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Project Management Estimation Methods – Top Down Estimation

Posted by mgocean on May 28, 2009 in Estimation, Project Management |

The Top-Down Method is useful for quickly estimating the total resources required for a project, and allocating this total to lower-level project activities. This gives initial estimates for each of the various activities or subsystems. These estimates may be sufficient for early planning. Top-Down Method may be used to estimate effort, cost, and schedule (or duration) for project tasks. It also may be used to estimate the project’s average staffing level and staffing profile (staffing as a function of time). The Top-Down Method estimates the total project effort by dividing the total estimated size by the productivity.

 

The Top-Down Method is a subsidiary technique. Once you have established a good overall estimate for the project, you sub-divide it down through the layers of the work breakdown structure, for example, development will be 50% of the total, testing will be 25% etc; then sub-divide development and testing into their components. Top-down budgets are often used by organizations that complete IT projects for other companies.

 

The problem with top-down estimates in the IT world, however, is that most IT projects have never been done before. Specifically, because IT changes so quickly and each environment is generally customized, top-down estimates are not as reliable or useable as bottom-up estimates.

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