Question

What are the effects and consequences of inaccurate estimates for project management?

Answer 1

Although this question is from Operations, I will try to answer with my subject knowledge.

Effects and Consequences of inaccurate estimates for project management:

There are mainly 3 major areas (Time, cost and scope) where one has to face problems because of inaccurate estimates:

1. Time - This is the main bottleneck which gets affected first and the project undoutably gets delayed.

2. Cost - Allthough it is a different segment, it is very much proportionate to the project time line. So, due to the faulty estimate of project management, time line gets extended and thus the overhead cost also increases, thereby overshooting the project budget.

3. Scope - This factor may or may not apply because of inaccurate estimates as the scope remains same due to the fixed deliverables.

4. Resources - If the inaccurate estimate is on a lower side, then more resources need to be deployed. On contrary, if the estimate is on a higher side, the other process or dept will felt short of their budget.

There can be other effects of it too but majorly are mentioned above.

Hope this helps to some extent.