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Why Time Estimation Matters in Creating Successful Software Development Projects

Tina Lj.10 min readMar 4, 2024Business & Life
Why Time Estimation Matters in Creating Successful Software Development Projects
Tina Lj.10 min read
Why is estimation important in software development?
The role of estimation in project success
How do I estimate the cost and effort of a software development project?
How to implement effective estimation
What are advanced concepts in software estimation?
How do you do better software estimation?
Using effort estimation for your next software development project

If you are reading this blog, you are probably looking for answers about how software effort estimation can affect your ongoing project or how to plan future estimates. Or, you may have never given it much thought and want to know how this is connected with software development.

Software development estimation plays a big role in successfully executing software development projects.

And no, we are not just talking about this because our agile team drilled this into our heads. The truth is, if you do it right, software development time estimation will help you complete your project within the deadlines. It also helps with budgeting and setting realistic client expectations. Because of all that, this blog post will discuss why estimation in software development actually matters, what estimation techniques exist, and what you can do to implement effective estimation practices.

Why is estimation important in software development?

Estimation in software development is not just about guessing how long it will take to complete a project. It's a process that affects almost every aspect of project management and execution. Accurate software development estimation ensures that project managers can allocate resources effectively, manage client expectations, and plan for the unexpected.

Without reliable software development effort estimation, projects are at risk of running over budget, missing deadlines, and resulting in poor outcomes.

The importance of software development estimation extends beyond project scheduling. It plays a role in strategic planning, helping project managers and stakeholders understand the scope of work and the resources required. Accurate estimates enable software development teams to make informed decisions, prioritize tasks, and adjust project scopes as needed.

Estimation can also serve as a communication tool, helping team members, clients, and stakeholders understand project timelines and deliverables.

The role of estimation in project success

The correlation between accurate estimation and project success cannot be overstated. Software development projects involve numerous variables, from technological challenges to human factors, all of which can impact the timeline and cost of a project.

Effective project estimation allows for identifying potential obstacles and challenges early in the project lifecycle.

Additionally, estimating software development helps manage risks better by predicting the time and effort different project tasks will need. This helps create more realistic project schedules, increasing the likelihood of meeting project deadlines and budget constraints.

In addition, if you do the software development estimation right, there will be more trust between clients and service providers. It all contributes to the successful long-term collaborations.

How do I estimate the cost and effort of a software development project?

Estimating the cost and effort involved in a software development project requires considering several factors, including project scope, available resources, technological complexity, and historical data.

Using historical data from similar past projects can provide invaluable insights into current projects' effort and time requirements. Aside from that, feel free to engage the software development team in the estimation process. It can help create more accurate and realistic estimates, as team members can provide insights based on their experience and expertise.

An effective estimation process also involves a thorough analysis of the software development life cycle, identifying all the tasks and activities that must be completed. This comprehensive approach ensures that no aspect of the project is overlooked, contributing to more accurate estimates.

Furthermore, if you have experience with projects, then you know that the potential for the project scope to change is great. Incorporate those plans into the estimates to accommodate unforeseen developments.

Let's explain software development estimation techniques

Several estimation techniques can be employed to predict the time and effort required for software development projects. Each technique has strengths and weaknesses, and the choice of technique often depends on the project's specific requirements, the available data, and the team's experience.

1. Analogous estimation

Analogous estimation involves using data from similar past projects to estimate the effort and time required for a current project.

When to use an analogous estimation technique?

This technique is useful when limited information about the project is available, but a wealth of historical project data is available. By comparing the new project with similar projects, estimators can derive rough estimates based on past experiences.

2. Parametric estimation

Parametric estimation on statistical models to estimate project time and effort. This technique calculates estimates using parameters such as the number of code lines or function points.

When to use parametric estimation?

Parametric estimation provides a more objective basis for estimates, so it's most suitable for projects with well-defined requirements and measurable attributes.

3. Function point analysis

Function point analysis (FPA) is a method for measuring the size and complexity of a software system by quantifying its functionalities. Simply put, it is a way to determine how big and complicated a software system is by counting what it can do.

FPA considers various aspects of the software, such as inputs, outputs, user interactions, and data complexity, to estimate the effort required for development accurately.

When to use function point analysis?

