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@Alameenbichi ,thank you for your thoughtful answer.
@SeydouDoumbia ,thanks for highlighting the advantages of the bottom up budgeting approach.
@Josimp ,yes.Incoming revenue that's not donor money needs to be separated from the funds donated by donors.I say this because donor money sometimes(but not always) comes with terms & conditions that must be followed to the letter.Its always better not to mix up these funds.One of the ways of separating these revenue streams is by opening a bank account for each of them to prevent mix ups.
@Josimp,the bottom up budgeting approach can be used at the early stages of cost estimation.The facts and figures collected using the bottom up approach are reviewed by middle & top management such that the top down budgeting approach is implemented.
@Josimp ,under what circumstances wouldn't the parametric budgeting approach not work?
@Josimp ,the most important thing I believe is budgeting for the project activities on time to prevent any possibility of delays.
I think the parametric approach, is the most effective way to generate cost estimates because is more reliable and simple to calculate .
The parametric approach is mostly adopted here for the estimate itself further broken down into direct, indirect and overhead costs plus some contingencies.
I beleive there is no best or worst way to generating costs of a project. Few things are important in estimating a project cost. One is "who is going to be in charge of spending the estimated cost." This is important because if the same person who is involved in estimating the cost, especially in the top-dowm method is still the person who is going to carry out the expences, it becomes necessary to know before hand the inetgrity of the individual involved. But where this is not the case, and the estimator of the cost does not have any relationship with the person in charge of purchese, given the experiences of the top echoleon of the project management, it will be possible to generate a realist cost.
In the bottom-down approach, when the cost are generated by the same people who will be directly involved in the expences, there is a possibility of bias. This brings up the second issue, which has to do with the integrity of the people involved in the estimation of the projects costs. This helps in a very way in generating the real cost of the projects and the required quality of the project materials.
The parametric method, though provides a better method, is not applicable to all projects. This is its problem
The parametric approach is based on cost per unit, it is important this cost per unit based estimated is carried out as soon as the project is about to begin. this will forestal the consequences of inflation that may increase the cost of the project activities and increase the rsiks and constraints.
The course is powerfully packaged. Thank you to the facilitator(s).
@Noureddine20 ,thanks for expressing your point of view on cost estimation.
@DCUN ,thanks for sharing this brilliant and thoughtful suggestion with all of us.
@DCUN ,thanks for expressing your point of view on cost estimation.
@SintayehuGetachew2020 ,thanks for expressing your point of view on cost estimation.
I thank you more.
Thank you too.
@DCUN ,you're very welcome..
I would go combining the bottom-up and top-down approach. Ofcourse paramatric when ever possibile to get the unit prices. Validating the top-down data with project Team (Distribute among the people who actually will done the job) helps in further communication of the project. The top-down approach will help to forseen the potential risks. So combning all when ever possible seems attractive idea.
@AM20 ,thanks for clearly expressing your point of view on cost estimation.
Thanks for engaging my dear colleagues. What a nice contribution from each and everyone!
This platform is really a knowledge-based one.
I believe that we should use in the same time the 3 approaches as much as possible because it will allow us to have a more realistic idea on the real budget to be implemented.
using both the top-up and bottom-down which i call the hybrid approach is fundamental,for use the top-up at the starting of the project since top management will have better idea of the project at that moment which will eliminate time wasting and brace alignment,then half way through the project use the bottom-up approach since managers and staff will accurately estimate the cost better at this stage.
@Sir_Johnson_De_Great ,your satisfaction is our joy.
@Sir_Johnson_De_Great is an e learning platform that we must be grateful.
@jtshibangu23 ,thanks for expressing your point of view on cost estimation.
@abassk ,thanks for sharing your point of view on cost estimation.
In an ideal world, parametric is the most effective, as it removes the chance of mistakes and human error. However, project planning requires a certain element of the unknown, so this will not always be possible.
I believe a combination of the three is best, with collaboration between those involved in top-down and bottom-up approaches to ensure highest accuracy.
@hollycoulter ,thanks for expressing your brilliant point of view on cost estimation.
I think the parametric method of budgeting is best suited because i think it is the most scientific method as against the other 2 methods that are quite subjective
@Erunuma ,thanks for highlighting the advantages of the parametric budgeting approach.
