What are the tools and techniques for performing cost aggregation?

1 Bottom-up estimating

Bottom-up estimating is a technique that involves estimating the cost of each activity, work package, or deliverable in the project, and then adding them up to get the total project cost. This technique is more accurate and detailed than top-down estimating, but it also requires more time and resources. Bottom-up estimating is usually used when the project scope and requirements are well-defined, and the project team has sufficient expertise and data to make reliable estimates.

2 Expert judgment

Expert judgment is a technique that involves consulting with experts or experienced professionals who have knowledge and skills in cost estimation and aggregation. Experts can provide valuable insights, opinions, recommendations, or adjustments based on their previous experience, lessons learned, best practices, or industry standards. Expert judgment can be used to validate, refine, or improve the cost estimates and aggregations made by other techniques.

3 Historical information

Historical information is a tool that involves using data and information from previous similar projects or activities to estimate and aggregate the cost of the current project. Historical information can include project documents, records, reports, databases, or benchmarks that can help to compare and adjust the cost estimates and aggregations based on the similarities and differences between the projects. Historical information can be used to increase the accuracy, consistency, and credibility of the cost estimates and aggregations.

4 Reserve analysis

Reserve analysis is a technique that involves adding a contingency reserve or a management reserve to the total project cost to account for the uncertainties and risks that may affect the project cost. A contingency reserve is a portion of the project budget that is allocated for known or foreseeable risks that may cause cost overruns, such as scope changes, quality issues, or resource fluctuations. A management reserve is a portion of the project budget that is allocated for unknown or unforeseeable risks that may cause cost overruns, such as natural disasters, regulatory changes, or stakeholder conflicts. Reserve analysis can be used to increase the confidence and flexibility of the project cost.

5 Cost aggregation tools

Cost aggregation tools are software applications or systems that can help to perform cost aggregation more efficiently and effectively. Cost aggregation tools can provide features such as data collection, analysis, calculation, visualization, reporting, or integration that can help to automate, simplify, or enhance the cost aggregation process. Cost aggregation tools can be used to reduce the errors, inconsistencies, or delays in the cost aggregation process.

6 Cost baseline

Cost baseline is the output of the cost aggregation process. It is the approved version of the total project cost that serves as a reference point for measuring and controlling the cost performance of the project. It includes the aggregated costs of all the project activities, work packages, or deliverables, as well as the contingency reserve and the management reserve. Cost baseline can be used to communicate, monitor, or adjust the project cost throughout the project life cycle.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?