A probabilistic approach to cost estimation
Conclusion: Deterministic1 project budgets do not convey any information about the range of possible outcomes for a project, or the associated risk factors driving the range. The ability to communicate the risk-weighted range of possible project outcomes can lead to much clearer expectations and understanding of project outcomes, especially for project sponsors. Modelling these ranges can be performed with relative ease, using basic Excel add-ins and high-level estimates of risk applied to the components that make up a project2.
About The Advisor
Michael Smit was an IBRS advisor between 2019 and 2020 who focused on project and program management, procurement and general IT business management. Michael’s experience began in tier 1 consulting and was further developed across a range of industries with a particular focus in oil and gas, pharmaceuticals and government sectors. Michael’s IT career began in project management and procurement, broadening into program management and ultimately into a head of department role, which he is currently active in. Michael has recently completed a full strategic roadmap delivery from definition to operations. The roadmap covered implementation of a Cloud-first strategy across infrastructure and end-user computing, delivery of new core business applications and full desktop refresh across seven countries. Michael’s active role in industry allows him to support clients with highly practical consulting services that are applicable in real-world scenarios.