The field of cost estimating lends itself quite nicely to parametric modelling. A little information on a new project can snowball into quite a comprehensive cost estimation. Total cost management starts with getting a high-quality cost estimation. Get a good basis so that you can, later on, use it for cost control and project controls. Good project cost management starts with good cost estimating software, which should give a user the option of parametric modelling.

What are the key benefits of parametric modelling

  • The models are based on previous experience, data you can validate yourself.
  • You already know the outcome of a model based on your inputs.
  • The same level of quality cost estimation is always available.
  • Changes in the work field, new parameters, fresh reality can always be fed back into the model.
  • A good model grows with your needs.
  • A minimum of input effort reaps great rewards.
  • If the boundaries of the model are clear, an estimate can be created easily.
  • Variants alternative are easily created and compared.
  • What was time-consuming now becomes available at a flick of a button.
  • The range of uses is quite limitless: From a cost model for a heat exchanger to a model for a complete plant.

Should we always use parametric modelling?

Models have predefined boundaries and therefore limited accuracy. Parametric models are excellent to get early figures but should, later on, be substituted with more accurate data that complies with the phase the project is in. In general, what you put in is determines what you get out. The more flexibility your cost estimation software has, the better your results will be. Some parties even provide software with out-of-the-box cost models which can be both a huge time and budget saver.

The Missing Link: Object Oriented Estimating 

Want to know more? Read the related paper: The Missing Link: Object Oriented Estimating.

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