Rough Order Of Magnitude

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Home Project Management Estimating Cost, Time & Schedule What Is the Rough Order of Magnitude (ROM) and How Is It Calculated?
Illustration of the use of ROM and definitive estimate in different project phases for cost estimating purposes.
Comparison of the accuracy ranges of rough order of magnitude (ROM) and definitive estimate.
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During the project initiation phase (or when you are preparing for a project management exam) you will likely come across the term rough order of magnitude (ROM). The PMI’s Project Management Body of Knowledge refers to the rough order of magnitude as an initial estimate in the “estimate cost” process (source: PMBOK®, 6 th edition, part 1, ch. 7.2). As the book does not elaborate on the details of the ROM, you might be wondering how it is defined and determined – especially as it is relevant for the PMP exam. The short answer is:
Rough order of magnitude (ROM) refers to
an initial estimate of the cost of a project or parts of a project. It has an expected
accuracy of -25% to +75% according to the PMBOK (other sources suggest -50% to
+50%). In other words, the actual costs of a project are typically expected to
be between 75% and 175% (or 50% to 150%) of the ROM estimate. While the calculation is straightforward, the main challenge is rather how to determine
the estimate during the initiation phase of a project.
Read on to learn more details and background.
If you wish to calculate the ROM range for an initial estimate, use this free ROM calculator .
The rough order of magnitude (ROM) is a type of cost estimate that is used in various kinds of projects. These include but are not limited to strategy development and implementation projects, IT projects as well as construction projects. It is typically used in the preparation and initiation phases of projects for the development of a project business case , for instance, or for the determination of the required financial resources that are stated in the project charter.
The purpose of a ROM estimate in project
management is to provide stakeholders and decisionmakers with a rough idea of
the project cost’s order of magnitude, e.g. whether an endeavor will require $1
million or $10 million ( source ).
The accuracy of ROM estimates is -25% to +75% according to the PMBOK (source: PMBOK®, 6 th edition, part 1, ch. 7.2). Other authors set the range at +/-50% which can be used as an alternative in practice if the estimate is deemed conservative.
Note: If you are learning formulas for a
PMI exam you should stick to the PMBOK and memorize the accuracy range of
-25%/+75%.
To narrow this wide range of possible outcomes down, this rough cost estimate is expected to be refined in the course of the project as more information and better estimates can be obtained over time (similar to the concept of progressive elaboration ).
It shall then be replaced with a so-called
definitive estimate that is much more accurate (see below section on the
differences between both estimates).
The calculation of the rough order of
magnitude range is relatively straight forward. The formulas for the
calculation of the upper and lower boundaries are as follows:
Upper Boundary = ROM_Estimate x (1 + 75%) = ROM_Estimate x 1.75;
Lower Boundary = ROM_Estimate x (1 – 25%) = ROM_Estimate x 0.75.
In practice, the more challenging part is usually to come up with the ROM estimate (i.e. the basis for the ROM range) rather than calculating the boundaries of that range. It can be determined using established estimation techniques such as analogous or parametric estimates.
As the ROM is typically used for projects in
the initiation phase with a high level of ambiguity and uncertainty with
respect to the expected cost, the required input data for these techniques may
not be available though. The same holds true for the option to involve subject
matter experts: they might not be assigned or available for bottom-up
estimating at the time of a project’s initiation.
The initial estimate is therefore often based on high-level expert judgment, sometimes in conjunction with three-point estimating .
There are three key differences between the
ROM and the definitive estimate:
While the ROM comes with an accuracy of
-25% to +75%, the definitive estimate is much more accurate. According to the
PMBOK®, it has a range of -5% to +10%.
This is because the rough order of magnitude is typically determined in the initiation phase of projects (or parts of projects) when information that is required for proper estimating tends to be vague. Resources, as well as data, may also be limited. The definitive estimate, on the other hand, is calculated in subsequent project phases when these constraints are broadly resolved.
Thus, the definitive estimate can be computed using more accurate estimation techniques, such as bottom-up estimation or parametric estimates. Both may not be available at the time the ROM estimate is determined.
The rough order of magnitude estimate is a
rather inaccurate type of project cost estimate. However, it is typically used
in the initiation phase of a project when the available information and
resources do not suffice to produce better estimates.
In this situation, the ROM provides at
least a rough idea of the cost range of projects which is often useful for the
purpose of stakeholder communication in an early stage. The ROM estimate can also be used to develop a project business case or
a project charter, for instance.
If you wish to learn more about cost and time estimating, read our guide to estimating costs take a look at our other articles on this topic .


Customers frequently need estimates of what their new communications service requirements are going to cost. Sometimes a very general, rough order of magnitude number may satisfy this need. At other times, the need may be for a fairly accurate estimate of all the costs associated with a set of requirements. CSO shall provide ROM costs and Cost Estimates upon request.

The distinctions between a ROM Cost and a Cost Estimates are described in the following paragraphs:

Rough order of Magnitude (ROM) Cost

A ROM Cost is a general approximation of the cost of providing a stated service. It is based on experience, costs of similar services, or on a cursory examination of other vendor’s rates. A ROM Cost is usually provided to a Customer who is seeking general information. ROM Costs do not include engineering analysis, references to configuration databases, or the development of alternative solutions to generally stated communications requirements. ROM Cost information can normally be provided within 5 working days.

A Detailed Cost Estimate provides a more detailed and comprehensive response than a ROM Cost does. Detailed Cost Estimates are based on the costs associated with a specific solution to a generally stated requirement. Detailed Cost Estimates generally result in dollar figures that include all known cost elements, i.e., labor, additional equipment, overhead, carrier recurring and non-recurring costs, travel (if required), etc. Given the variability of the factors associated with developing Detailed Cost Estimates, CSO cannot set a general standard that would be applicable to all requests. Often, detailed information is required from sources outside CSO and may only be gained by the issuance of a formal Request for Information (RFI) to industry. However, CSO shall provide the requester with status information and with such cost information (e.g., for those elements of the solution, which have been priced) within 15 working days of receipt of a Request for a Detailed Cost Estimate.

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