Parametric Estimating in the Knowledge Age: Capitalizing on Technological Advances

This paper examines parametric estimating techniques applied to technology-driven projects in various industry sectors. Parametric estimating is the use of a subset of independent variables to predict the cost of a project. These independent variables may be specifications, features, functions, or some other high level descriptive elements that are used to define the scope of the deliverables at an early stage of the project when there is lack of detailed information. Parametric cost estimating are widely used for bidding on a contract, input into a cost benefit analysis for selection within a project portfolio, and as the initial stage of building a plan for project implementation. Extensive literature reviews suggest that effective parametric estimating methodology is becoming an essential tool for technology-driven organizations. The use of parametric estimating in budgeting, scheduling, and control of projects will enhance the ability of project management organizations to effectively and efficiently utilize valuable resources.