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Glossary

Top-down Estimation

Summary

The top-down estimation is an approach to determining project resources and costs that starts from a global perspective. This approach is based on the experience and knowledge of experts and uses existing information from similar projects. Top-down estimation enables quick planning and easier adaptation to changes, but it also carries the risk of inaccuracies and misjudgments. The success of the top-down estimation depends on the quality of expert opinions and the available data.

Introduction

The top-down estimation, also known as "global estimation" or "expert judgment," is a method for determining project resources and costs that is based on the experience and knowledge of experts. In this approach, existing information from similar projects is used to derive an estimate for the current project. Unlike bottom-up estimation, which is based on the detailed analysis of individual tasks, top-down estimation takes a global perspective.

Advantages of Top-Down Estimation

  • Quick Planning: Since top-down estimation is based on expert opinions and existing information, it allows for faster planning than bottom-up estimation, which requires analyzing each task individually.
  • Adaptability: Top-down estimation is more flexible and easier to adjust to changing conditions or new information. This is particularly advantageous in the early phases of a project when many uncertainties exist.
  • Simplification: By simplifying the estimation process, top-down estimation can save resources and make planning more efficient.

Disadvantages of Top-Down Estimation

  • Inaccuracy: Since top-down estimation is based on a global view and expert opinions, it can be less accurate than bottom-up estimation, which is based on the detailed analysis of individual tasks.
  • Misjudgments: With top-down estimation, there is a risk that expert opinions and existing information may be flawed or insufficient. This can lead to misjudgments and incorrect assumptions that negatively affect the project.
  • Lack of detailed information: Since top-down estimation is based on a global view, it provides less detailed information about individual tasks and their resource requirements than bottom-up estimation.

Application of Top-Down Estimation

Top-down estimation is often used in the early planning phase of projects when there are still many uncertainties and detailed analysis of individual tasks is too cumbersome or not yet possible. It can also be used to review bottom-up estimates to identify possible deviations and sources of error.

The following steps should be considered when applying top-down estimation:

  1. Definition of project goals: The goals of the project must be clearly defined and understood in order to make a meaningful estimate.
  2. Selection of experts: It is important to select the right experts for the top-down estimation, who have the necessary knowledge and experience to provide a reliable estimate.
  3. Identification of similar projects: To base the estimation on existing information, it is necessary to identify similar projects and use their data and experiences.
  4. Reconciliation of expert opinions: The opinions and estimates of the experts should be reconciled and discussed to identify possible deviations and sources of error and to improve the estimation.
  5. Documentation and review: The estimates should be documented and regularly reviewed to make adjustments and increase the accuracy of the estimation.

Success Factors of Top-Down Estimation

The success of top-down estimation depends on various factors:

  • Quality of expert opinions: The estimates are based on the knowledge and experience of the experts. The more qualified and experienced the experts are, the more reliable the estimates will be.
  • Availability of data: Top-down estimation uses existing information from similar projects. The more and better the available data, the more accurate the estimate can be.
  • Communication and collaboration: The coordination and discussion of expert opinions are crucial for the success of top-down estimation. Open and constructive communication and collaboration help to identify potential sources of error and improve the estimation.

Conclusion

Top-down estimation is a method for determining project resources and costs that is based on the experience and knowledge of experts. It allows for quick planning and is flexible to adapt to changing conditions. However, it also carries the risk of inaccuracies and misjudgments. The success of top-down estimation depends on the quality of expert opinions and the available data. In combination with bottom-up estimation, top-down estimation can help to identify possible deviations and sources of error and improve planning.