This article:
What is a ROM estimation used for?
How do you represent a ROM estimation?
When can you use a ROM estimation?
Why would you use a vague estimate?
What projects can you use a ROM estimate for?
How do you calculate a ROM?
What is a typical Rough Order of Magnitude?
Example of ROM
When should the ROM estimate be revised?
ROM estimate vs Definitive estimate
FAQHow does PMI define ROM estimations?
How do you define ROM
What is the purpose of a ROM estimation in project management?

What is a ROM estimation used for?
To give you an idea of the potential project costs, a rough order of magnitude estimation is used.
You should be able provide a final estimate. This should be done with a lot of input from subject matter specialists and lots of research on past projects as well as their budgets.
In reality, however, we don’t have the luxury or time to provide this level of estimate at the very beginning of a project.
Executives often just want to know how much the work will cost. We have not yet been given the authority to dive deeper into the scope and requirements that would allow for more accurate budget forecasting.
The ROM estimate is intended to be used as an informational tool at the beginning of a project. It’s not something you should keep around for too long. It’s important to have a better understanding of the project’s costs as soon as possible.
How do you represent a ROM estimation?
Managers should present budgets as a range. Single-point estimates can trap you into a fixed mindset that doesn’t allow for any change.
The ROM estimates are the same, except that the range is large. Budget figures are presented according to the accuracy level you have at the moment. They are therefore shared as a +/-% number.
The range can be used to indicate the level of confidence or accuracy of the number.
When can you use a ROM estimation?
For those times when you don’t have much clarity about your project budget, you can use the rough order of magnitude to estimate.
It is used to estimate the cost of the work in the initial stages. It adds a lot of variance so if you don’t have all of the details (which is… always before your planning), the ROM figure will give a rough estimate based on best guesses with lots of hedging.
Are you unsure if ROM is right to use for your project? Our Project Estimating Guide contains all the information you need to estimate.
Why would you use a vague estimate?
Because more information is better than nothing! The human brain is used for dealing with vague values, regardless of whether you use T-shirt sizes (XS, M, L), XL, or XXL).
An estimate gives a rough idea of the size and relative importance of a project in relation to other projects in the portfolio. While a cost of PS1m may seem small to some firms, it could be significant for others. Having an early overview of the costs can help people make decisions about their next steps.
What projects can use a ROM estimation?
A ROM estimate can be used for any type of project. They are useful for:
Larger projects will require you to provide management information before you can give a more precise estimate.
International projects may require you to include currency conversion and costs from different countries.
Innovative projects are those where the deliverable is innovative and pioneering and the exact scope of the project is being progressively developed or managed using agile techniques.
Larger budgets are better for projects because you can estimate smaller amounts more easily than large numbers.
Projects that have historical information. NASA’s cost estimation handbook version 4.0 discusses analogy cost estimation as an application.