can Project managers use to Ensure that their Estimates are Accurate. Tools and techniques which could be used are expert judgement where they could use the knowledge which they have gained from the past management experience. Another way could be through the analogous estimating. This is through the metrics from the preceding, equivalent project to function as the basis of the existing projects (Akintoye, 2000). This approach takes the actual cost of the earlier to be the baseline of the current project and then adjustment are known for the differences. A tool to use for the estimation of the cost is bottom up estimating. This entails the estimation of all the personal work activities with great level of details, then summarizing on the high level of estimates with the combination of personal estimates. Moreover, other tools such as vendor bid analysis could be used (Akintoye, 2000). This method entails the determination of what the project should be based on the review of the proposal of the vendor bids (Kerzner, 2013). Some managers have also used t he three point estimates, reserve analysis or even project management estimating software for the estimation of the costs. References Akhilesh, K. B. (2014). Project Planning and Budgeting. In RD Management (pp. 49-60). Springer India. Akintoye, A. (2000). Analysis of factors influencing project cost estimating practice.Construction Management Economics, 18(1), 77-89. Kerzner, H. (2013). Project management: a systems approach to planning, scheduling, and controlling. John Wiley Sons.