![]() Calculating order of magnitude during project development Here’s how you can use this technique to suit your project. While order of magnitude may have its drawbacks, it’s still a popular method for figuring out a ballpark estimate. For example, you may be referencing costs from a previous project that have since risen substantially, or making incorrect assumptions with respect to the time it takes to complete a task. At the start of a project, it’s impossible to arrive at a single figure that will remain accurate throughout, but it’s still important to strive for the most accurate range possible based on the limited information you have at hand.Īnother risk lies in the information and historical data you use to come up with your estimated range. For this reason, any estimate created using this method could end up being wildly inaccurate. Order of magnitude provides a range of potential figures, rather than one single number. “Order of magnitude” is a part of our Project Management Glossary - check out the full list of terms and definitions! The risks of relying solely on order of magnitude What if you were to solely rely on order of magnitude to get your project cost estimate? What does the size of the sun compared to the earth have in common with your estimated project cost? They both use order of magnitude to estimate a number without the support of specific details. So why use both and not just a definitive estimate? For that, you require more knowledge and details of the project, so it’s best used later on once the project is underway to tighten up the cost range. Order of magnitude differs from definitive estimates, which are another, more accurate way to figure out costs on a project. As it provides a wide range rather than a single number, it’s best used right at the start of a project and refined later on. In simpler, project management terms, order of magnitude is a rough way to estimate how much a project is likely to cost when you don’t have many specific details to go by. So what does that have to do with project cost estimations? In project estimates, it’s used slightly differently and is based on other variables. It does this by making approximate comparisons between two numbers using an exponential change - usually the power of ten. It’s a way to make larger unknown numbers, like the age of the earth or the size of an atom, easier to comprehend without being exact. If you’re a bit of a number nerd, you might have come across orders of magnitude before when dealing with large numbers. ![]() Keep reading to learn more about order of magnitude, how it can help you calculate an estimated cost range, and how to use to discern the most accurate range possible so your project has a higher chance of being approved. That’s where order of magnitude can help. ![]() To get your project started and acquire the resources you need, you’ll need at least a ballpark figure. It can be tough to nail down an accurate estimate of cost, especially in the initial idea phase. Cost - it’s probably something you don’t look forward to bringing up with your stakeholders, but it’s a crucial discussion if you want to get your project approved.
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