I agree with this approach. We may require to use all three as per the need of the projects.
@Utkalika15 ,thanks for expressing your point of view on cost estimation.
the parametric method is more relable because i can obtain the unit cost of most of the resourses needed for the project by obtaining market quotes from suppliers and build the budget with other methods such as the top down and buttom up methods
@FolaR ,thanks for highlighting the advantages of the parametric budgeting approach.
For me parametric approach is the best approach, first because it is not so complex all that is needed is to ensure that you have a true actual cost per unit and then do the multiplication, and this calculation are quite simple, so generally it sure simplifies a seemingly complex activity.
I think the parametric method of budgeting is best suited because i think it is the most scientific method as against the other 2 methods that are quite subjective
The course is powerfully packaged. Thank you to the facilitator(s).
The pragmatic approach would be bottom-up to find actual cost spending in the field. Even though there are some doubts about field staff in terms of overestimating their expectation, it is still more closer approach than top-down for the purpose of estimating required expenses for the project. The field staff know local expenses, and can figure out more accurate cost for the planned activities. In addition, the bottom-up approach helps to enhance ownership of the field staff thereby helps to implement the project effectively and efficiently. The bottom-up approach can also increase the participation of field staff in project designing, and can mobilize local stakeholders in organized manner. In this context, the bottom-up approach also helps to top leaders to understand ground reality and estimate budget more accurately and sufficient for the project activities.
The most effective way to generate cost estimate is using a certain budget format.
Parametric approach is very simple, more accurate, and time saving. Top down approach is also practical if it's thoroughly thought of and specific
I strongly agreed with my colleagues that chose parametric approach. This approach is very easy and trusted because the funders have to know and exactly understand the each cost of all activities.
I think that first thing is to research the costs online just to have an idea, or ask some work colleagues and acquaintance about it. Then, I could switch to the bottom-up approach for the items that are difficult to obtain, especially items that represent high costs, noting that I am using the parametric approach by default for every item that should be bough in quantity.
As it is known that the Parametric Approach sometimes cannot be applied in all budget situations, so it is best to choose the appropriate Approach in the right place.
I much admit that you guys are all on point, but this my view and understanding on the topic. These three approaches are all good based on the setting or locality. From my experience, It is advisable to apply the last two approaches: the Bottom-Top and parametric. While do I say so? It is very important to also involve some stakeholders who will perform certain text into the costs estimation. For example, if you are constructing a house, invite the engineer to help you in estimating the cost item after item. After the both you are done, rewrite the list of items a visit a renounce construction materials store. If you are done with yours, your team can use the two set of data to come up with a more realistic figure for costing.
I use a combination of all 3. I work for a large local nonprofit and while parametric data is helpful when available, we often engage in new projects and the expertise of those who have been in the field coupled with the perspectives of those who are on the ground produce the best budgets for us.
@Jlord1010 ,the idea of combining the three budgeting approaches is brilliant.
@sylvestrees1992 ,thanks for expressing your brilliant and thoughtful point of view on cost estimation.
@hassanonsa8 ,thanks for expressing your point of view on cost estimation.
@makram ,thanks for expressing your point of view on cost estimation.
@duolk2020 ,thanks for highlighting the benefits of using the parametric approach in cost estimation.
@Afaf-zeinoun62 ,thanks for expressing your point of view on cost estimation.
@Tesfish ,thanks for your answer.
@anod114 ,thanks for expressing your point of view on cost estimation.
@Sydney93 ,you're very welcome.
@Sydney93 ,thanks for highlighting the advantages of the parametric budgeting approach.
I believe you should use parametric approach whenever possible because, cost can be attached to each item of work
I think all approaches have their upsides, the top- bottom approach saves you time because it is quicker to estimate costs whilst the bottom up approach gives you the actual costs from the people on the ground even though trust issues from some employees might come into play. The parametric approach gives you the actaul cost-per-unit and this will ensure accuracy in estimating costs
@Shiny001 ,thanks for expressing your point of view on cost estimation.
@vmaramba45 ,thanks for expressing your point of view on cost estimation.
I believe bottom up is the best because if they will be under budget somewhere then the ones who were coming up with the cost will understand. You better when you are taking some measures to cut the budget inside to fulfill certain things.
