Advancing Estimate Reliability with Readiness Levels

Problem

Large projects and programmes face a common problem when progressing from feasibility into delivery: producing cost estimates and risk analyses that are trusted enough to support major investment decisions. Teams spend months—sometimes years—developing a suite of models and technical artifacts to feed into business cases. Yet despite the time and effort, most assessments still rely on maturity checklists and subjective RAG ratings.

These methods only indicate whether documents are complete, not whether they are reliable under real-world delivery conditions. The result is a false sense of confidence, with no assurance that they will stand up to the scrutiny of sanctioning bodies or the realities of risk and uncertainty during programme delivery.

Challenge

This leaves programme and projects exposed to several risks:

1. False confidence in estimates – Maturity checklists implied readiness, but provided no view on reliability or resilience under uncertainty.

2. Inefficient use of effort – Significant time was invested in producing technical artifacts that could still fall short under scrutiny.

3. Limited value in peer review – Without structured readiness assessment, reviews became subjective, inconsistent, and difficult to repeat.

4. Risk misalignment – Quantitative Risk Analysis could be disconnected from the actual preparedness of the estimated Work Packages, limiting the ability to measure contingency appropriately or allocate risk to contracts effectively.

Solution

To address this, Kaleido developed a Readiness framework—a structured system for assessing the preparedness of estimates and related artifacts. Unlike traditional maturity-based approaches, Cost Readiness Levels (CRL’s) evaluate whether outputs are fit for purpose in real-world delivery, aligning with risk analysis and sanction requirements.

The framework has been shared and tested internationally:

• Presented at AACE ConEx (2025) in Los Angeles to global project professionals.

• Delivered as a hands-on workshop at the CaSA Conference (2025), where participants completed readiness assessments on a hypothetical megaproject through progressively more complex exercises. Both estimators and non-estimators were able to apply the framework successfully and—crucially—converge on the same results, demonstrating that CRLs are scalable, quick to apply, and capable of providing consistent insight into project readiness.

• Supported by peer-reviewed technical papers submitted to AACE.

• Currently in development as a recommended practice, enabling industry-wide adoption as a recognised approach to readiness.

By applying Cost Readiness Levels, programmes can:

• Correlate readiness with evolving risk exposure.

• Identify misalignments between Qualitative and Quantitative Risk Analysis.

• Improve the link between contingency sizing and contract risk allocation.

• Focus effort on low-readiness areas to improve assurance efficiently, and provide projects with targeted improvements that would yield the most impact.