Make or Break: Why Accurate Cost Estimation Is Key

A recent articlefrom executivebrief.com sent to me By Dr. Ricardo Valerdi of MIT discusses how the accuracy of the cost estimation process can make or break a project’s success.

“When it comes to controlling costs, it is a critical first step to make appropriate estimations at the outset of a project. Being able to control costs is largely a matter of adhering to established guidelines, oftentimes by learning from previous projects and reacting to current circumstances efficiently and effectively.”

It is amazing to me how simple this concept is, yet how many CEO’s don’t even know it is possible. Accurate estimates (of course with risk and uncertainty factored in) yield viable project plans which can then be successfully monitored and controlled. In fact the application of techniques such as earned value management, as powerful as they are, crumble when the baseline plan is unachievable.

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