Key Techniques for Successful Project Estimation
As anyone who has dealt with or even worked on a project would tell you, starting off a new project can prove to be quite a tricky endeavor — one that is not only rife with potential, opportunities, challenges, and uncertainties in equal measure. In project management, the success of any undertaking is quite dependent on the team’s ability to foresee, plan, and estimate every possible intricacy that they may come across on their journey to project fulfillment. This is why and where the importance of project estimation, especially the accurate kinds, comes in, serving as a guiding light to teams, helping them navigate the choppy waters of project execution.
But do not lose hope, for there exist plenty of best practices and techniques that can help you accurately evaluate and determine project timelines, the resources you will need, and of course the challenges you may face as well as their solutions. And that is exactly what I will discuss in this blog, i.e. proven strategies and techniques for successful project estimation. Let’s go.
What Makes Project Estimation So Crucial?
To those uninitiated to the world of project management, estimation might sound like an unimportant detail. This couldn’t be further away from the truth because estimation is pretty much one of the foundational elements of successful projects. This is because project estimation plays a key role in the success and efficiency of any undertaking, serving as the beacon that guides a project from conception to completion.
Project Estimation: Key Elements
● Tasks that need to be done
● Resources required
● Costs/Rates
● Duration of production (in hours or days)
● List of third party services required for successful completion of project
Successful Project Estimation: Strategies and Techniques to Keep in Mind
● Top-down estimation: In this approach, at first the project is looked upon as a whole, and, then, estimates are gleaned from overarching factors. What this means is basically teams use high-level data and judgment of experts to arrive at an estimate for overall project timelines, resources, as well as costs. Among the more popular software project estimation techniques, this method is usually in the very early stages of project planning, i.e. when detailed information is limited.
● Bottom-up estimation: This one is a more granular, i.e. detailed, approach, wherein the project is broken down into various smaller tasks and then the effort and time required for each task is estimated. The individual estimates are then aggregated to find the overall project estimate. While this technique is highly accurate and transparent, it can prove to be quite time-consuming as well.
● Estimation via analogy: This project estimation technique involves drawing parallels between the current project and similar past projects. This means data from similar projects executed in the past as used to predict timelines, resources, and challenges for the project at hand. Analogous estimation is fast and simple but also less effective — especially for unique projects.
Challenges in Estimating Costs for Software Development Projects
The process of project estimation in software development is accompanied by various challenges, some of the prominent ones being:
● Uncertainty: Dealing with uncertainty poses a significant challenge at the beginning of a software development project. Clients may not have a clear understanding of their requirements, making it difficult to estimate costs and time when criteria are not fully defined.
● Complex Projects: Estimators often overlook the need to break down projects into smaller, more manageable tasks after receiving a comprehensive list of client requirements. This oversight can lead to budget overruns and increased administrative work in the future.
● Idealistic Estimation: Software development project cost estimates are often based on ideal conditions. In reality, projects are susceptible to change requests, version maintenance, resource shortages, and other variables that contribute to the actual cost being different from the initial estimate.
● Estimators: The responsibility of estimation should lie with a software engineer or involve their input for accurate cost calculations. Failure to consult a software developer can result in unforeseen estimation errors.
● Buffer, Dependencies and More: Estimating the project buffer is challenging, and predictions may not be reliable. The project’s success is dependent on both internal and external factors, and maintaining a buffer of 15–20% throughout the project’s execution is recommended. Consideration should be given to the team’s experience, skill sets, and the project’s complexity.
Solutions to Overcome Cost Estimation Challenges in Software Development Projects
● Question and Answer Sessions: Before initiating the cost estimation process, project managers should conduct meetings with clients to engage in question and answer sessions. This helps in defining a comprehensive list of requirements, guiding the team on technical, non-functional, and functional aspects.
● Dividing Larger Tasks: Project managers play a crucial role in breaking down large tasks into smaller, more manageable assignments. Developing a work breakdown structure and creating a list of individual tasks help determine appropriate budgets for each component.
● Involving Developers: In the cost estimation process, it is essential to have developers directly involved or seek their input. Considering various time frames instead of settling on a specific timeline can lead to more accurate estimations.
● Realistic Buffer Consideration: Acknowledging the real-world complexities requires a thoughtful consideration of the buffer. Properly accounting for dependencies ensures the creation of a valid buffer that reflects the project’s true needs.
Final Words
The above-listed software project estimation techniques are an effective way to deal with these challenges, then, would be to make use of project management and estimation software. However, one must still not put all their eggs in one basket, i.e. trust just one estimate. A good practice is to gather three different estimates by using software costing models. And remember that the best way to ensure you have a proper estimation is to mix and match, i.e. use various project estimation techniques to arrive at one estimate.
