The so called “Rough Order Magnitude Estimate or ROM” is a short form of analogous estimating and is used during the initiating process to provide a sense and understanding of the order of magnitude. This type of estimate is commonly used in budgeting exercises for early project feasibility efforts and is heavily dependent historical summarized units such as hours/ lineal meter of conveyor, hours/ pipe diameter inch, hours/ ton of structural steel etc. Quantities are usually derived from early conceptual information and are subject to large variations based on the preliminary information received.
A project during its initial phase may have a rough order magnitude (ROM) estimate in the range of -25% to +75%. Later in the project when more information is known, definite estimates could narrow the range of accuracy of -5% to +10%. Usually this happens after combining other estimating techniques such as analogous estimating and parametric estimating.
When should I use rough order magnitude?
The rough order magnitude is an initial guess of the likely cost.
Usually in project management rough order of magnitude estimating is used to make pass or fail decisions during the initial phase of a project. During the estimating phase the project team may evaluate different scenarios for the execution of an activity. The associated cost can vary significantly depending of different execution methods. Rough order magnitude can be used as an initial approach to determine feasibility of each method from a “most likely” cost perspective.
