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June 20, 2017
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Project Estimation: How Do You Know That It’s Correct?

Project Estimation: How Do You Know That It’s Correct?

Software project estimates are important. They let you offer timelines to external stakeholders, like PR and finance teams, that prepare for a roll-out based on your guidelines and help you prioritize projects so you can complete them more efficiently.

But despite the importance of good estimations, these time and money guidelines are almost never accurate. Let`s have a look at some numbers.

Resource: Kollinger Associates

As we can see, only one percent of projects fit within their original estimations. These failures in correlating between estimations and reality are significant.

Gallup estimates that in the United States, IT failure rates based on overruns and inaccurate estimations are between 5 and 15% — or, monetarily, between $50 billion and $150 billion annually.

Software estimation accuracy is certainly important, but how do you make sure you’re contracting with a software development firm that estimates project delivery time accurately and reasonably? Here are a few factors to take into account to verify the accuracy of project delivery rates:

 

Consider if the estimate has a detailed timeline for every aspect of the project.

If the software development team has provided you an ambiguous estimate without task-specific breakdowns, they may have forgotten to account for several factors that will add additional project length. These often unaccounted for variables include time off, meetings, debugging, final testing, and code review, just to name a few. Ask for a detailed estimate, and if the team still fails to provide you with one, you might want to look for a team that understands the importance of considering each development phase.

 

Ask them to explain their chosen cost estimation model.

There are many different cost estimation modeling systems, most of which come up with different estimation. If a software development team has given you a cost estimation without an explanation, ask them to explain what factors comprised their proposal. For example, a SEER for Software (SEER-SEM) project based on algorithms and knowledge base is likely to provide a different estimation than one based on Putnam’s Software Life-Cycle Management (SLIM).

 

Understand the development’s team skill and familiarity with your project.

Ask your development team how familiar they are with the skills required for your project. If your project requires specialized skills, your development team will likely need to add in more time for these uniquely-skilled team members to be available. If you feel like a team isn’t being honest about their familiarity with the skill set required for your project, or if they say they can finish the project as quickly as they would a familiar project, you should view this discrepancy as an estimation red flag.

Ciklum understands that you don’t want to be worrying about time or money when you want to complete a software development project, and nearly three-fourths of our clients chose us because of our low risk. Ciklum’s flexible Project teams earned our clients over $100 million dollars with an average project completion time of four weeks. Contact us for an accurate software project estimation today.