Why Are Estimates Important?
Think about your own project experiences. Have you worked on a project where the estimates were not prepared properly? Can you recall what effect poor estimates had on stakeholders and the project staff?
Estimates are important because they establish the basis for planning and establishing a baseline for tracking. I have learned that almost every overrun of cost and schedule can be traced back to the failure of an estimate. Without a good estimate, it is almost impossible for you to have a good project.
Estimating is more than determining a magic number. Estimates combine all of the elements of the puzzle that comprise the total project, as shown in the following graphic. If any one of these elements is not considered, the resulting estimate is invalid, and an invalid estimate leads to a difficult or, potentially, a failed project.