Where cost drivers come from
- Size, capacity, throughput or number of users
- Complexity, interfaces and customization
- Labour hours, productivity and wage rates
- Schedule duration, phasing and working conditions
- Quality, reliability, security or regulatory requirements
- Location, logistics and supplier concentration
- Technology maturity and reuse
Use sensitivity analysis
Change one assumption at a time across a plausible range and observe the effect on total cost. A tornado chart or ranked table makes the dominant variables visible. Scenario analysis can test combinations that move together.
Separate correlation from causation
A historical variable may track cost without causing it. Parametric relationships should have a logical basis, sufficient data and a defined range of applicability.
Assign ownership
Each major driver should have a source, review date and person responsible for updating it. Unowned assumptions tend to remain unchanged after the project reality moves on.