How to Estimate Software Development Time in a Right Way

How to Estimate Software Development Time in a Right Way

17 May 2023 • 19 min read

As software systems become more complex, their development life cycles become more complicated. In addition, they often increase in size, making it difficult to estimate software development time.

The ability of an accurate software development estimation of time and delivery is proportional to its size. In other words, the larger the job, the more unreliable the calculation. After all, smaller tasks within larger tasks often necessitate estimates and subsequent progress monitoring.

As a result, engineers are finding it increasingly difficult to provide reliable software project estimations on deadlines and completions. This is unfortunate because 60% of a project’s success depends on the development team meeting its cost and time estimates. However, all hope is not lost because calculation methods can be used to provide more precise deadlines.

In this article, we will look at why getting accurate estimates is so difficult, why engineers struggle with estimating, what techniques & methods are available, and how to estimate software development correctly.

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Why Software Estimation is Important

Software development estimation is a pivotal process in any software project. It's a meticulous procedure that predicts the cost, time, and resources necessary for a specific project. This foresight isn't merely a numeric value or a deadline; it's a comprehensive blueprint that guides strategic project planning. The capability to precisely estimate time for software development and other project elements is a crucial asset for effective project management, and here's why.

Primarily, software development estimation provides clarity and establishes expectations. It offers stakeholders a lucid understanding of the project's scope and what's achievable within the allocated budget and timeline. It helps set the project's parameters, which consequently assists in preventing scope creep or deviations from the initial plan.

Secondly, software development estimation assists in resource distribution and scheduling. A well-calculated project can deliver a roadmap for when specific tasks need to be accomplished and the resources necessary for those tasks. It ensures resources are neither overcommitted nor underutilized, thereby optimizing efficiency.

Thirdly, it serves as a foundation for cost justification and investment decisions. Without a proper estimate, it's difficult to assess the project's financial feasibility. A precise estimate provides a comprehensive financial plan, making it simpler for stakeholders to approve and invest in the project.

Lastly, proficient software development estimation practices can boost team communication and elevate customer satisfaction. When everyone has a clear comprehension of the project's timeline and deliverables, it diminishes the chances of miscommunication and fosters transparency, resulting in improved trust and satisfaction among stakeholders.

A well-structured project estimate should incorporate the following key components:

  1. Scope of Work encompasses a detailed description of the project's deliverables. It should outline the functionalities, features, and requirements of the software.
  2. Cost Estimation refers to the financial resources required to complete the project. It should include staffing, technology, infrastructure, and other expenses.
  3. Time Estimation involves predicting the project's duration, a key aspect of software development estimation. It should cover all stages of the software development life cycle.
  4. Resource Estimation pertains to the human resources, hardware, and software needed for the project's execution.
  5. Risk Analysis includes identifying potential challenges or risks that could impact the project's timeline or cost and the strategies to mitigate them.
  6. Assumptions and Constraints enumerate any assumptions made during the estimation process and any constraints that could affect the project's execution.

By recognizing the significance of software development estimation and what a project estimate should encompass, teams can manage their projects more effectively, leading to successful and timely deliveries. Remember that software development estimation is both an art and a science, demanding technical acumen and intuitive judgment.

Software Development Time Estimation Techniques

Historical Data For Future Estimates

Using past and present data and comparing the two is a reliable and efficient way of tracking time. You can calculate your personal time estimating accuracy by taking the initial estimate and dividing it by the actual amount of time it took to complete the task.

You will then use this data to generate a graph that will show your trend lines.

Software development time estimation techniques

Using this graph and data, you will then be able to make a more accurate estimation of how long it will take you to complete a specific task. You will also be able to identify any anomalies, which will enable you to investigate and determine what went wrong.

The trick to making your personal time estimate data more useful is to keep your graph updated on a regular basis. You will be able to forecast potential project deadlines even more accurately once you have complied with hundreds of data points.

Estimates for software development

Work Breakdown Structure

A Work Breakdown Structure (WBS) divides a project into observable and manageable deliverables. It will demonstrate to the client that progress is being made while not being pressured to deliver the whole project at once. It also allows for more precise predictions since it is easier to predict how long a single task would take than a project with several small tasks.

A WBS can divide a ten-month project into ten one-month projects, making it much more manageable and easy for analysis. Furthermore, it encourages development teams to be more incentivized to discard or rework a portion of a project than the whole project.

When working on a project as a whole, teams may stick to their results, even if they are unusable. This will only waste time because it will take too long to halt and restart their development.

