As any project manager knows, creating estimates for a project is both crucial and stressful. While it’s easier to understand and generate estimations as the project progresses, it’s challenging to build accurate estimations at the initial stages.
How do you generate estimates at the early stages of a project with little data?
One project management technique that can help you is analogous estimation. Analogous estimating in project management is an essential estimating technique that helps build cost estimates and assess project duration and resource needs in the initial stages.
Let’s look into what the technique is, how it works, its methodologies, and more.
Analogous Estimating in Project Management & Development
- What is Analogous Estimating in Project Management?
- Analogous Vs. Parametric Estimating
- Methodologies of Analogous Estimating
- Benefits & Drawbacks of Analogous Estimating
- Step-by-Step Guide to Analogous Estimating
- Step 1: Find out the new project domain and technology requirements
- Step 2: Work on finding a similar past project
- Step 3: Compare the projects
- Step 4: Generate cost and duration estimates for the planned project
- Step 5: Identify similar activities in past projects
- Step 6: Create the final estimations with the gathered data
- Analogous Estimating Example
- Frequently Asked Questions (FAQ)
Summarize this article for me pleaseWhat is Analogous Estimating in Project Management?
Analogous estimating in project management is an agile technique that uses historical data from past projects with similar deliverables or tasks to predict a current project’s cost, duration, and resources. The more past information available, the better the prediction in an analogous estimate.
Here’s how you can use analogous estimating in project management:
- Choose a comparable project: Pick a past project that closely matches the new one. For example, if your current project is on market research, pick a past project that involves similar activities. The similarities between the past project and the one you’re estimating for decide the accuracy of predictions
- Find items relevant to both projects: Identify values, like cost, duration, scope, and specific tasks, that are similar in both projects to create estimations
- Jot down the similarities: Make a list of the similar items in both projects for easier comparison
- Pick your estimates: Compare both project items and pick the estimates you need for the current project based on stakeholder requirements, such as budget, timeframe, scope, team member’s daily/ weekly work hours, and required resources based on the past project data
Summarize this article for me pleaseAnalogous Vs. Parametric Estimating
Parametric estimating is a data-driven and accuracy-based technique that uses activity unit rates and statistical relationships between variables to accurately define project costs, resources, and duration.
Both parametric and analogous estimating techniques in project management use historical data differently. Here are a few differences between analogous and parametric estimation.
| Key differences | Analogous Estimating | Parametric Estimating |
| Basis of estimation | Creates a generic project estimation based on historical data of similar projects. Involves using details like scope, cost, and time of previous projects and expert judgment | Uses unit-wise calculations and statistical analyses to estimate duration, money, project resources Involves identifying and using parameters in historical information that correlate with duration, cost, or project resource values to estimate current project values |
| Accuracy and applicability | Acts as a starting point for project estimations Less accurate than a parametric estimate and best for projects with limited data availability | Offers more accuracy than an analogous estimate, using detailed calculations and statistical relationships Best for well-defined projects |
| Complexity | A simple and quick technique No statistical approaches involved | More complex and time-consuming than analogous estimation Involves statistical calculations and adjustments |
While the differences are clear now, here’s when to use parametric and analogous estimation in project management:
- Use of analogous estimation: Project managers commonly use analogous estimation in the initial phases to generate rough estimates. Use this technique when detailed data is unavailable
- Use of parametric estimation: Parametric estimating is a data-driven approach requiring detailed calculations and project evaluation data. This technique is mainly used for projects that offer detailed information and defined parameters, like unit prices of materials, labor, or other project components
Summarize this article for me pleaseMethodologies of Analogous Estimating
Analogous estimating in project management is a top-down estimation technique, which means you get the complete project’s estimation and then break it down into smaller project elements. Here are two methodologies of analogous estimating you can use.
Parameter-based analogous estimating
This methodology estimates the current project’s budget, scope, and resources using specific variables or parameters from previous projects. In short, it uses the critical project parameters that impact outcomes and project management KPIs.
For instance, if market research in a past sales analysis project took 10 hours, you can use this parameter to estimate the duration of a similar market research task in the current project. Similarly, project managers can estimate other parameters for the current project, like cost or resources, through comparison.
Lifecycle assessment-based analogous estimating
Using this methodology, project managers consider a comprehensive view of previous project life cycle stages—from start to completion—to estimate a new project’s resources, costs, and timeframes.
Let’s say you had a past software development project with the phases of resource collection, designing, development, testing, deployment, project metrics analysis, and feedback. Using lifecycle assessment-based analogous estimation—you must analyze the specific resources and time allocated to each project phase. This information helps estimate the parameters of a new software development project.
Summarize this article for me pleaseBenefits & Drawbacks of Analogous Estimating
Like other project management techniques, analogous estimating has benefits and drawbacks.
Benefits
- Minimum resource and cost requirements: Analogous estimating provides basic estimation quickly with minimum resources. It is a cost-effective technique that involves fewer processes and documentation
- Gradual estimation improvement: While analogous estimating is apt for the early project stages, it is helpful at any point through the project to refine your estimations
- Granular-level estimation: Analogous estimating in project management helps estimate the timeframe and effort required for individual tasks, subsequently helping you analyze the bigger picture
- Feasibility analysis: The technique helps project teams evaluate the feasibility, budget, and potential return, ensuring informed decision-making
Drawbacks
- Limited accuracy: The technique might lack accuracy due to limited project information and changes in variables like resources and inflation rates
- Assumption-based: This technique relies on the assumptions made on past project data. However, historical data might not represent the current project accurately
- Not suitable for unique projects: If you have no historical data available, analogous estimating won’t be feasible
Summarize this article for me pleaseStep-by-Step Guide to Analogous Estimating
Among the agile estimation techniques, analogous estimation is one of the most straightforward and useful when producing estimates for a project’s initial stages. To make the most of this technique, leverage a project management software like ClickUp.
