Project estimation is not easy, but it can make or break the project. Calculate the cost and time frame properly. Here’s how you can avoid budget overruns and disappointed clients.
Software development project estimation is the calculation of the cost and the time that its completion will take. This practice helps the client determine the feasibility of the whole process. It helps to prevent overruns and establishes the scope of the work. It ultimately aids clients with their decision of whether or not to commit to their idea.
A McKinsey report states that 66% of all software development projects have overruns. There can be many factors for that but it is clear that it is a crucial part of the job. The obvious benefit of utilizing this practice is avoiding late deliveries and going over the budget. Using only past experiences may be counterproductive.
Estimation also helps project managers plan future products. It provides experience for empirical assessment later down the line. If you miscalculated an estimate once, the next will be more solid. In this way, it provides the means for testing various models.
Project cost estimation has two established methods:
The former provides the whole estimate upfront and is geared to Waterfall-type development. The latter is more suitable for Agile methodologies. It gives the client separate forecasts for every step of development and is more flexible. While different in many respects, the core evaluation process consists of four main objectives:
But this is just the basic framework. The practice is customizable. There are many approaches you can borrow from including:
The availability of different methods indicates that there is no one-size-fits-all solution. Making a perfect forecast that covers all of the possible issues is extremely challenging. Software development is a fluid process and the programmers often learn new technologies and make new discoveries while working. This often impacts the estimate.
Another common problem is the so-called Parkinson’s law. It states that “work expands so as to fill the time available for its completion”. This means that too much time can be just as counterproductive as not enough of it. People start stretching tasks out, which affects productivity.
That same can also be said about teams that have more people than they need. This creates too many communication links and information can get lost. Also, if the developers are working on several projects at the same time it can be taxing on their abilities. Allocate some extra hours, if that is the case.
While we have talked about how estimating works in software development, it is a widely used practice in other industries as well. Let’s take construction as an example.
Construction requires large amounts of planning so cost evaluation is crucial. This evaluation has two categories. The first one covers the construction process itself, equipment, labor, and materials. The second includes maintenance, utilities, land rent, and other recurring payments. It also has to be flexible. There are contingencies that have to be accounted for, such as environmental changes, labor cost fluctuations, and much more.
The industries may be different, but the core process is quite similar. Nobody wants overruns, and everybody actively tries to eliminate them through accurate planning and project cost estimation.
There are a number of software solutions used for estimation. While they won’t do the entire work for you, they will make it easier:
Software development project estimation is often laborious and time-consuming. If done poorly, it may result in a client’s disappointment. However, if it is done right, it becomes a framework for the evaluation of future products. Regardless of how you approach this practice, there are plenty of tips and tools that make it easier.