I agree, this is the best way to estimate costs depending on the nature of the project
Good title , enables to learn more.
@PreciousUniqMtambo ,thanks for expressing your point of view on cost estimation.
@Afaf-zeinoun62 ,you're so right about this.
@Tesfish ,thanks for your answer.
As per my understanding, we should use the following 2 approaches together:
Top down and Parametric.
By using these 2 approaches together we will get some basic idea of our cost/expenditure as well as the realistic cost also.
Hello @vikasbhardwj ,thanks for your answer.
@vikasbhardwj ,thanks for sharing your brilliant answer with us.
For me, The bottom-up approach seems ideal, as it offers much more realistic costs. However, the person in charge of estimating the cost of the activities must collect the data from several people (do a triangulation) to ensure that the data collected at the base is correct.
I think the best approach for a project estimation cost is parametric estimates as it will assist in identifying the costa per activity.
@Malistoman ,thanks for expressing your point of view on cost estimation.
@Isnho10 ,thanks for expressing your point of view on cost estimation.
Yes, n I choose top-down cause its better according my experiences.
@Solon_freedom ,thanks for expressing your point of view on cost estimation.
I can use Top down approaches , because it is very and simple then the other approaches.
I agree that the top down should be use, but where feasible the bottom-up should be used to validate. Also where the parametric approach is feasible e.g. budget for items/equipment, this would be the best approach
@Tibeme ,thanks for expressing your point of view on cost estimation.
@rial ,thanks for expressing your point of view on cost estimation.
When it comes to expenses like equipment, supplies, and salaries, the obvious choice is parametric. As the budget is clearly define. But when it’s a bit vague, like human resources, communication, and risk management, I would choose top-down approach. It might not show the real cost but with extensive research combined with knowledge and expertise from different stakeholders, can reach a good budget outcome. Bottom-up would be my last resort.
A mix of the three approaches is the best way to come up with the best budget for your project depending on who is responsible for your budget. Parametric approach is very simple and realistic when you working on a known budget thus the cost per unit and multiplication can indeed produce a realistic budget estimate.
I prefer Bottom Up Approach because with this method, the cost will be more reasonable and realistic because the junior staff who are actually on the field are in a good position to estimate the costs clearly.
@TatuliAmos ,thanks for expressing your point of view on cost estimation.
@Samkelo ,using all the 3 budgeting approaches in the cost estimation process seems like a brilliant idea.
@Quest4knowledge ,thanks for expressing your point of view on cost estimation.
Thanks, your response was helpful
@usman_Hafsat ,thanks for actively participating in our course discussion forum.
I agree that when possible a Parametric approach is the best. However, I had the experience of needing to really trust local experts in approximating their own pay rate and the cost of equipment (bottom up). I believe that a combination of doing your homework to make estimates (top down) combined with bottom up and Parametric is usually the best approach,
@KristynZ ,thanks for expressing your brilliant point of view on cost estimation.
There are some approaches that needs to be use for project implementation.
1- Top down Approach, where the project manager will plan the activities of the project and how the budget be allocated for each and every activity.
2- Bottom Approach is where the cost will be allocated per activities that will cost a lot of money, if the manager doesn't take good supervision the budget will be over spent, that will cause budget constrain.
3- Parameter Approach is how the three constraints Design, Scope and Budget will be balance together..
It depends on types of project you are dealing. If you are doing similar type of project, parametric is more suitable In other hand, if you have Top down then you can relate your spending with strategic intent as well.
In an ideal situation, the Bottom-up approach given it is based on experience and research to provide real costs. And it could be backed by existing proforma invoices.
I believe the top down is a good way of generating cost estimates. Despite the fact that it may give cost that is not real, it will allow for flexibility in case there is a change in price of resources.
In my view, one can use a combination of the three approaches to estimate costs. The benefit out of combining Top-down, Bottom-up and parametric approach is that each expense can be estimated using the appropriate way. Doing so , one can mitigate disadvantages of the different approaches and come up with more realistic costs
@SENON ,combining the three budgeting approaches seems like a brilliant idea.Thanks for expressing your point of view on cost estimation.
@AgathaIBU ,thanks for expressing your point of view on cost estimation.
@rkhanal ,thanks for expressing your point of view on cost estimation.