Estimates

Purpose

The purpose of this estimate is to provide a price and baseline for completing each phase of the Project.  This Estimate will be used to seek approval for the Implementation Phase.  The estimate will also be used to measure and monitor the implementation during each phase and as a basis for reviewing the Projects performance after completing each phase.

The Estimate forms the Cost Breakdown Structure for the Project.

Derivation and Source Requirements

The Estimate will be derived using products define by the Product Breakdown Structure, the deliverables defined by the Deliverable Breakdown Structure, Schedule, and the identification of the resources that will be used to complete these deliverables.

The costs in completing similar deliverables and the past performance of the resources being used will also be used to determine the estimate Implementation Plan.

Composition

For each Product (line item) including network connections, training and test equipment the Estimate should clearly identify:

·       Description and reference to appropriate defining documents,

·       The total cost - in terms of, external spend,

·       Estimating error – a tolerance in terms of percentage that will be applied to the costs to address any estimating errors.  This tolerance will reflect the amount of uncertainty.

For each Deliverable (line item) including any risk mitigations the Estimate should clearly identify:

·       Resource types required – as defined by the Resource Types,

·       The total cost - in terms of labour, capital and travel,

·       Estimating error – a tolerance in terms of percentage that will be applied to the costs to address any estimating errors.  This tolerance will reflect the amount of uncertainty.

For Estimates the following information must also be provided

·       Assumptions – the assumptions that the estimate is based upon and that if invalid will impact on the estimate.

·       Risks – Risks to the validity and accuracy of the estimate (as defined by the Risk composition.

·       Dependencies and constraints that may impact on the estimate.

Quality Criteria

Has the estimate been agreed and reviewed by the relevant Team Managers?

Are all the assumptions and risks that may impact on the estimate clearly identified and agreed?

Are all the dependencies and constraints and their potential impact on the estimates clearly identified, for example are the identified resources available?

Does the estimate align and support the Product Breakdown Structure?

Does the Estimate align and support the Deliverable Breakdown Structure?

Does the estimate clearly identify the costs in terms of man hours for specific resource groups, capital and travel and related expenditure for each deliverable?

Does the estimate define and explain the estimating error associated with these costs?

Does the estimate support the Project’s schedule?

Is the estimate credible?

Quality method and skills

During development of the estimate resources allocated to the deliverables and their Team Managers will be responsible for deriving their estimates.

The Project Team will review the estimates for each phase at peer level.

The Team Managers will sign and be responsible for completing the defined deliverables within the price provided.