Ins & Outs of Estimating Software Projects

What Is Software Development Estimation?

The success of any software development project heavily depends on accurate assessment. Estimating such a project is challenging because it requires understanding all stages, prior experience with similar tasks, and familiarity with relevant tools.

Each company may approach project estimation differently, so we want to explain how we do it at Integra Sources. When a client comes to us with an idea for a software product, they typically want to know the expected time and cost of development.

Initially, we provide a rough estimate that gives the client a general idea of the timeline and cost. While this might not be exact, it helps set expectations early on.

Afterward, our specialists dive deeper into the details, creating a comprehensive table that outlines the minimum and maximum estimated hours for each phase of the project.

The estimate always includes a range of minimum and maximum hours. This range can be narrow for routine projects or wider for complex ones.

The minimum hours represent an ideal scenario where everything goes smoothly, which rarely happens in real life. The maximum hours account for unexpected delays, bug fixes, and other unforeseen challenges.

In addition to time and cost, clients often ask about the software tools that will be used, such as programming languages, libraries, and frameworks. Some estimates also include a portfolio of previous apps developed by the team, along with screenshots to showcase their UI/UX design skills.

Team size may also be included if the client has tight deadlines or wants the project completed quickly.

Software project estimation depends on many factors. Here are some of the most important ones:

• Project Specification

To make accurate estimates, the team must fully understand the project's goals and scope. The more detailed the client’s requirements, the more precise the estimate will be.

Clients can either prepare the requirement document themselves or entrust it to the outsourcing team. For certain types of projects, like medical software or electronics development, the client may need to conduct a discovery phase, including a proof-of-concept, UI/UX design, and other elements.

• Project Size and Complexity

Larger and more complex projects are harder to estimate accurately. In such cases, the entire development team may be involved in the estimation process.

• Experience with Similar Projects

Estimating a standard project, like Windows drivers, is usually straightforward. However, when dealing with something entirely new, the team may face more uncertainty and require more time to evaluate.

• Team Skills

If developers are well-versed in the necessary tools, they can better estimate the time required for each task and anticipate potential issues.

What Does a Project Estimate Consist Of?

Project hours can be divided into two main categories: development hours and additional activity hours.

• Development hours
• Additional activity hours

For software development, this includes tasks like application design, interface layout, database creation, frontend/backend development, etc. For hardware, it may involve schematic design, PCB assembly, embedded software, and more.

Development time also includes logistics, such as waiting for components to arrive. Delays and parallel processes are clearly visible on a Gantt chart, which is essential for IT project estimation.

Additional hours cover testing, debugging, documentation, project management, communication, and handover. These can take up half the project time or more, depending on the size.

Testing for hardware projects may require special labs, increasing the time needed. Pre-certification activities can also be part of the budget.

When developing an electronic device and its embedded software, we first estimate the hardware, as the software depends on the chosen components. If the project involves a mobile app, both parts can be estimated in parallel.

Keep in mind that changes in component selection can significantly affect development time.

Estimation Techniques

There are several effective methods for estimating software projects, including time, cost, and scope.

Analogous estimating compares the effort of a current project to similar past projects. It is useful for standard tasks where experts are confident in every step.

Top-down estimating is based on expert opinions and is a form of analogous estimating.

Bottom-up estimating involves calculating the time and cost for each individual task. This method is suitable for non-standard projects where there is no prior experience.

Three-point estimating uses optimistic, pessimistic, and most likely scenarios to get a more accurate estimate. Two formulas are commonly used: triangular distribution and PERT (Beta distribution).

The Wideband Delphi method involves peer assessments and multiple rounds of anonymous evaluations to reach the most accurate estimate.

Agile methodologies often use flexible techniques like T-shirt sizing and Planning Poker to estimate tasks without relying on specific deadlines.

Combining different methods can improve accuracy. For example, Planning Poker can be used early in the project, while Three-point Estimating can be applied later when more information is available.

Techniques Our Experts Use

At Integra Sources, we use holistic approaches to estimate software projects. We start by looking at similar past projects and consider expert input. We also use the Three-point Estimating technique to get detailed time and cost estimates.

For complex projects, we break them down into smaller tasks and estimate each one carefully. We occasionally use Scrum techniques like T-shirt sizing and Planning Poker to help optimize the development process.

Who Makes Software Project Budgeting?

The project manager is responsible for overall planning. They add the necessary hours for additional activities to the estimate. Depending on the methodology, different specialists may handle the development hours.

At Integra Sources, technical leads and developers evaluate the project. The CTO then reviews the final estimate before sending it to the client.

Software Project Estimate Issues

Estimation difficulty varies depending on the project. Large, complex, and unique projects are harder to estimate and more prone to errors.

Poor estimates are a common cause of project failure. Underestimating can lead to delays, budget overruns, and poor quality. Overestimating, on the other hand, can scare off clients who want faster and cheaper solutions.

We’ve learned from past mistakes. One project was initially underestimated, but after further analysis, the estimate had to be increased significantly. Unfortunately, the client couldn’t afford it and decided to stop the project.

This taught us the importance of thorough pre-project planning and clear communication with the client.

Why Might the Estimate Change?

Estimates can change for various reasons:

• Misunderstanding the client’s requirements.

This often happens due to unclear or missing documentation.

• Tasks taking longer than planned.

Some tasks may be more complex than expected, especially in specialized areas like medical software.

• Client requesting changes or adding features.

Even small changes can significantly increase development time.

Conclusion

Accurately estimating software development time and cost is not easy. There are many factors to consider, including unexpected events, logistical delays, and complex tasks.

Incorrect project evaluation can lead to loss of the project and the client. That’s why precise estimation of time and effort is crucial.

With diverse experience and expertise in various estimation methods, our team can help achieve accurate budgeting. Share your ideas with us, and we’ll give you a clear estimate of how long it will take and how much it will cost to bring them to life.