Use Of Rough Order Of Magnitude (ROM)

Project sponsors need an idea as to how much time and money a project will require.

Give an example of a rough order of magnitude, budgetary, and definitive cost estimates for an IT software development project.

Give an example as to how you would use the analogous, parametric, and bottom-up cost estimates.

Sample Answer

Rough Order of Magnitude Estimate

Project scope: The project will develop a new software application that will automate the company’s customer service process.
Project duration: 6 months
Project cost: $100,000

This estimate is based on the following assumptions:

The project scope is well-defined.
The project team is experienced and has the necessary skills.
There are no major risks or challenges.

Full Answer Section

Budgetary Estimate

Project scope: The project scope is still being refined, but it is expected to be similar to the rough order of magnitude estimate.
Project duration: 6-9 months
Project cost: $150,000-$200,000

This estimate is based on the following assumptions:

The project scope is still being finalized.
The project team is still being assembled.
There may be some risks or challenges that are not yet known.

Definitive Cost Estimate

Project scope: The project scope is finalized.
Project duration: 8 months
Project cost: $175,000

This estimate is based on the following assumptions:

The project scope is finalized.
The project team is assembled and has the necessary skills.
There are no major risks or challenges.

The following table summarizes the three estimates:

Estimate Type	Project Scope	Project Duration	Project Cost
Rough Order of Magnitude	Well-defined	6 months	$100,000
Budgetary	Still being refined	6-9 months	$150,000-$200,000
Definitive	Finalized	8 months	$175,000

As you can see, the estimates become more accurate as the project scope and budget are finalized. The rough order of magnitude estimate is the least accurate, but it is still useful for getting a general idea of the project’s cost and duration. The budgetary estimate is more accurate, but it is still subject to change as the project progresses. The definitive cost estimate is the most accurate, but it is also the most time-consuming to develop.

It is important to note that these are just examples, and the actual estimates for a particular project will vary depending on the specific project scope, budget, and risks.

This question has been answered.

Get Answer

No More Worries!

Paper Formatting

No Lateness!

Our Guarantees