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How To Estimate A Software Development Project Accurately

How To Estimate A Software Development Project Accurately
How To Estimate A Software Development Project Accurately

Software development projects frequently exceeded their time estimations, resulting in lost income, missed market opportunities, and, in the case of a software development vendor, Service Level Agreement charges.

Time estimation is difficult. Every developer has an interval where the estimations are accurate. Going below the expected interval means that the overhead (developing, testing, and checking in code) was discounted. While, going above the interval means that the work is too enormous to manage.

What is Time Estimation?

Time estimation refers to the method and process of estimating the amount of time (typically hours) required for a single software developer to finish a certain assignment (task, story, epic, etc.) before starting development. It also consists of any subsequent status tracking and target timeline based on these estimates.

A task may need to be broken down into several smaller tasks, each of which must be estimated separately. In this case, the estimation process must be applied to each subtask before the overall task estimate can be calculated.

The ability to accurately estimate the time and delivery of a specific software development project is a result of the relative size of the task which is highly exponential. In other words, as the relative size grows larger, the more inaccurate the time estimate will be at an exponential rate.

What is Estimated?

Time, resources, cost, and human skills are typically determined during testing estimation.

  1. Time. The team’s ability to reach the deadline determines its success. To figure out how long it will take, they should estimate efforts in man-days or man-hours. Project managers determine the ideal duration for each project component and establish a clear timetable to follow, which helps in the timely completion of a project.
  2. Resources. At the start of every project, it’s vital to check the available resources such as infrastructure, specialists, technical capabilities, etc.). If there are not enough resources, it’s most likely that the project won’t be completed in time.
  3. Cost. Testing, like any other job, necessitates expenditures (including expenses towards hardware, software, and human efforts). The overall budget should be assessed and agreed upon in advance, so that the client can be assured that the project will be kept within the budget and that no further expenses would be required.
  4. Human Skills. This assessment takes into account the team members’ professional abilities and experience. If they lack certain skills, the process will slow down, and expenses may arise.

Why is Time Estimation Important?

Accurate time estimation is critical to project management: knowing how long a certain portion of your job will take will enable you to plan and organize yourself much more effectively for the course of your project – which, as we all know, will have a significant impact on its success.

While your estimates won’t be perfect, utilizing the appropriate method can help you enhance accuracy, and having the right understanding or experience with the type of job you’ll be doing will also help in improving time estimation correctly.

With that in mind, it’s a good idea to keep track of pertinent data to assist you to get a decent idea of how long a task will take in general — project time monitoring is more valuable than merely documenting for billing purposes!

Regardless of which time estimation method you employ, the data you collect will help you – over time, your estimates will get more and more accurate.

Why software programmers are bad at estimating time?

So many of us have been there: we’ve utterly miscalculated a work we thought would be simple, and it ended up taking significantly longer than we anticipated. This isn’t your fault; it’s something that humans are just awful at.

This is known as the planning fallacy, which is a phenomenon in which estimates of how long an activity will take to complete are overly optimistic, often ignoring prior experience with similar projects. The planning fallacy when we plan for our own work; strangely, while estimating for other people, we humans are considerably more pessimistic.

It is also vital to recognise that experience in programming is not the same as experience in project estimation. A developer who isn’t involved in the time estimation process will never improve at it. There is also no feedback to learn from if actual time spent is never assessed and compared to estimates.

How to Estimate Time

To avoid these undesirable results, project managers must use a systematic approach to determining the duration of a project. This time estimation method helps project managers provide accurate estimates in their outsourced software development process which is outlined below. You can use this information as a general reference to help you determine realistic deadlines for your software development project.

  1. Define the complexity of the project. Consider the complexity of your project to determine the level of development risk that could affect its timeline. Based on the “Cynefin Framework”, it suggests categorizing projects into three kinds.
  • Known. Developing simple software with known requirements, such as a simple client portal for a small business. The most accurate estimates will be made here and with lower risks.
  • Observable. Building software that is foreseeable, yet some requirements need further analysis. Creating a basic client portal and integrating it with ERP, for example. Small risks are likely to arise throughout the project’s integration phase.
  • Complexity. Custom software development using Agile approaches, for example, entails innovative or specific technology or unclear business requirements (or both). Such a project entails a significant amount of risk and a precarious timeline.As a result, knowing the complexity of a project helps the PM in determining how much time should be added to the project to account for potential risks.
  1. Provide ballpark estimates. Before getting into detailed time estimation, a customer or internal decision-maker might want to acquire a basic idea of how long a project would take in order to set expectations. If that’s the case, after defining software complexity, you can provide ballpark estimates based on previous experience with similar projects or industry benchmarks.
  2. Create and estimate the scope of the project. You should create a scope of work that covers software requirements and then assess each requirement for a complete assessment of software development estimation. Keep in mind the development process that your project employs.
  3. Add a risk buffer. Adding a risk buffer of 5-25% of the total project time (depending on the project complexity) will save you for possible risks such as issues that are hard to foresee, the unpredictability of new technologies, and team conflicts that affect the project productivity.
  4. Make some room for “time eaters”
    You need to add at least 20% of a project’s time to cover for“time eaters” ( team meetings, closure of communication gaps, productivity drops, etc.).

Sample Time Estimation Formula

After combining the results of the previous steps, you’ll arrive at the following formula:

The duration of a project is calculated as follows: total task time estimation (E) + E*risk buffer + E*time eaters.

So, if the total task time estimate for a project is 7,000 hours, the total project duration is:

7,000 + 7,000*0.25 + 7,000*.20 = 10,150 hours


To recap, these are the key things to do when making estimates in software development:

  1. Consider time, resources, cost, and human skills to help you estimate your software development time better
  2. Don’t underestimate your time and know the complexity of the project
  3. Always add a risk buffer for extra things
  4. Break down the project into smaller tasks
  5. Consider the degree of confidence
  6. Each task should have a maximum time restriction

I hope you find these suggestions useful in all of your development estimates. For those who are just getting started with client projects, all of this may take some getting used to, but the more projects you complete, the more intuitive it will become, and you will soon feel much more secure in providing accurate estimates.