Estimating software projects

Planning Poker

When working in a development team, there will often be many competing thoughts and ideas, especially when it comes to estimating software projects. Planning poker, also known as “scrum poker” and “pointing poker”, is a gamified technique that development teams use to guess the effort of project management tasks. These estimations are based on the entire group's input and consensus, making them more engaging and accurate than other methods.

An anchoring bias will also be avoided by team members telling their predictions all at once. Furthermore, it may uncover misunderstandings, overlooked nuances, or new perspectives.

How to estimate software development time

Bottom-Up Estimation

Bottom-Up Estimation is a method of estimating time for software development that begins at the granular level. This method breaks down the project into its smallest components or tasks. Each task is then estimated independently for the time and effort required to complete it. Once each task is estimated, the times are combined to provide the overall project estimate. The Bottom-Up approach can be highly accurate as it considers each task in detail. Still, it may be time-consuming and requires a thorough understanding of the project.

Top-Down Estimation

Top-Down Estimation is another technique used to estimate time for software development. In contrast to the Bottom-Up method, this method starts with a broad overview of the project and then breaks it down into its major components. The time required for each of these major components is estimated and added together to form the total project estimate. This method is generally faster than the Bottom-Up method. Still, it may need to pay more attention to detailed tasks, potentially affecting the estimate's accuracy.

Parametric Estimation

Parametric Estimation is a statistical approach to project time estimation. This technique uses historical data and mathematical formulas to calculate the estimate. It considers the relationship between variables and uses this relationship to estimate the time and cost of the project. The accuracy of this method largely depends on the quality and relevance of the historical data used.

Relative Sizing

Relative sizing, also known as Story Point Estimation, is a technique often used in Agile methodologies. Instead of providing an absolute time estimate, it involves comparing features or requirements of a project to each other in terms of their relative size or complexity. The time required to develop these features is then estimated based on this relative sizing and the team's known velocity, i.e., how much work the team can complete in a given time.

Wideband Delphi

The Wideband Delphi technique is a consensus-based estimation method. This technique involves several experts who independently estimate the project. Each expert provides an estimate anonymously. These estimates are then discussed as a group, and the process is repeated until a consensus is reached. This technique leverages the group's wisdom, and a more accurate estimate can be derived through discussion and iteration. However, it can be time-consuming and requires the availability and cooperation of multiple experts.

5 Steps to Estimate Software Development Time

Deliver Sprint Promises

Instead of giving an estimate for the whole project, give estimates for individual tasks. When comparing one task to another, it is much easier to predict how long it will take. Furthermore, it enables development teams to change potential deadlines based on their current progress.

Sprint promises not only give developers more leeway and more reliable forecasts, but also keep clients happy by providing deliverables on a regular basis.

Take Into Account All Aspects Of Software Development

A team should look at the following to make reasonable and precise estimates:

  • Detailed Requirements: the more detail the team has on the scope and results of a project, the more they will be able to predict a time estimate.
  • Graphic Designs: complex user interfaces also necessitate more technical work and can take longer to implement.
  • Technology Stack: depending on the complexity of the project, a team could need to use a wide range of complex technologies, third-party APIs, and custom solutions.
  • Experience: since a senior engineer can have different time estimates than a junior engineer, predictions should be made based on individuals rather than the team as a whole.

Control Uncertainties

Probability is not a method for creating predictions. Instead, it is a tool for calculating the unpredictable. As a result, a team should always prepare for unknown factors and provide additional time to deal with them.

It is a standard strategy to double an estimation in order to plan for the unexpected without running out of time.

Members Must Be Truthful With Their Colleagues

Coworkers should share their ideas and concerns with one another to get a more realistic picture of time estimates. After all, everyone is unique and will need a different amount of time to complete their tasks.

To engage in a problem-solving mode rather than an integration mode, members of a developmental team should be transparent, truthful, and interact regularly with one another.

Examine Estimation As You Would Any Other Method

Estimating software development, like processes, necessitate multiple revisits and reworkings. When a project runs beyond its allotted time, development teams should revise their forecasts and notify their clients.

The team should also reduce the scope and complexity of whatever task they are working on so they can adapt what they can do to fit the time frame. While this is not exactly an estimating technique in software engineering, it will provide the team with the predictability of stating to the client that certain deliverables will be accessible by certain dates.

Software project estimation

Why Is Accurate Software Time Estimation So Difficult?

Time estimation in software engineering is so difficult because estimates have so many flaws in the first place.

For starters, once an estimate and target delivery date are given, they are usually set in stone. They are treated as commitments when they should not be considered as commitments in the first place. Furthermore, it is difficult to understand all of the complexities of a project before you begin working on it.