It is particularly well-suited for projects where the requirements are clear, and the focus is on the software's functionality. For example, suppose your next software development project is an outsourced project. In that case, FPA will provide a common language for the client and the service provider to discuss the size and complexity of the project.

FPA is best used in scenarios where the software's functional requirements are key drivers of development effort and cost. It is less suited for projects where the effort is heavily influenced by non-functional requirements, such as performance, security, or user experience, as FPA does not directly measure these areas.

4. Use case points

Use case points (UCP) are a way to determine how much work a software project will need by examining its use cases, which are scenarios of how users interact with the software. By counting and evaluating these use cases, the project measures its complexity. The more complex the use cases, the more effort the project will require.

When to use UCP?

UCP is particularly useful for projects where use cases are a primary driver of development activities.

5. Three-point estimation and PERT

Three-point estimation and the Program Evaluation and Review Technique (PERT) involve creating three scenarios: optimistic, pessimistic, and most likely. The final estimate is a weighted average of these three values, providing a balanced view that accounts for uncertainties in project estimation.

When should the three-point estimation technique and PERT be used?

These techniques are best used for projects with high uncertainty, where predicting the time or cost is challenging. They are particularly valuable in planning phases of software development, research and development (R&D) projects, and any situation where experience and historical data are limited.

6. T-shirt sizing

T-shirt sizing is a simple, intuitive method for estimating project size and effort by categorizing tasks or features into sizes (e.g., XS, S, M, L, XL).

When to use the t-shirt sizing technique?

This technique is useful for early-stage estimations when detailed information is not available. It allows teams to assess project scope quickly and simplifies decision-making during early project stages or sprint planning, making it perfect for environments that value speed and flexibility over precise estimates. For example, some of our teams use this method in sprint planning.

Using t-shirt sizing right helps you speed up planning and start projects faster, saving you time for the actual work.

Saving time with software effort estimation techniques

7. Planning poker

Planning poker is an agile estimation technique that involves team members providing their estimates through a consensus-based, gamified approach. Each team member uses a set of cards representing different time or effort values to vote on the size of a task or feature. This collaborative process helps in creating more accurate and democratic estimates.

When to use planning poker?

It's particularly effective for software development teams that need to estimate the effort and time for tasks or features using diverse perspectives and expertise.

8. Story points to hours

Story points are a unit of measure for expressing the overall effort required to implement a user story in agile software development. Converting story points to hours involves translating these abstract estimates into more concrete timeframes, which means better project planning and scheduling.

When to use story points?

Converting story points to hours is most beneficial in agile projects where stakeholders or team members require a more traditional, time-based understanding of project timelines.

How to implement effective estimation

Implementing effective estimation in software development requires a structured approach that combines methodical practices with the collective experience and intuition of the development team. Here are strategies to enhance the estimation process, ensuring project timelines and efforts are accurately forecasted.

Establish a project timeline

Creating a detailed project timeline is the first step toward effective estimation. This timeline should list the big goals and outcomes and consider the details of every step in the software development life cycle. well-defined project timeline serves as a roadmap, guiding the team through the project's duration and ensuring all stakeholders clearly understand the project's trajectory.

Organize your tasks for clarity

A Work Breakdown Structure (WBS) is a tool in project planning that breaks down the project into smaller, more manageable components. This hierarchical decomposition of tasks helps identify all the activities required to complete the project, making it easier to estimate the time and effort for each task accurately.

Organizing tasks this way clarifies the project goals and helps create a more organized way to estimate the work needed.

Manage product backlogs with Kanban boards

Kanban boards are an effective agile tool for managing product backlogs. They offer a visual representation of the work ahead. We use them for both tech and non-tech teams.

By categorizing tasks into columns (e.g., To Do, In Progress, Done), teams can better prioritize work and adjust their focus based on the project's current needs. This task management method helps create more realistic estimates by considering the team's capacity and the project's evolving nature.

Conduct team meetings

This sounds simple, but it needs to be said. Regular team meetings are important for open communication and collaboration among team members.

These meetings provide a platform for discussing project progress, addressing potential bottlenecks, and revisiting estimates based on actual project dynamics. Involving the team in estimation discussions ensures that everyone contributes and brings their perspective. In that way, estimates will be more accurate.

