Glossary
Bottom-up Planning
bottom-up estimating, bottom-up estimation, bottom-up approach, bottom-up management
Bottom-up planning (also bottom-up estimating) determines the effort, cost and duration of a project from the bottom up: you estimate every work package individually and add the values up to the phase and to the whole project. Because the estimate comes from the people who will do the work, it is more accurate than a target set from above. It does, however, require a complete work breakdown structure.
The counterpart is top-down planning, where the project manager sets an overall budget and splits it across phases and packages. In practice, the two often run one after the other: a rough target from above first, then a bottom-up estimate as a cross-check.
How does bottom-up estimating work?
- Build the work breakdown structure. Break the project down in the work breakdown structure to the level of work packages.
- Have each package estimated. The person who will deliver the package estimates the effort in hours or days. Where uncertainty is high, a PERT estimate with three values helps.
- Roll up. Add the packages up to the phase and the phases up to the project.
- Add allowances at project level. Add project management, coordination and a risk reserve once at the top, not inside every package.
- Compare with the target. If the total exceeds budget or deadline, renegotiate scope, schedule or budget.
Example: bottom-up estimate for a website relaunch
The team estimates every work package from the work breakdown structure individually (example values):
| Phase | Work package | Effort |
|---|---|---|
| Concept | Requirements analysis | 24 h |
| Concept | Sitemap and wireframes | 32 h |
| Design | Design draft | 40 h |
| Design | Review with the client | 8 h |
| Build | Develop templates | 80 h |
| Build | Migrate content | 40 h |
| Build | Testing and bug fixing | 24 h |
The totals build up from below: concept 56 h, design 48 h, build 144 h, project 248 h. With a 10 % risk allowance, the team plans 273 hours. At an hourly rate of 95 euros, the relaunch costs about 25,900 euros. If management had approved 20,000 euros top-down, the cross-check reveals a gap of almost 6,000 euros before anyone has worked a single hour.
Bottom-up vs. top-down: which approach when?
| Criterion | Bottom-up | Top-down |
|---|---|---|
| Direction | work packages → project | project → work packages |
| Prerequisite | complete work breakdown structure | goal, budget, past experience |
| Accuracy | high | rough |
| Estimating effort | high | low |
| Typical timing | detailed planning after approval | project idea, proposal, business case |
| Typical mistake | total blows the budget | target ignores the detailed effort |
Combine both: the top-down target sets the frame, the bottom-up estimate tests it.
Common mistakes in bottom-up estimating
- Gaps in the work breakdown structure: A forgotten work package is missing from the total as well. Check that the packages together cover the entire project scope.
- Hidden padding: If everyone adds a little to their own package, the total inflates. Keep reserves central and visible.
- Coordination left out: Project management, meetings and acceptance belong in packages of their own.
- Work confused with duration: 40 hours of work take two weeks for someone working half days, not one.
Bottom-up as a management style
Outside of planning, bottom-up describes a management approach: employees contribute ideas, goals and proposed solutions, and leadership takes them up and decides together with them. This increases participation and draws on the team's expertise, but it needs a clear framework and trust from leadership. Read more about this aspect under leadership styles.
How do you plan bottom-up in Merlin Project?
In Merlin Project, you build the plan up from the activities:
- Create the structure: Create phases as activities and add work packages below them with Insert › Child (Alt+Cmd+G). Ctrl+Cmd+→ indents an existing activity under the one above it.
- Enter effort per activity: In the Inspector on the Plan tab, enter the value in the Work field, for example
24h. A question mark, as in3d?, marks the value as an estimate. - Check the totals: Groups calculate their duration and time span automatically from the activities they contain. Merlin Project calculates work costs from the work and the standard rate of the assigned resources.
- Hold it against the budget: Select a group or the project and open the Finance tab in the Inspector, then the Balance tab. There Merlin Project subtracts the base costs and work costs of the item and its child activities from the approved budget; a negative balance shows the overrun.