There are several ways to help avoid estimation failure. One of the examples is not to skip a discovery phase as the research during this step of the development process helps to make estimation more precise and detailed. Also, the absence of the discovery phase falls in one of five main reasons products fail. According to CB insights, in 35% of cases, poor market, product, development, and customer research resulted in product failure.

Read more in our article How to Build a Great Product: Step-by-Step Guide to a Product Discovery.

Other considerations include:

  • Estimates often become rigid targets, misconstrued as commitments, which ignores the initial complexities and unknowns of a project.
  • Failing to conduct a discovery phase, a critical step in detailing estimates, contributes to project failures.
  • External, uncontrollable factors or force majeure, such as unexpected software bugs, often affect the development process.
  • Unforeseen changes, such as team alterations or unanticipated issues in coding, can occur. Moreover, non-engineering tasks often need to be addressed in time assessment, such as research, which can add to the timeline.
  • Requirements can change at any point, including post-completion, necessitating revisions rarely included in initial estimates.
  • When a project lags, original estimates are seldom updated, causing engineers to rush, compromising quality, and increasing the likelihood of burnout.
  • Averaging software development estimates is unreliable due to statistical anomalies. Outliers, such as exceptionally long projects, can distort averages, making them less robust and misleading.

Why Is Estimating Software Development Time So Difficult For Engineers?

  • Creating software is a process engineers often overlook the fact that development entails more than just writing code. It also includes research, collaboration, and the time required to think. The last point is particularly important as software development needs a lot of brainpower, and coding does not spontaneously happen.

Much like there is more to writing a novel than just typing words, there is more to software development than writing code.

  • Debugging Is Difficult To Quantify And Is Often Overlooked. There is a distinction between finishing a solution and finishing a problem-free solution.

Software development necessitates multiple tests and bug fixes, which are often ignored during the initial software project time estimation phase. After all, it’s difficult to predict how many bugs will appear and how long it’ll take to resolve them.

  • They Do Not Have All Of The Information. For the average person, software development is often a foreign sector. Details that may seem minor and insignificant to a client may constitute a significant portion of a development team’s work.

As a result, if the engineer does not know all of the aspects of a project, they cannot provide an accurate SW estimation.

  • Context Switching. Engineers often work on several tasks at the same time. In addition, it is impractical to expect an engineer to sit down and work for an entire workday without distractions and interruptions. They will need breaks, visits to the restroom, attend meetings, and so on - and when this occurs, they will lose their train of thinking.

This is known as context switching, and it occurs when a person loses momentum due to switching to a new task. They will have to become acquainted with their new priority, which will reduce their productivity.

Last-minute adjustments and demands, in particular, can fully derail an engineer’s momentum.

  • Everyone Is Different, this is especially common in development teams, which would have engineers with varying levels of experience. Just because one person can predict how long it will take them to complete their work, it does not mean that another will be able to do the same.

Time estimates are non-transferable, and everyone must estimate their own time in order for the overall prediction to be reliable.

Software Development Estimation Tools

Various tools and methodologies can assist in the optimization of project estimation. They help break down tasks, estimate time and costs, and manage the project more efficiently. Here are a few examples:

Work Breakdown Structure (WBS)

WBS is a widely used project management tool that helps break down the project into smaller, manageable tasks. Each task is organized hierarchically, allowing for a better understanding of the project's scope and making it easier to estimate each component individually. WBS promotes a more accurate and realistic project estimation by focusing on deliverables rather than activities.

PERT Chart (Program Evaluation Review Technique)

The PERT Chart is another useful tool for project estimation. It uses a graphical representation to organize and schedule tasks. The chart includes estimates for the shortest, longest, and most likely time to complete each task, providing a range for the project timeline. It's particularly useful for projects with interdependent tasks, as it visualizes task dependencies and the critical path, allowing for effective scheduling and risk management.

Product Backlog

In Agile methodologies, the Product Backlog is a dynamic, ordered list of everything that needs to be done within a project. It evolves with the project, with items added, removed, or reprioritized based on business or customer needs. The backlog assists in estimation by providing a clear view of what needs to be done, making it easier to gauge the work involved and estimate the time required. It's a crucial tool for planning iterations and ensuring the team focuses on high-priority tasks.

These tools, when used effectively, can greatly assist in enhancing the accuracy of software development estimation, leading to better project planning and successful delivery.

Handling Software Estimations at Softermii

Learning how to estimate software development time can be difficult for inexperienced and disorganized development teams. It is difficult to provide reliable estimates without strict and clear data comparison, software development estimation techniques, and a project is more likely to fail without proper time predictions.