ClickUp is an all-in-one solution for all project-related tasks. It stores project information, lets you set up workflows, track progress, assign tasks, and streamline project processes.
Here’s how you can use the benefits of a project management software like ClickUp to generate estimations for your next project using analogous estimating.
Step 1: Find out the new project domain and technology requirements
Identify the previous project domain (whether it belongs to marketing, product development, construction, or another field) and the required tech resources. For example, your new project might be a software development or product marketing initiative. Once you identify the domain, you understand the technology required for the project. This makes searching for a similar past project easier.
Step 2: Work on finding a similar past project
Start by building a list of past projects (say, ten or more) based on variables like domain, teams, project management goals, or context. Then, shortlist the projects that you find comparable until you have two or three projects for comparison.
Step 3: Compare the projects
Once the list of comparable projects is ready, start the comparison based on the most relevant variables. The more similar the variables you find, the more accurate your project estimates will be.
Within the list, you can add individual projects as tasks in ClickUp. Moreover, with ClickUp Custom Fields, you can specify all the important factors (budget, timeline, resources, etc.) on which you wish to compare projects. Values for those particular variables can then be assigned to each project task.
Apart from the list view, ClickUp Kanban Board can help you view the tasks at a glance, group them based on commonalities, priority, or status, sort using custom fields, and filter tasks based on assignees.
Pro Tip: Use ClickUp Time Tracking to make informed decisions during project comparisons. It empowers you with valuable historical data, which you can leverage to create more realistic and accurate time estimations for your new projects.
Step 4: Generate cost and duration estimates for the planned project
Cost and duration are the two primary variables that project managers estimate first. Once you compare the projects, get rough estimates of how long the projects took to complete and the associated costs. Also, estimate other variables based on project activities and stakeholder demands.
Use ClickUp’s Cost Analysis Template to view budgets and track overall project costs. This template improves resource allocation, helps you stay updated with real-time cost performance, and helps you understand trade-offs between project lifecycle cost and value.
Step 5: Identify similar activities in past projects
Find similar activities in past projects to generate a final estimate. For example, if it’s a product development project, identify similar activities and themes in past projects at specific development stages, like design or deployment. Create cost, duration, and resource estimations for these individual tasks.
Pro Tip: ClickUp Brain can scan through lengthy product development documents and summarize them for you in seconds. These summarized documents help you quickly grasp the core aspects of product development documents and make finding similar activities in past projects simpler and quicker.
Step 6: Create the final estimations with the gathered data
Once your estimates are ready, you can start with your project execution. Use your final estimates (a single value or a range of values) to create a project execution workflow.
ClickUp’s Work Breakdown template can help you create a clear view of project tasks, timelines, and deliverables and estimate project costs and resources more accurately at a granular level. Use this template to ensure that tasks are defined, resources are assigned, and progress is tracked consistently.
Once you’re ready with your estimations, ClickUp can help you create a project roadmap that details the strategic steps your team needs to take to deliver project outcomes on schedule. This roadmap clearly shows the project timelines, scope, priorities, expectations, and goals to progress the project faster.
Combine analogous estimating with ClickUp’s Roadmap Template to ensure seamless and strategic project planning. This fully customizable project roadmap is packed with tools to help you track projects, strategize and prioritize tasks, and collaborate with your internal teams to ensure on-schedule deliverables.
Summarize this article for me pleaseAnalogous Estimating Example
A project manager is assigned to estimate the cost and duration of a new social media marketing campaign. Here are the details:
- Project: Social media marketing campaign promoting new website launch
- Goal: To drive traffic to the new website—18,000 visitors per month.
- Challenge: Since the project is in its early stages, the manager lacks detailed timelines or cost quotes.
- Solution: The manager uses analogous estimating in project management to develop rough estimates. Here are the steps:
- The project manager lists ten similar past social media marketing campaign projects
- After thoroughly reviewing each project, the manager finds the most similar variables—cost, duration, activities, scope, target audience, and social channels
- Using this data, the project manager calculates the current project’s estimates. Since the initial estimates might not be accurate, the manager can gradually refine the estimates using more details as the project progresses
Summarize this article for me pleaseGet the Right Project Estimates with ClickUp
Analogous estimating in project management is popular among professionals. Ask why? Because of its ease of use, quick results, and fewer processes.
When a new project begins, analogous estimating is the preferred method to gain a rough estimate of the project costs, resources, and duration. While it’s a basic technique, the estimations can be pretty credible.
With ClickUp, the analogous estimating process gets even easier. ClickUp’s easy-to-use and customizable project boards and templates enable you to get your project estimates in no time. Sign up now for free and take it for a spin!
Summarize this article for me pleaseFrequently Asked Questions (FAQ)
What is the difference between parametric and analogous estimating?
The primary difference between parametric and analogous estimating in project management is that the parametric estimating technique uses comparisons and unit-based calculations. Parametric estimates leverage statistical relationships between variables to calculate current project costs or resources. On the other hand, analogous estimates use historical data from similar past projects for a new project.
What is an analog estimator?
An analog estimator is a method that uses information from similar past projects to estimate cost and duration of a current project. The analogous estimation method involves choosing a past project closely similar to the new one to generate accurate estimations.
What is the analogy principle of estimation?
The analogy principle of project estimation involves using the parameters of a past project similar to the new project to derive cost estimates etc. This principle forms the basis of analogous estimating in project management, where estimates are generated using historical data from past projects.
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