What elements need to be considered in developing a cost estimation for a project?

When given the task to develop a cost estimation package, the estimator must first establish the following.

?a description of the purpose of the package (i.e. what type of estimate is required: planning, feasibility, Title I, Title II, etc.);

?a description of the technical scope; and

?a schedule or timeframe for the project.Once these are established or developed by the estimator as an assumption, the preparation of the cost estimation package may begin.If developing a revision to an existing package, the estimator must also obtain the complete cost estimation package from the previous estimate.

Technical Scope:

The technical scope should include all requirements for the project or program. It should include the following information:
?detailed description of work to be performed;

?work not included in the scope;
?description of regulatory drivers;
?deliverables;
? any constraints or special conditions;
? sequence of events and any interdependencies;
? milestones;? work breakdown structure (WBS); and
? code of accounts (COA).

The above items should be provided to the estimator by the program/project manager or the estimator may assist in their development.

Once the technical scope information is available, the estimator can start developing the estimate. As the estimate is developed, the estimator should keep well-organized worksheets and documentation.

Key steps in project cost estimate:

1.Determine Estimate Basis In this activity, the estimator gathers scope related information and data concerning the project. Specialty groups that will provide scope and/or cost data are identified. Site visits to the project location aid in capturing unique project characteristics and conditions. Documents that describe the scope and other project attributes required to estimate project costs are organized.

2. Prepare Base Estimate This activity determines the applicable estimating technique(s) such as conceptual or parametric, line items using historical bid pricing, and cost based. Estimate information (quantities, standard items, etc) is developed and documented. The estimate basis and assumptions are documented. Costs are estimated using the appropriate technique and project information. The base cost estimate is summarized to include all costs.

3. Review Estimate The activity starts with determining the level of review necessary. The review process covers the estimate basis and assumptions, verifies completeness of the project scope and the appropriate use of estimate information and data. The current estimate is reconciled with the baseline estimate with differences explained. An estimate package is prepared.

4. Determine Risks and Set Total Project Cost The activity begins by determining the required level of risk analysis. Risks are identified. A risk analysis is preformed from which risks are identified and the total project cost range is determined.

5. Determine Estimate Communication Approach This activity determines the needs of stakeholders for project cost information. Appropriate methods to communicate project scope, costs, and risks are developed. Cost estimate information is approved for released.

6. Obtain Management Endorsement (Approval) This activity requires that an approval package summarizing the cost estimate be prepared. Management endorsement is obtained. The cost estimate is released for use by the project team.

source: http://www.directives.doe.gov/pdfs/doe/doetext/neword/430/g4301-1chp2.pdf.
http://www.wsdot.wa.gov/NR/rdonlyres/45B85BFF-6813-439C-B82B-3AE50544A023/23824/PrepareCostEstimate.pdf.

How does a manager determine the feasibility of one technology alternative over another?

The feasibility of one technology alternative can be determined on the basis of number of factors such as:

1) The primary factor that affects the choice of the technology is the fact that whether or not the proposed technology provides strategic or competitive advantage to the organization. In other words, the choice of one technology over another rests on the fact that which one provides more strategic or competitive advantage to the organization.

2) The second important consideration will be the cost. Cost benefit analysis is a must for choosing any kind of technology initiative and comparison between two alternatives involves cost comparison between the two alternatives as well.

3) Another consideration will be the scalability of the technology. Manager must determine the long term prospects of the technology in the sense that whether or not changes in the near future will make this technology obsolete or if changes occur, whether or not such technology can be upgraded.

4) Another consideration will be the infrastructure requirements for the different alternatives. In other words, manager need to consider what kind of infrastructure requirements each of the alternatives require and whether or not organization possesses such infrastructure.

Which skills do you think are most important for an information technology project manager? Can a project manager learn all of these skills, or are some innate?

Some of the most important skills for an IT project manager are:

1) Extensive knowledge about the latest trends, technologies and emerging changes in the information technology arena. This will help the project manager to upgrade the existing systems at the right time and with the right technology and thus help the organization in sustaining the competitive and strategic advantage over others.

He should be well versed with the latest technologies available in the marketplace and should keep himself abreast of the availability of products, pricing,etc. with different vendors.

2) He should display strong project management skills such as:

Strong written and verbal communication skills.
Budgeting and scheduling skills
strong partnering, coaching, and mentoring skills
problem solving and decision making skills
ability to work effectively in a fast-paced environment as a leader

Project manager can learn most of these skills via education, practical experience gained over years by working in real life projects,etc.