rough order of magnitude vs analogous estimates

Submitted by ggiorelli on Wed, 05/23/2012 - 14:18

Hello

Both of these estimates are done when we do not have enough information about the project to estimate it.

 

But when do we use the first and not the other and vice-versa?

 

Can we say that during the initiation phase, we use ROM and durnig the planning phase we use analogous?

 

thx

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saket_pmp

Wed, 05/23/2012 - 15:08

Take two situations:


1. I go to a person who does not even know what PMP and PMBOK v4 is and ask him the number of pages the PMBOK has by showing him PMBOK from 200 meters.
2. I go to a person who passed PMP 15 years ago and had used PMBOK v 1, and ask him the number of pages PMBOK v 4 can have.
 


How would both people respond, think…
1. The person sees PMBOK from big distance, as no idea about PMBOK, so he would say any guessed number say 800 pages.
2. This person has some past experience where he know PMBOK v 1 so can guess by saying the PMBOK v 4 should be around 500-600 pages.



Let’s relate these with your questions now.
1. This is ROM, no past experience total bouncer guess work anything like +/-50%, +/-75%, +/-100% etc
2. This is Analogous Estimating because you have used some of your similar past experience to guess the answer. See what PMBOK says on this - this technique relies on the actual duration of previous, similar projects as the basis for estimating the duration of the current project.


I am sure, it makes sense to you now. Right?


About using ROM or Analogous Estimating – both are Estimating techniques use whenever you want, that simple!

projmanpro

Wed, 05/23/2012 - 15:52

 Great illustration saket. You're the man..

PMNovice

Thu, 05/24/2012 - 04:35

 Saket,

From PMI perspective is ROM is +-50% or -25 to 75% ? I could n't find in PMBOK ?

saket_pmp

Thu, 05/24/2012 - 05:02

If you understand my illustration that I used to explain this concept, you will not expect any numbers. Please understand ROM, the first word i.e. ROUGH. When you have no idea and just do blind guess work without using any previous experience its ROM. Even PMBOK does not give its number...how would it give?, it just gives an example i.e. “For example, a project in the initiation phase could have a rough order of magnitude (ROM) estimate in the range of +/-50%.”.


The day ROM would have any fix range, it would become Expert judgment or Analogous estimating.


You have to think this way….How was estimation being arrived? If it was though guess without having any knowledge, its ROM….that simple. It can have any range e.g. +/-25%, +/-50%, +/-75%, +/-100%, +/-500% etc


I hope you understand it now why PMBOK does not give its range value, while some of other books does give. Hahahahha

PMNovice

Thu, 05/24/2012 - 23:18

 But which option to choose in the exam for ROM:

1. -/+ 50%

2. -25% to 75%

saket_pmp

Fri, 05/25/2012 - 06:58

Since the question choice has been framed wrong (the question author did not understand ROM) lets apply wrong way to answer this.


A bold note – You CANNOT get such question choice in PMP exam.


Answer – Choose +/- 50%
Justification:
1. PMBOK gives an example to explain ROM i.e. +/- 50%
2. +/-50% looks more rough from both sides compared to -25% +75% (Here -25% is little closer)
I again say, poorly framed question has to be attempted in a poorly manner. In reality, if you have to survive in the system, get used to the system.


Saket, PMP
 


 

diba_perfect

Wed, 05/23/2012 - 15:29

Gabriele,

Let me try to explain this through a real life example:

About a fortnight back my sponsor had asked me to estimate the funding requirement for my project team for 2013. I told her that "this is too early since we're not even sure what deliverables are expected from our team going into the next year". She replied "don't worry, I just want a Rough Order of Magnitude(ROM) estimate". What she meant was that she expected my estimate to have an accuracy margin of +/- 25-50%(some say +/- 50%). ROM denotes the degree of expectation of the accuracy of an estimate. ROM is NOT an estimation TECHNIQUE.

Now for estimation purposes, I spoke to my key client stakeholders who gave me a very high level picture of what work our team would be expected to deliver in 2013. Almost everyone agreed that the volume of work would be almost equivalent to what we're doing in 2012. Using this information, I decided to estimate our 2013 funding requirements to be almost the same as that of 2012. This is known as 'analogous estimating'. Thus analogous estimation is a TECHNIQUE. The degree of expected accuracy of this estimate can vary and when it's between +/- 25-50% it's known as ROM.

So we can say that generally the estimates built up during the Initiation phase are expected adhere to ROM standards. Analogous technique is ONE of the techniques which can be used to perform these estimations(during the Initiation phase or beyond).

Hope this clears the cloud!

saket_pmp

Wed, 05/23/2012 - 18:35

You have wonderfully referred PMBOK line:
ROM denotes the degree of expectation of the accuracy of an estimate. And then you say, ROM is NOT an estimation TECHNIQUE.
What is this meaning? “degree of expectation of the accuracy of an estimate” is it not a high level estimation technique? Again, you may show the next PMBOK page that ROM is not listed as T&T for Estimate Costs. Agree and accepted but what’s wrong in calling ROM an estimation techniques?


I am just questioning you for the sake of this forum. You are also PMP aspirants and it may not be a surprise when you see ROM being referred as an estimation technique and you might ignore the choice. When you think out of book line scanning and real life you have to think out of box.

morepm

Mon, 08/20/2012 - 23:34

The following information provides a comparison of the three general kinds of estimates as the project makes its way through the life cycle.

  1. ROM Estimate (Variance of -50% to +50%, or -25% to +75% depending on preference)
    • A “ballpark” estimate used to provide a starting estimate to move forward
    • A top-down estimation approach
    • Use of previous expert knowledge and experience
    • Not a great deal of time is spent to develop the ROM estimate
  2. Budget Estimate (Variance of -10% to +25%)
    • Also a top down estimation approach
    • Use of analogous estimation techniques helps provide a slightly more accurate estimate than the ROM estimate (e.g., referencing previous similar types of projects for effort)
  3. Definitive Estimate (Variance of -5% to +10%)
    • A bottom-up estimation technique that requires a decomposition of work and its level of effort that is summed up to develop a more accurate estimate
    • Generally performed during the planning phase and matained through the remainder of the project
    • This is the most time consuming estimation effort of the three listed

 

This is an excerpt out of my blog post on ROM estimation.  The full post is here if you would like to read the whole post for the full context: 

http://morepm.com/2012/08/20/how-to-develop-a-rough-order-of-magnitude-estimate-rom-estimate/

MichelleNagel

Wed, 08/22/2012 - 10:34

 thanks for the thoughs