A specialist task

When estimating costs the person or team doing the estimating must understand all the details, because one of the most common sources of cost estimation errors is a failure to grasp the details adequately. The WBS dictionary, for example, is something that is omitted in many real-life projects, and yet in real-life cost overruns it is often the case that a cause of the problem is that different members of the project were using key terms to mean different things; it is precisely to avoid that kind of problem that there should be a WBS dictionary. And yet, under real-life time and political pressures, the WBS dictionary is often jettisoned as unnecessary bureaucracy. So, the project manager or whoever is doing cost estimation needs to understand three things: (1) what can be done, in the absence of any constraints on time and resources; (2) what the constraints are in this particular project, especially expectations and political factors; and (3) what the risks of accepting those constraints are in terms of probable sources of error. They must then communicate those risks back to the sponsor and stakeholders, for them to either accept or modify. And of course they would be well advised to document the outcome of such feedback.

Cost estimating is a specialist task, and the reading list at the end of the chapter gives a flavour of what kind and depth of skills are necessary to acquire such specialization.

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