ROM Rough order of magnitude

March 6, 2015
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ROM Estimate vs Definitive EstimateDepending on the organizational structure in which you’re managing projects and the type of project you are working on, you may use different approaches to estimating. Two common estimating types are ROM estimates and definitive estimates.

Rough Order of Magnitude (ROM) Estimate

A rough order of magnitude (ROM) estimate is the least accurate estimate. The PMBOK Guide 4th Edition gives the guidlines that ROMs are -50% to +50% accurate, the PMBOK Guide 5th Edition gives the guidelines that ROMs are -25% to +75% accurate, or potentially even larger. It should be noted that stated percentages are not the main takeaway are not likely specifically tested on; it is more the concept and idea that ROMs are a rough estimate, are used early in the project when info is limited, and are hence the least accurate.

Definitive Estimate

In project management, a definitive estimate is as good as it gets! There is always the possibility of some variance from the estimate, but definitive estimates are -5% to +10% accurate.

A definitive estimate is based on detailed information from each work package within the WBS or estimates completed at the activity level.

Example

Prior to any significant analysis, we developed a ROM that the project would cost $1.5M. However, as we developed the WBS and were able to put cost estimates to each work package, the definitive estimate was $1.375M.

Summary

ROM estimates are used very early in the project when there is a lack of detailed information. Definitive estimates occur when there are accurate estimates at the work package or activity level.

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