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How order of magnitude can provide an early Idea of cost 8 min read
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Cost — it’s probably something you don’t look forward to bringing up with your stakeholders, but it’s a crucial discussion if you want to get your project approved. It can be tough to nail down an accurate estimate of cost, especially in the initial idea phase. To get your project started and acquire the resources you need, you’ll need at least a ballpark figure. That’s where order of magnitude can help.

Keep reading to learn more about order of magnitude, how it can help you calculate an estimated cost range, and how to use to discern the most accurate range possible so your project has a higher chance of being approved.

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What is order of magnitude?

If you’re a bit of a number nerd, you might have come across orders of magnitude before when dealing with large numbers. It’s a way to make larger unknown numbers, like the age of the earth or the size of an atom, easier to comprehend without being exact. It does this by making approximate comparisons between two numbers using an exponential change — usually the power of ten. In project estimates, it’s used slightly differently and is based on other variables.

So what does that have to do with project cost estimations?

In simpler, project management terms, order of magnitude is a rough way to estimate how much a project is likely to cost when you don’t have many specific details to go by. As it provides a wide range rather than a single number, it’s best used right at the start of a project and refined later on.

Order of magnitude differs from definitive estimates, which are another, more accurate way to figure out costs on a project. So why use both and not just a definitive estimate? For that, you require more knowledge and details of the project, so it’s best used later on once the project is underway to tighten up the cost range.

What does the size of the sun compared to the earth have in common with your estimated project cost? They both use order of magnitude to estimate a number without the support of specific details.

What if you were to solely rely on order of magnitude to get your project cost estimate?

“Order of magnitude” is a part of our Project Management Glossary — check out the full list of terms and definitions!

The risks of relying solely on order of magnitude

Order of magnitude provides a range of potential figures, rather than one single number. For this reason, any estimate created using this method could end up being wildly inaccurate. At the start of a project, it’s impossible to arrive at a single figure that will remain accurate throughout, but it’s still important to strive for the most accurate range possible based on the limited information you have at hand.

Another risk lies in the information and historical data you use to come up with your estimated range. For example, you may be referencing costs from a previous project that have since risen substantially, or making incorrect assumptions with respect to the time it takes to complete a task.

While order of magnitude may have its drawbacks, it’s still a popular method for figuring out a ballpark estimate. Here’s how you can use this technique to suit your project.

Calculating order of magnitude during project development

There are several methods for using order of magnitude to work out an estimated cost. The method you choose should be based on:

  • Past data you have at hand
  • The expertise of your team members
  • The time you have available

Historical data

Using data from previous projects, you can create an estimate that’s quick and fairly simple to calculate. You might refer to a project that’s similar to the one you’re estimating, replicating parts that went better than expected and making note of areas that needed improvement.

As mentioned above, this can be a less than accurate method as it assumes all data is roughly the same today as it was in the past, but scope, costs, and processes can change.

Three-point estimation

A three-point estimation takes a realistic estimate, and then assumes best- and worst-case scenario versions of that estimate. Again, this could use historical data and experiences, but rely on general assumptions about the cost and time it takes to complete.

Once you have a good sense of your new project’s estimated cost and timing, here’s how you can work out the order of magnitude to create a cost range:

Examples of ranges set by order of magnitude

The Project Management Body of Knowledge suggests that the ideal range of order of magnitude is between -25% and +75% of the estimated cost you calculated.

Using the figure you calculated previously, create a range of potential costs using a formula that will determine your upper and lower boundaries.

The formulae look like this:

Upper Boundary = Rough Order of Magnitude Estimate x (1 + 75%) = Rough Order of Magnitude Estimate x 1.75;

Lower Boundary = Rough Order of Magnitude Estimate x (1 – 25%) = Rough Order of Magnitude Estimate x 0.75.

With this new order of magnitude estimated range, you can compile your project details with an estimated cost that gives a realistic idea of how much it will cost to bring your project to fruition. How do you integrate these initial costs into your project management platform?’s Work OS makes it easy by enabling you to create, track, and manage your project.

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Determining order of magnitude with

Every project estimate requires solid data as a foundation, and’s Work OS provides a central platform for past and current project data. View project details such as timelines, costs, and notes from collaborators to work out what to replicate in your new project, and what to leave behind. integrates with your favorite tools, so tasks like tracking billable hours within your project team are automated, which you can use in your estimates of time and cost.

When you’ve figured out your order of magnitude, add your rough estimated costs into the project details using the Single Project Template. From there, create milestones and track changes in real time.

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Frequently asked questions

What does order of magnitude mean?

In math, an order of magnitude is a simple way of relating large numbers to small numbers using scientific notation. In project management, when there isn’t much project information available, we use the same idea to create estimates of potential project costs using a range.

How do you find order of magnitude?

To determine order of magnitude for your project, start off by figuring out a rough estimate of cost using a mixture of historical data and assumptions. From there, you can use a simple formula to find out the lower and upper boundaries of the estimation. In simple terms, multiply your rough estimation by 0.75 for the lower end, and 1.75 for the higher end. That’s your range.

What are three orders of magnitude?

Things are going to get mathematical here! In simple terms, an order of magnitude is an exponential change from one number to the next, usually multiplying the number by 10. So, if one order of magnitude is 10, two orders of magnitude would be 100, and three orders of magnitude would be 1,000. You don’t have to worry about powers of ten too much when creating your project estimate, however.

Using order of magnitude to calculate a realistic project cost estimation with

Although order of magnitude in math and project management seem worlds apart, they share a common purpose: to help you understand a rough estimate of numbers that aren’t known for certain. A rough order of magnitude enables you to kick-start your project by giving stakeholders a realistic range of costs so that they can decide whether to approve it. provides an intuitive platform where you can access historical and current project data, as well as tool integrations, and track your new project from inception to completion — without guesswork.

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