Parametric estimating sounds really geeky – and it is! However, something that enables you to produce an estimate for a project in a matter of minutes rather than weeks is worth considering.
Written by Rob MacDonald
CEO & Director
Firstly, what is parametric estimating? I’ll borrow a definition from the Parametric Estimating Handbook¹:
“Parametric Estimating is a technique that develops cost estimates based upon the examination and validation of the relationships which exist between a project’s technical, programmatic, and cost characteristics as well as the resources consumed during its development, manufacture, maintenance and/or modification.”
Parametric estimates are brilliant at the early and concept stages of the project. In fact, the Parametric Estimating Handbook says that “Early costing cannot be done effectively any other way”.
In many cases the model that you use to do the estimate is actually doing the design of the project for you as it is producing the cost. This ensures that the costing is completely aligned with the technical aspects of the proposal.
Highways England (UK) was interested in converting much of their highway system to Managed Motorways. They used a parametric cost model in Benchmark Estimating Software to produce sixty-four estimates in a six-week period, an impossible task using conventional estimating methods. For the full story you can download the white paper case study on the Managed Motorways model on this web site.
If you produce estimates at the early or concept stages of the project life-cycle then you may wish to consider producing a parametric model. If you would like to discuss whether to do this, and how it might be done, then feel free to contact me.
¹The Parametric Estimating Handbook is developed by the International Cost Estimating and Analysis Association (ICEAA). Visit the ICEAA web site for more information about this association.