How to estimate software development projects
How to estimate software development projects

Sep 22, 2021

How to estimate software development projects

Software development projects are highly demanded. The problem is that, although the scope of software development tends to change, the time and cost of the project are not as flexible.

To avoid this, there is a process for estimating software development projects. This means 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.

Why Do We Need Project Estimation?

The 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. If you miscalculated an estimate once, the next will be more solid. In this way, it provides the means for testing various models.
Now that we clarify key points, we will discuss how to estimate a software project.

Project cost estimation has two established methods:

  1. Fixed-price
  2. Time and materials

The former provides the whole estimate upfront. 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:

  • Evaluate the scope of work
  • Determine its complexity
  • Divide it into smaller manageable tasks
  • Estimate each of them independently

The project management model you use impacts effort and productivity. Most software development projects implement the Agile methodology. But, there are many Agile-oriented approaches: Scrum, Kanban, Lean, etc. So, your first step should be analyzing which method is best suited to the what, who, when, and where of the particular project:

  • What are the project’s scope and budget?
  • Who will be on the development team?
  • Is the development team outsourced, remote, or a hybrid of both?
  • Which methodologies have been used successfully in the past in terms of scope, time, and cost?

Maybe you will be interested to read: How to Start a Successful IT Project

Also, there are several software solutions used for estimation. While they won’t do the entire work for you, they will make it easier.

  • GitLab, Jira, and other Agile task management services can be used for this purpose. Time tracking functionality can record the man-hours spent on each task. This gives you a reference for the future.
  • Redmine with a cost estimation add-on provides easy calculations. It allows you to assign an hourly rate for each task and displays the final sum.
  • EcoSys can track changes and correlate man-hours with cost. It provides a complete estimate in a comprehensive table.
  • Google Sheets and MS Excel are also widely used. They have calculation features and are more familiar to users.

Wrapping up

Estimating software development projects demands hard work and dedication. If it is done wrong, it may result in disappointment for the client. However, if done right, it becomes a useful guide for future products.

Want to know about us? At Clarika, we help companies grow by improving processes and creating next-level solutions through technology. We listen and understand what the client wants to start the staffing process. For us, it’s very important to get to know the technical requirements, and also the culture and values of our client.

Get your proposal, customized specifically for your business needs. Contact us.


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