Top Down Estimating in Primavera P6: How to use the Top Down Estimation tools in Primavera P6

Top Down Estimating In Primavera P6

Effortlessly allocate resources, conquer high-level planning, and harness the power of estimation weights with Primavera P6’s top-down estimating feature. This innovative approach empowers you to effectively distribute your project budget across your Work Breakdown Structure (WBS), ensuring optimal resource planning from the outset.

By assigning estimation weights to each WBS element and activity, you gain a clear understanding of where the most resources are needed. This cost loading approach provides a transparent view of your project’s financial landscape, allowing you to make informed decisions about budget allocation.

Top-down estimating shines for projects with predetermined budgets, particularly lump sum/fixed-price projects. By leveraging estimation weights, you can ensure your budget is allocated proportionally, mitigating the risk of overspending in one area while underspending in another.

Now, let’s delve deeper into the three key aspects of top-down estimating in Primavera P6:

It is also used to evaluate the project proposal at the strategic level. Oracle Primavera P6 allows you to make a top-down estimation and bottom-up estimation. In this article, we will demonstrate how to make top-down estimating in Primavera P6 Professional.

Top-Down vs. Bottom-Up Estimating in Primavera P6

Confusion often arises among project management professionals regarding top-down estimating and bottom-up estimating within Primavera P6. While both techniques aim to predict project costs and durations, their approaches differ significantly.

Top-down estimating provides a high-level overview of the early project phases. It leverages historical data, expert judgment, and industry benchmarks to create a preliminary budget and timeline. This approach is particularly beneficial for projects with predetermined budgets, like lump sum/fixed-price projects. By assigning estimation weights to the Work Breakdown Structure (WBS), resources are proportionally allocated across project activities. This cost loading technique offers a valuable starting point for resource planning.

Bottom-up estimating, on the other hand, takes a more granular approach. Project teams delve deeper into the WBS, meticulously estimating the time and resources required for each individual task. This detailed analysis often replaces the initial top-down estimate as the project progresses and a clearer picture emerges.

Here’s a table summarizing the key differences:

Top-Down Estimating:

  • Quick and Efficient: Provides a high-level overview of project cost and duration in the early stages.
  • Ideal for Lump Sums: Well-suited for projects with predetermined budgets, like fixed-price contracts.
  • Estimation Weights: Allocate resources proportionally across project activities using these assigned weights within the Work Breakdown Structure (WBS).
  • Cost Loading: Offers a starting point for resource planning by visualizing the project’s financial landscape.
  • Less Accurate: May not be as precise as bottom-up estimates due to its high-level nature.

Bottom-Up Estimating:

  • Detailed and Accurate: Provides a more granular breakdown of project costs and durations through individual task analysis.
  • Later Stages Planning: Often replaces the initial top-down estimate as the project progresses and details become clearer.
  • Task-Level Breakdown: Teams delve deeper into the WBS, meticulously estimating the time and resources required for each task.
  • Resource Planning: Creates a more comprehensive plan based on the detailed breakdown of resources needed for each task.
  • Time-Consuming: Requires more effort and time compared to top-down estimating.

Top-Down Estimating vs Bottom-Up Estimating

Professionals working in the field of project management often mix up bottom-up and top-down estimating concepts. Many of them think that they are the same, however, they are different. Unlike top-down estimating, project teamwork at the task level of WBS (Work Breakdown Structure) to perform a bottom-up estimate. In the early phases, top-down estimating is used to predicting the cost or duration of a project. Over time, detailed bottom-up estimates replace the original top-down estimate.

Professionals working in the field of project PDF

Feature Top-Down Estimating Bottom-Up Estimating
Approach High-Level Overview Task-Level Breakdown
Project Phase Early Stages Detailed Planning
Data Source Historical Data, Expertise Individual Task Analysis
Keywords Budget AllocationEstimation WeightsCost Loading Work Breakdown Structure (WBS)Resource Planning
Ideal Projects Lump Sum/Fixed-Price Well-Defined Scope

By strategically combining both top-down and bottom-up estimating techniques in Primavera P6, project managers gain a comprehensive understanding of project scope, resource needs, and potential risks. This empowers them to make informed decisions, optimize resource allocation, and ultimately deliver projects on time and within budget.

1. Streamline Resource Allocation with Top-Down Estimating in Primavera P6

Struggling to allocate your project budget effectively? Primavera P6’s top-down estimating feature can be your saving grace. This powerful tool allows you to distribute your overall budget across your project’s Work Breakdown Structure (WBS), ensuring efficient resource planning from the get-go. By assigning estimation weights to each WBS element and activity, you can quickly determine where the most resources are needed. This cost loading approach provides a clear picture of your project’s financial landscape, empowering you to make informed decisions about resource allocation.

Primavera P6’s top-down estimating is a game-changer for projects with predetermined budgets, particularly lump sum/fixed-price projects. By leveraging estimation weights, you can ensure your budget is allocated proportionally, mitigating the risk of overspending in one area and underspending in another.

2. Conquer Resource Planning with Top-Down Estimating in Primavera P6

High-level resource planning is a critical aspect of any successful project. But how do you ensure your resources are deployed effectively without getting bogged down in the details? Enter Primavera P6’s top-down estimating feature. This innovative tool provides a streamlined approach to resource allocation, allowing you to focus on the bigger picture.

By assigning estimation weights to your project’s Work Breakdown Structure (WBS) elements and activities, you can quickly determine the proportional resource needs for each stage. This cost loading approach offers valuable insights into your project’s resource requirements, enabling you to make informed decisions about budget allocation.

