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How Do Software Development Vendors Typically Estimate Projects?

Amit Ashwini
August 8, 2017

Software development projects are difficult to size up accurately, unlike other everyday objects like the table which comes with a fixed length, breadth and height. Most objects can be sized up using one or more parameters. Lines of Code (LOC) is the closest we’ve come to sizing up software. The rest of the derived data like effort, delivery schedule are dependent on the size of your software. In software development, it is tough to accurately determine how long and how much time it will take to deliver a product.

If you've dealt with mobile or web development estimates in the past, chances are, the final cost didn’t match the initial estimate you were given. With a poor estimate, you run the risk of not being able to complete your project within budget. When it comes to software development, the careful estimation of duration and cost are critical to making strategic business decisions. Below is how we go about estimating projects.

1. Requirement gathering

Each time a prospective client asks for a quote, we provide a general estimate in person-hours based on our historical data and our experience with similar projects. Nevertheless, for a close to accurate estimate, we need to understand your vision or your product concept. We would ask you to provide us with a list of all the features you want, a prototype if you have one and a list of competing products. This information-gathering process will take some time, but as a result, we’ll be able to formalize the scope of our potential work and therefore reach a more realistic estimate.

2. Examining the different features

Once we have all the information we need and have understood your requirements, we start analyzing and placing the features using the bottom up method. The bottom up model starts by piecing together specific and necessary features, then proceeds with composing a higher level of features, using the basic or lower level features. It keeps creating higher level features until the final product evolves into a single, interconnected system. In simpler words, we break down big tasks into smaller ones and examine them individually while keeping the bigger picture in mind. Once we figure out the scope of work, we move on to the estimating stage.

3. A primary estimation

Once we have the requirements in hand and a good understanding of the features you need, we compare them to a previous similar project to estimate the cost and duration of the current project. Here, first, we need to identify a project we’ve already completed which is analogous to this regarding requirements. Then we take a look at the hours it took us to build the similar project to reach an estimate of duration. This approach of relying on previous projects and experiences will ensure we arrive at a more accurate estimate. We can use this method to estimate, only if we have worked on similar requirements, containing tasks which are very analogous to those of the project we’re estimating. There are times when a potential client comes with requirements and features we haven’t developed before. In these cases, we take the team’s opinion into consideration before we reach an estimate rather than hazarding a guess.

4. Expert estimation

The expert evaluation looks to a group of technical experts who rely on their experience to estimate software development projects. Our team researches the features needed to be estimated. After, our project manager sets up a meeting with the team to clarify the scope of the work and the experts help estimate the number of hours needed for the additional implementations.

5. The final estimate

In the end, the project manager assigned to your project will consider all the results from analogous and expert estimations and arrives at the final estimate. There are times when the client proposes a few changes based on the final estimate we send them. They may choose to drop a few features to save time or decide to add more features, too. If this is the case, we re-estimate and get back to you. Since our estimates are based on our previous data, the final estimate is as close to accurate as you’ll get. This way, you reduce the risk of exceeding your budget.

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Amit Ashwini