1

Back of the envelope calculations are not meant to be very accurate - but they are meant to be better than random guesses. The process of making one usually helps remove bias from your answer, and should converge to a general ballpark which is close to the answer you're looking for.

Several PMs I've spoken with so far tell me that, when interviewing, while they don't expect a very accurate answer from a back of the envelope calculation for the interviewee, they do expect that the number won't be off by too much - that is, not more than one order of magnitude in either direction.

I was surprised to hear an answer so consistent - multiple PMs from multiple industries, citing exactly the one order of magnitude margin of error.

So, I'm wondering where that one order of magnitude number came from - is it some sort of industry-wide standard? Is there a methodology book or course that introduced it? Or is it just accidental anecdotal evidence from my social circle, and not spread much farther than that?

2

The PMBOK-Guide knows five types of estimates. One of them is the Rough Order of Magnitude (ROM). It has a range of -50% to +50%. As it is literally the roughest estimate, I guess your colleagues are referring to it as the minimum criteria.

And just in case you are curious, the other four types are:

  • Preliminary Estimate: -15% to + 50%
  • Budget Estimate: -10% to +25%
  • Definitive Estimate: -5% to +10%
  • Final Estimate: 0%

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.