Top-down estimating shines for lump sum/fixed-price projects. With a predetermined budget to stick to, it allows you to directly allocate resources proportionally using estimation weights. This approach helps prevent budget overruns and maximizes project efficiency.

3. Unleash the Power of Estimation Weights in Primavera P6

Estimation weights are the cornerstone of top-down estimating in Primavera P6. These weights act as a guiding light, helping you distribute your project budget effectively across your Work Breakdown Structure (WBS). By assigning a weight to each WBS element and activity, you can define the relative effort required for each stage. This crucial step forms the basis for resource planning and cost loading within your project schedule.

Top-down estimating with estimation weights is a boon for projects with limited upfront information, such as lump sum/fixed-price projects. By leveraging these weights, you can create a high-level resource allocation plan even when detailed breakdowns are unavailable. This empowers you to make informed decisions about budget allocation and ensure your project stays on track.

How do I create a WBS: Creating a Work Breakdown Structure in Excel

Top-Down Estimating in Primavera P6

Estimating is known as the practice of predicting the cost and time required to deliver the project deliverables. Also, since top-down estimating is used when there is little information available for the project, the estimating process is supported by experience from an expert.

There are some techniques used in conjunction with top-down estimating. For example, apportion method is a top-down estimating technique that calculates the cost of individual tasks as a percentage of the total project cost (direct costs and indirect costs).

For a better understanding, let’s review the simple example below.

We have a Block Valve Station project as shown in Figure 1.

A Sample Block Valve Station Project Top Down Estimation
A Sample Block Valve Station Project Figure 1

We will open the Work Breakdown Structure (WBS) window by selecting Project | WBS from the main top drop-down menu, Figure 2.

Project | Wbs
Project | Wbs Figure 2

Now we will add Est Weight and At Completion Total Cost columns as shown in Figure 3.

“Est Weight” And “At Completion Total Cost”
 Figure 3

Est Weight of Construction is 8 (Civil:2, Mechanical: 3.5, Electrical: 3), Testing is 1, Landscaping is 0.5. Total is 9.5 but we will insert 10 Est Weight for the Block Valve Station, Figure 4

Est Weight For The Block Valve Station
Est Weight For The Block Valve Station Figure 4

We will insert 0.5 Est Weight for the Project Management activity from the “Activities” window.

In the “Activities” window, we will add “Est Weight”, Budgeted Labor Units, Budgeted Labor Cost, and Budgeted Total Cost columns, Figure 5.

“Activities” Window
“Activities” Window Figure 5

Now we will distribute the total “Est Weight” of each WBS, to its activities. Also, all our weights should be distributed among deliverables and activities, Figure 6.

“Est Weight” Of Activities Top Down Estimation
“Est Weight” Of Activities Figure 6

We will insert a labor resource and unit price($100/hr) for the resource, Figure 7

Labor Resource
Labor Resource Figure 7

After assign the “LABOR” resource to the activities, we will perform the Top-down estimate. We will select Tools | Top Down Estimation from the main top drop-down menu, Figure 8.

Tools | Top Down Estimation
Tools | Top Down Estimation Figure 8

In the “Top Down Estimation” window, we will select the project WBS for the WBS box. Also, the resource is “LABOR” and we will budget 500 Hour effort for all project. Figure 9.

Top Down Estimation Window
Top-Down Estimation Window

Then, we will select “Apply” and see how our 500-hour effort is distributed among activities and associated deliverables, Figure 10
Oracle Primavera P6 Tutorial Top Down Estimation Figure 10

We can also see the unit and cost distribution at WBS level, Figure 11

Oracle Primavera P6 Top Down Estimating Example
Figure 11

Let’s assume that our budgeted 500-hour effort will increase 20 percent due to the weather conditions. Also, we will calculate the impact of this increase by add 20 % to the “Apply adjustment” box in the “Top Down Estimation” window, Figure 12.
Oracle Primavera P6 Tutorial Figure 12

As shown in Figure 13, budget units and costs are increased 20 percent based on our adjustment.

Top Down Estimating , Top Down Estimation , Bottom Up Estimating , Bottom Up Estimation In Primavera P6 Figure 13

Now we will save this estimate for future references. In the “Top Down Estimation” window, we will click “Save As” and fill the “Estimate Name” box, Figure 14
Top Down Estimating , Top Down Estimation In Primavera P6

Figure 14

We can see the history by clicking the “History” button in the “Top Down Estimation” window.

Summary

Top-Down Estimating: A Quick Start for Project Costs

Also, unlike other methods that require a deep dive into individual tasks, estimates provides a view. What’s even better? Also, you can combine estimates with other techniques like consensus methods (gathering team input) or ratio methods (leveraging historical data from similar projects).

Top-Down Estimating for Project Duration

You can also use estimates to get a rough idea of how long your project will take. Consider it the opposite of estimates, where you break down each task and add up the time for everything.

The Trade-Off: Speed vs. Accuracy

While it’s quick and easy, there’s a trade-off. Also, the estimates might not be as precise as other methods. Inaccurate estimates can lead to conflict and project issues down the road.

Primavera P6 Makes Top-Down Estimating Easy

This project management software estimates. Also, here’s how: Within Primavera P6, you can assign a budget to both activities (specific tasks) and deliverables (project outputs). It even lets you see how changing the budget percentages affects the overall plan. Plus, you can save your estimates for future reference.

In conclusion, this article explained estimates and showed how to use Primavera P6 to make it work for you. Also, project control engineers, take note! Feel free to share your experiences with Primavera P6 (top down estimation in Primavera P6)  and estimates in the comments below.

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