Parametric Estimating: Application in Complex Project Management

This essay delves into the concept of parametric estimating within the context of project management, focusing on its application to complex projects. It begins by introducing parametric estimation as a method to determine project costs and schedules, particularly highlighting its reliance on historical data and statistical analysis. The essay then explores the methodology's applicability across various project types, including both engineering and non-engineering domains such as welfare projects. It examines the advantages of parametric estimation, such as providing accurate budget estimations and realistic scheduling, but also acknowledges potential challenges like relating costs directly to project requirements and managing scope creep. The discussion includes advanced parametric estimation techniques, such as expert systems, to enhance accuracy and customization. The essay concludes by summarizing the significance of parametric estimation in managing complex projects, emphasizing its potential to develop realistic schedules and cost estimations for diverse project types.

Running head: MANAGING OF THE COMPLEX PROJECT
MANAGING OF THE COMPLEX PROJECT
Name of the Student:
Name of the University:
Author Note:

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Introduction
The complexity of the project has certain influence on estimation of the cost and
schedule. The parametric estimation is used to evaluate the complexity of different independent
variables. It is a top down process that contains a number of steps for the gathering of the data
and determination of the relationship regarding the estimation of the cost and statistical analysis
(Cooke-Davies, 2013). There are certain application for the estimation of the cost such as historical
trend analysis (HTA) ,business case (BC), economic analysis (EC) and investment appraisals
(IA).
Discussion
The parametric estimation is applicable for the different types of project management. In
parametric estimation the estimation of the cost and budget of the complex project is dependent
on the gathering and analysis of the past historical data (Kerzner, 2017). The design of this
parametric estimation needs the engineering approach. However, this method of estimation is
applicable for estimation in the non engineering project management such as welfare project
management (Head & Alford, 2015). The approach of the estimation is numerical. However, in
the every project the data regarding the estimation of the budget and the schedule is numerical.
In this case, the application of the parametric estimation is applicable in the non engineering
projects as well as engineering project.
In case of non engineering projects the estimation of the budget is done at the initial stage
of the project. In this case the estimation of the budget is done on the basis of the past data and
the statistical analysis of those data. In this case, different types of parametric estimation can be
happened such as cost estimating relationship and schedule estimating relationship. These two

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estimation relationship show the database of the past projects. The cost estimation relationship
contains hundreds of complex algorithms. Different lower level models are brought together to
form a complex but accurate algorithm to determine the cost at the initial stage of the
development of the project. It can be said that parametric estimation is not an optimistic
approach; rather it is the logical representation of the past data regarding the similar projects in
the past. The main advantage of using this estimation is that the estimation of the nearly accurate
budget at the beginning of the project along with the realistic scheduling of the project (Kerzner
& Kerzner, 2017). There are some of the problems related to the implementation of the
parametric estimation in the project management. The main problem is that the cost cannot be
directly related to the requirement of the capability. The implementation of the requirements is
reflected in the designing of the project. The designing part needs a fixed cost and the date for
the delivery. In practical approach it has been seen that the realistic approach in the estimation of
the cost and the budget of delivering the design is realistic. In this case, the problem does not
related to the scope creep in the project (Brady & Davies,2014). The scope of the project can be
managed by the monitoring and control in the project management team. However, the problem
is regarding the convincing of the immature design of the project at initial stage. In order to
mitigate these problems the advanced parametric estimations can be applied where the
implementation of the cost and the schedule can be done in a realistic way. In the advanced
parametric estimation the expert system is created in order to compare the reliability of the cost
and schedule estimation of the project with the previous projects (Ahern, Leavy & Byrne, 2014).
The advanced estimation system can be developed through various parametric estimation
models. The main advantages of these models are that these models can be customized according

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to the requirements. There are certain points those are needed to be considered while the
implementation of the parametric estimation techniques in the managing of the complex projects.
Conclusion
The discussion is regarding the managing of the complex projects and the significance of
the parametric estimations in handling of the complex projects. The significance and the
advantages of the parametric estimation in the complex project have been evaluated. However,
there are certain problems which are needed to be considered in the management of the complex
project has been discussed. Certain steps are discussed in order to mitigate the problems
regarding the application of the parametric estimations. It can be concluded that parametric
estimations will help to develop the realistic schedules and the estimation of the cost for both
engineering and non engineering projects.

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References
Ahern, T., Leavy, B., & Byrne, P. J. (2014). Complex project management as complex problem
solving: A distributed knowledge management perspective. International Journal of
Project Management, 32(8), 1371-1381.
Brady, T., & Davies, A. (2014). Managing structural and dynamic complexity: A tale of two
projects. Project Management Journal, 45(4), 21-38.
Cooke-Davies, T. (2013, August). Aspects of complexity: Managing projects in a complex
world. Project Management Institute.
Head, B. W., & Alford, J. (2015). Wicked problems: Implications for public policy and
management. Administration & Society, 47(6), 711-739.
Kerzner, H. (2017). Project management metrics, KPIs, and dashboards: a guide to measuring
and monitoring project performance. John Wiley & Sons.
Kerzner, H., & Kerzner, H. R. (2017). Project management: a systems approach to planning,
scheduling, and controlling. John Wiley & Sons.