Project cost estimation is the process of forecasting the total money required to complete a project successfully. It helps you plan budgets, allocate resources, and make informed decisions from the very beginning. Without accurate project cost estimation, project teams face a high risk of budget overruns, delays, and scope issues. Cost estimation for projects also…
Project managers often struggle to create accurate timelines when uncertainty is high. The three-point estimating technique offers a practical solution by balancing risk and realism. Instead of relying on a single guess, this method considers optimistic, most likely, and pessimistic scenarios to produce a more reliable estimate. Widely used in project scheduling, the three-point estimating…
Bottom-up estimating is one of the most accurate methods for estimating project costs, durations, or resources. It helps you create realistic budgets and schedules. This approach starts by breaking the project into small tasks. Each task is estimated for time, cost, and resources. These small estimates are then added to form the total project estimate….
Estimating the cost or time of a new project can feel like peering into a foggy future. One proven way to cut through the haze is analogous estimating, a technique that draws on lessons from similar past projects. It’s quick and practical, making it ideal for early planning when details are scarce. In this blog…
Parametric estimating is more than just a formula—it’s a powerful cost estimation model that helps you make sense of big numbers when facing uncertainty. This project budgeting technique allows you to predict costs or duration based on measurable factors, providing a data-driven approach to planning that’s essential in today’s competitive environment. Whether you’re pricing a new office building or…
You will often want to know how much more money you need to complete a remaining task.
In your personal matters, you can go with a guess, but in your professional life you must adopt a professional approach and use proven techniques to reach a decision.
In project management one such technique is the Estimate to Complete (ETC), which is another forecasting technique used along with the estimate at completion.
This technique gives you an approximate idea of how much money will be required to complete the remaining balance of work.
Since this is a very important forecasting technique, I will explain this topic with three simple examples in three different scenarios, so you can understand it properly and then we will move on to mathematical examples.
This topic is very important for the PMP exam. You may see a few questions from this topic on your exam.
Okay, let’s get started.
Forecasting helps us predict future events, and it has been used in every part of the world since the dawn of time.
People from different cultures use different methods to predict the future. Some people use the movement of the moon or stars to predict the future and others use palm lines to predict it.
In project management we also do forecasting to find the future performance of projects.
However, here the forecasting is based on past performance and objective data, which provides you with the future progress of the project and gives an early indication if anything may go wrong.
Cost overruns and schedule slips remain a major headache for project teams. A report cited by Wrench Solutions shows that 1568 infrastructure projects in India had a combined cost overrun of $60 billion USD, representing a 22.92% increase over original budgets. Worldwide, over half of project managers say budget overruns are a leading cause of…
The To Complete Performance Index (TCPI) is the third forecasting tool mentioned in the PMBOK Guide.
This is a relatively new term which was coined by the PMI to assist project managers in calculating the future cost performance of the project.
Since the concept of TCPI is new and there is not much research available on this topic, it often confuses many people.
However, there is some good news for you. Now that I have passed the PMP exam and have a better understanding on this topic, I am writing this blog post to make this concept easier for you.
First I will explain to you the definition, next I will show you a real world example, and then finally I will give you mathematical examples to hit the last nail in the coffin.
Okay let’s get started.