Stay on track with real-time dashboards

Real-time dashboards offer a glance at project progress, highlighting key metrics such as completed tasks, remaining work, and timeline adherence. These tools enable project managers and team members to monitor the project's progress in real time, making it easier to identify deviations from the planned estimates and implement necessary adjustments promptly.

By using real-time data, teams can ensure that their estimates remain aligned with the project's actual progress. Some examples are platforms like Jira and tools like Hubspots. Google Analytics, for example, provides a real-time dashboard to track website traffic, user engagement, and conversion rates.

What are advanced concepts in software estimation?

Exploring advanced concepts can provide teams with additional tools and perspectives to refine their estimation practices further.

User story definition

User stories are short, simple descriptions of a feature told from the user or customer's perspective. Defining user stories is a step in agile software development, providing a clear, focused basis for estimating the effort and time required for implementation. By understanding the user's needs and the feature's value, teams can make more informed estimation decisions.

Do not mix this with story points to the hours we mentioned above. Story points to hours involves translating the effort needed to complete a user story, measured in story points, into actual time units (hours), while the user story definition defines what needs to be built from the user's perspective.

Epic definition

In agile frameworks, an epic is a large body of work that can be broken down into smaller tasks or stories. Defining epics and their high-level designs early in the project helps understand the larger scope and complexity of features, which means more accurate long-term estimates.

This approach ensures that the estimation process accounts for significant project components.

Story point-based estimation

Story point-based estimation allows teams to assess the relative effort of completing user stories without getting bogged down by specifics. This method focuses on the complexity, risk, and effort involved rather than directly attempting to quantify tasks in hours or days.

Using story point-based estimation is good for teams because it helps them focus on tasks' relative effort and complexity rather than exact time frames.

This is one of the techniques our agile coaches use with our teams. Remember that one of the agile principles says: "At regular intervals, the team reflects on becoming more effective, then tunes and adjusts its behavior accordingly."

How do you do better software estimation?

Software development projects are complex and unpredictable, which means estimation can be difficult. Factors such as evolving requirements, technological advancements, and team dynamics can all impact the accuracy of estimates. First, you need to recognize the difficulties involved in estimation so you can develop strategies to address them effectively.

Implement risk management

By identifying potential risks early in the project lifecycle, teams can incorporate unpredictable things into their estimates. This risk management approach helps ensure their plans are stronger against the unknowns in software projects.

Avoid common pitfalls in estimation

Common pitfalls in software development estimation include over-optimism, underestimating complexity, and overlooking non-development tasks. Avoiding these pitfalls requires a combination of experience, careful planning, and ongoing review and adjustment of estimates.

Use the proper software estimation technique

A well-chosen technique can provide a structured framework for estimating, making the process more reliable and repeatable. In this blog post, we listed many techniques used in software engineering.

Before choosing the most appropriate technique, you must thoroughly understand the project requirements. This choice will significantly influence the accuracy of your estimates. Step by step, go over these points:

  • Understand project scope: Gain a deep understanding of the project's scope, including all deliverables, features, and functionalities.

  • Break down tasks: Utilize a Work Breakdown Structure (WBS) to decompose the project into smaller, more manageable tasks. This means more detailed and accurate estimates.

  • Involve the team: Engage the entire development team in the estimation process. The team's collective experience and expertise will contribute to more realistic estimates.

  • Review and adjust: Estimation should be an iterative process. Regularly review estimates against actual progress and adjust as necessary to reflect any changes in scope or unforeseen challenges.

Using software development efforts for the entire project

Using effort estimation for your next software development project

Estimation is more than just a preliminary step in the software development process; it's a continuous practice that requires refinement and adaptation as the project evolves. Software effort estimation helps plan, manage resources and set realistic timelines for software projects. This process examines the project's overall goals, complexity, and specific needs. Then, it figures out how much work the development team requires to finish the project successfully.

If you are wondering how much effort all this involves, remember that the goal of software development estimation isn't to predict the future with certainty but to provide a reliable basis for planning and decision-making. If project managers, team leaders, developers, and tech leads use the insights and strategies we discussed here, your future projects will be more successfully completed.

In other words, if you do this right, you will miss significantly fewer deadlines. If you have any questions about what software estimation techniques we use in Devōt, feel free to contact us.

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