As a professional software development company, we've honed our approach to software project estimation into an efficient and effective process. Accurate estimations are crucial for project success, ensuring proper resource allocation, effective project planning, and maintaining client trust.

Our software project estimation process begins with three initial steps, which blend historical data and expert opinion to deliver accurate forecasts.

  1. Learning from History: We first leverage the knowledge from similar projects or features we've already developed. This experience offers valuable insights into the potential roadblocks, timeframes, and resources required, thereby contributing to a more precise estimate.
  2. Drawing upon Statistical Data: We also factor in statistical data about our previous experience in this niche or industry. This information, carefully aggregated and analyzed, provides a broad perspective and helps us anticipate the industry-specific challenges that might impact the project timeline or budget.
  3. Leveraging Softermii's Expert Estimation: The final step of our initial estimation process involves our team of experts. They take into account the specifics of the product in question, including the technologies that will be used, the complexity of the project, and the client's unique requirements and goals. This expert estimation forms the core of our project forecasting, grounding our predictions in deep technical knowledge and strategic expertise.

By blending these three elements – historical data, industry statistics, and expert judgment - Softermii's approach to software project estimation offers a comprehensive, tailored forecast for each project. It's a strategy that's served us and our clients well, balancing efficiency and precision to keep projects on track and within budget.

As a result, in order to have a satisfied client base, software development teams must employ smart estimation techniques in software development. Accounting for delays and uncertainties is a part of this. Engineers risk failing if they do not, and according to studies, seven out of twelve of the most infamous failed software projects cited delays as a reason for failure.

Read also: How much does it cost to build an app and how to reduce it infrastructure costs

Precise deadlines by the team of professionals

In order to ensure that the development is going well, our dedicated team highly values project management and we keep our customers informed by interacting with them on a regular basis.

Furthermore, before we take on and begin any project, we have a comprehensive and detailed discussion with our clients and conduct thorough research. We can then provide more reliable and practical software development estimates as we will then be able to completely understand the project and its scope.

Schedule a call with one of our development experts and obtain estimates that are both realistic and accurate.

Frequently Asked Questions

What Software Development Time Estimation Techniques Are There?

There are multiple estimation techniques that might help in providing the most accurate estimation, however, we suggest you choose among the following:

  • Historical Data For Future Estimates
  • Work Breakdown Structure
  • Planning Poker

Why is it important to precisely estimate software development?

It’s because 60% of a project’s success depends on the developmental team meeting its cost and time estimates. The ability to accurately predict the time and delivery of a task is proportional to its size. In other words, the larger the job, the more unreliable the calculation. After all, smaller tasks within larger tasks often necessitate estimates and subsequent progress monitoring.

What method is the most efficient to get a software development estimate?

The most efficient method to get a software development estimate often varies based on the project's specifics. Still, generally, a combination of several techniques is used. The Function Point Analysis (FPA) method is commonly used to measure the software's functionality, which directly relates to the software's size and complexity.

This method provides an objective, comparative measure that assists in estimating the coding effort, project duration, and cost.

Another method is COCOMO (Constructive Cost Model), which uses a mathematical formula to estimate project costs. It considers factors like lines of code, project size, and more to generate an estimate.

Use Case Points (UCP) is another method that bases estimates on use cases, which are descriptions of how users will interact with the system.

Finally, Agile methodologies like Story Point Estimation, Planning Poker, or T-Shirt Sizes can be used, especially for iterative and incremental software development projects. These methods focus on team capacity and the complexity of user stories (features) rather than the exact time.

What is the Agile approach in software time estimation?

The Agile approach in software time estimation is a flexible, collaborative process that focuses on estimating the size or complexity of work items (typically user stories) rather than trying to predict how long each task will take to complete. It involves the whole team and is usually done in the context of planning sessions.

Several techniques are associated with Agile time estimation. One is Story Points, where each feature or user story is assigned a point value that reflects its complexity relative to other stories. Another common technique is Planning Poker, where team members make estimates by playing numbered cards face-down to the table instead of speaking them aloud to avoid cognitive bias. Once all cards are revealed, the estimates are discussed, and a consensus is reached.

T-Shirt Sizes (S, M, L, XL) is another Agile technique, where features are categorized based on complexity. It's a less granular method but can be quicker and simpler, especially for initial high-level planning.

The Agile approach to software time estimation is iterative and embraces change. It allows for adjustments as more information becomes available, making it more accurate over time and better suited to the dynamic nature of software development projects.

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