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Analogous Estimating vs Parametric Estimating

Analogous Estimating vs Parametric Estimating

Analogous Estimating vs Parametric Estimating is the 4th post in our PMP Concepts Learning Series.

Designed to help those that are preparing to take the PMP or CAPM Certification Exam, each post within this series presents a comparison of common concepts that appear on the PMP and CAPM exams.

Analogous Estimating vs Parametric Estimating

Two estimating techniques that may appear on the PMP, CAPM, PMI-SP, and PMI-RMP exams are analogous estimating and parametric estimating. Both estimating techniques can be used to determine both project cost and project durations.

Analogous Estimating

Analogous estimating uses a similar past project to estimate the duration or cost of your current project, thus the root of the word: analogy.

Used when there is limited information regarding your current project, an analogous estimate is considered “top-down” and is generally not as accurate as other estimating techniques.

Because the project manager’s, and possibly the team’s, experience and judgment are applied to the estimating process, it is considered a combination of historical information and expert judgment.

For example, if it cost $7,100 to develop a website a few months ago and you are responsible for developing a new similar website, you estimate it to cost $7,100.

Parametric Estimating

Parametric estimating, a more accurate technique for estimating cost and duration, uses the relationship between variables to calculate the cost or duration.

Essentially, a parametric estimate is determined by identifying the unit cost or duration and the number of units required for the project or activity.

The measurement must be scalable in order to be accurate.

For example, if it took me two hours to mow my one acre yard last week and this week I’m mowing four acres, I could estimate that it will take eight hours to mow.

However, if the first one hour was spent transporting my tractor and preparing it to mow, the estimate would need to be scaled appropriately: 1 hour for transporting and then four hours to mow, for a total of five hours.

Example

You are the project manager for the annual Earth Day 5k road race, with three primary components: marketing, registration, and race-day coordination.

For marketing, there will be 500 flyers printed up at a cost $0.20 each.
It took two weeks for the flyers to be printed for last year event, so you estimate two weeks for the printing of the brochures for this event.

Last year it took one week to design the on-line registration form and the cost to host the registration website was $850.00 You estimate the same this year.

There will be four people used to coordinate the race. Each resource will be paid $25 per hour and they will be working an estimated seven hours, based on the race last year.

Marketing
Cost: $100 for brochures (parametric estimating 500 x $0.20)
Duration: two weeks (analogous)

Registration
Cost: $850 (analogous)
Duration: one week (analogous)

Coordination
Cost: $700 (parametric estimating  4 x $25 x 7)
Duration: 7 hours (analogous)

Summary

Similarities between analogous and parametric estimating:

  • Can be used for both duration and cost estimating
  • Essentially a combination of historical information (leveraging past projects/activities) and expert judgment

Differences between analogous and parametric estimating:

  • Analogous is considered top-down and is less accurate than parametric. Analogous estimating uses an “analogy” – comparing a past similar project to your current project.
  • Parametric is more accurate, specifically when the underlying data is scalable. Parametric uses a relationship between variables (a unit cost/duration and the number of units) to develop the estimate.

See all posts in our PMP Concepts Learning Series

9 Comments

  1. Samson on November 25, 2015 at 9:10 pm

    Many thanks for this valuable information. Warm regards

    • Devin Fremouw on December 3, 2015 at 3:20 pm

      You are very welcome Samson. Thank you and best of luck on your exam preparation!

  2. Simon on February 10, 2016 at 9:22 am

    Was watching a project management video and I really couldn’t understand the concepts. You clearly explained it here. Thanks

  3. lisa dawson on March 25, 2016 at 6:20 pm

    This explanation cleared up the mud for me. I am also studying for the exam and was hit or miss on questions when both types of estimating techniques were present as one of the answers. I was focusing on the word historical. Needed to be more granular. Analogous is a comparison whereas parametric looks as the similarity of the relationship.

  4. Poonam Thawani on April 14, 2016 at 11:35 pm

    Very nice explanation with examples. I could clearly understand concept.

  5. Metrine Nakinai on May 7, 2016 at 8:44 am

    Thanks for the credible information

  6. Kelvin on May 21, 2016 at 5:58 pm

    Good explanation

  7. Sudev Nair R on January 21, 2017 at 12:33 pm

    Thank you so much …..

  8. Adeel Jan on April 21, 2017 at 12:08 pm

    Thanks for making it so easy with your explanation

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