Answer.

Accurate estimation of costs and timelines is one of the key tasks of a business analyst. For this, qualitative and quantitative methods are applied, which should be tailored to the specifics of the project, available resources, and the required accuracy.

Popular methods:

Expert Estimation — gathering opinions from experienced professionals, analyzing historical data from similar projects.
Bottom-Up Approaches — breaking the project down into smaller tasks, estimating each task, and summing them up. Provides good accuracy but requires thorough analysis.
Analogous Estimation — comparing with already implemented projects and calculating based on available statistics.
Delphi Technique — a series of anonymous surveys among a group of experts with subsequent aggregation of opinions to achieve consensus.

Criteria for choosing a method:

Complexity and uniqueness of the task.
Degree of detail in the requirements.
Availability of historical data and experts.

Key features:

There is no universal method for all types of projects.
Iterative adjustment of estimates as requirements become more detailed.
It is important to account for risks and time/budget reserves.

Tricky Questions.

Is it possible to give an accurate estimate of timelines and budget at the start of any project?

No, without clearly detailed requirements, the estimate is always preliminary. Further clarification is necessary as the project evolves and details emerge.

Is expert estimation always more accurate than automatic calculators?

No, automated tools can be extremely accurate with a large volume of historical data, while expert opinions can be subject to biases.

Is it mandatory for a business analyst to be able to perform detailed financial calculations?

It is not essential to master accounting tools, but basic skills in budget preparation, calculating TCO (Total Cost of Ownership), and ROI (Return on Investment) are required for every analyst.

Typical Mistakes and Anti-Patterns

Estimation "off the top of your head" without analyzing analogs and task decomposition.
Ignoring risks or considering only the positive scenario.
Tying timelines to client wishes rather than the actual capabilities of the team.

Real-life Example

Negative Case: A business analyst saved time and formed an estimate of the timeline for developing an IT system based solely on comparison with a past project, ignoring a new integration.

Pros:

Speed.

Cons:

Missed deadlines.
Budget exceeded nearly twice.

Positive Case: For a large retail chain's new warehouse, all tasks were detailed, external experts were hired, and three rounds of estimates were made based on personality, historical data, and a What-If scenario.