Top-down Vs bottom-up estimates

Top-Down vs Bottom-Up Estimates

Project estimates play a vital role in knowing whether a project would be completed in time considering the available time and resources or there would be some hurdles in timely completion of the project.

Now, there are two main approaches that project managers use for accurate project estimation, which are top-down and bottom-up project estimate approaches. Let us compare the two approaches in some detail.

In bottom-up estimating, detailed estimates of all tasks included in a project is done, whereas in case of top-down estimates, the duration of major project deliverables is calculated. Bottom-up approach is considered more accurate than the top-down approach. However, project managers need to define all project deliverables first in order for accurate estimation of the deliverables (Six, 2015). Top-down estimates require some overall results or those from some prior similar project to fill in the required fields for the current project.

On the other hand, bottom-up approach needs the project’s individual costs to calculate the total cost estimate of the project. Bottom-up approach is based on real numbers and statistics because of which its level of accuracy is considered more as compared to the top-down approach. However, when reconfiguration of records or some rework is needed to be done, bottom-up approach can incur some accurate estimate problem (Mott, 2017).

For the point of how project costs are influenced by quality and accuracy of estimates, I would say that proper and accurate estimation is the key towards minimization of a project’s costs because when there would be some ambiguity or miscalculation in estimate of some project task, the working for that task would be affected, which would need additional time, efforts, and resources of which add to the total project costs in some way or other.
 
References
Mott, E. (2017). What Are the Differences Between Bottom-Up & Top-Down Estimating Approaches?. Bizfluent.com. Retrieved from https://bizfluent.com/info-8784461-differences-bottomup-topdown-estimating-approaches.html
Six, T. (2015). Comparison of Top-Down and Bottom-Up Estimates in Microsoft Project. Tensix.com. Retrieved from https://tensix.com/2015/08/comparison-of-top-down-and-bottom-up-estimates-in-microsoft-project/



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