Process Definition

The PMBOK Guide defines estimating costs as the process of developing an approximation of the monetary resources needed to complete project activities.  In other words, based on the activities identified and outlined as part of 6.2, 6.3, 6.4, and 6.5, how much money, do we estimate, will be needed to complete the project work scope? 

Figure 16. Estimate Costs: Inputs, Tools and Techniques, and Outputs. Reprinted from "A Guide to the Project Management Body of Knowledge (PMBOK Guide), 5th Edition" by Project Management Institute, 2013, p. 200. Copyright 2013 by Project Management Institute, Inc. Reprinted without permission.

Process Assessment

This process gathers information from each WBS and their associated activities in order quantify what the cost should be when the project is complete.  The more defined the WBS and associated activities list be, the more accurate the initial estimate will become.  At this point, the estimate is still fluid.  For this reason, project management must ensure they factor in contingency and risk factors.  Costs associated with the workforce, material, services, equipment, and any fees associated with state or federal agencies are included in the estimation process.  Also, this process needs to be reviewed and refined as the project life cycle progresses. 

ARTIFACTS

1. PMGT 501 WBS 3.5 - Tolstoy Project: This PMGT 501 homework assignment illustrates the tools and techniques of parametric estimating for project cost estimating
2. Project Management Software: As a tool, PMGT 501 WBS 1.6 reviews the value provided by Project Management Software and how it can assist project management in estimate cost. 
3. Activity Cost Estimates:  This PMGT 614 group assignment illustrates the use of WBS dictionaries in activity cost estimating as an output of estimating cost process.