Whether you’re a Project Manager or any other interested party in the project (aka Stakeholder) you MUST understand the difference between an Estimate and a Guesstimate.
On the surface they both look the same as, in a project context, they would normally be represented using some quantitative measures assigned to time or cost variables.
Where they differ is their respective dependency on prior actual observation.
An estimate is a quantitative approximation based on previously observed data. The more relevant the data is, the higher will be the expectation that the approximation will be close to the true outcome (and the lower would be the uncertainty associated with this approximation).
A guesstimate is a quantitative approximation NOT based on previously observed data – and is rather based on gut-feel and a guess. Naturally this will attract a higher level of uncertainty.
Knowing the basis for your project’s cost and schedule approximation is crucially important and should be clearly communicated to all relevant stakeholders.
Think about it!