The senior project managers are the person who give the estimation of projects cost. While some part time project managers are working with small scale projects, some work with multiple clients on weekly basis. So let us discuss this estimation which is very important for software project management services firms.
Software project estimation is essential for medium, large and small scale projects. Without appropriate estimation you could easily be over budget on your project expenses. Even though proper software estimates can prevent on-going financial issues it’s still best not to cut corners when on doing your job as a project manager.
What Is Software Project Estimation?
In short, project estimation is a complex process that revolved around predicting the time, cost, and scope that a project requires to be deemed finished. But in terms of software development or software engineering, it also takes the experience of the software development company, the technique they have to utilize, the process they need to follow in order to finish the project (Software Development Life Cycle). Project Estimation requires the use of complex tools & good mathematical as well as knowledge about planning.
In most cases, the whole estimation process would cost the company rather considerable cost & time at the very first stage of developing a brand new website, app, or software. However, this will act as the stepping stone to make the final result more credible, realistic, and customer-satisfying.
Whether big or small, every project is advised to employ project estimation as a crucial step to avoid unpredictable failure in the future.
Cost
In project management, cost is one of the three primary constraints. The project will fail if you do not have sufficient funds to complete it. You can help set client expectations and ensure you have enough money to complete the work if you can accurately estimate project costs early on. Estimating costs entails determining how much money you’ll need and when you’ll need it.
Time
Another of the project’s three main constraints is the lack of time. It is critical for project planning to be able to estimate both the overall project duration and the timing of individual tasks.
You can plan for people and resources to be available when you need them if you estimate your project schedule ahead of time. It also enables you to manage client expectations for key deliverables.
Size or Scope
The third major project constraint is scope. The project scope refers to all of the tasks that must be completed in order to complete the project or deliver a product. You can ensure that you have the right materials and expertise on the project by estimating how much work is involved and exactly what tasks must be completed.
Three sides of a triangle are often used to describe the three main constraints. This is because any changes to one constraint will inevitably have an effect on the other two. You need to know the scope and schedule to accurately estimate the budget. If one of the three estimates turns out to be higher or lower than you anticipated, the other two are likely to be off as well.
Risk
Any unforeseen event that could positively or negatively impact your project is referred to as project risk. Estimating risk entails predicting what events will occur during the project’s life cycle and how serious they will be.
You can better plan for potential issues and create risk management plans if you estimate what risks could affect your project and how they will affect it.
Resources
The assets you’ll need to complete the project are known as project resources. Tools, people, materials, subcontractors, software, and other resources are all examples of resources. Resource management ensures that you have all of the resources you require and make the best use of them.
It’s challenging to plan how you’ll manage resources without knowing what you’ll need and when. This can result in people sitting around doing nothing or materials arriving weeks after you need them.
Quality
Quality is concerned with the completion of project deliverables. Products that must adhere to stringent quality standards, such as environmental regulations, may require more money, time, and other resources than those with lower standards.
Estimating the level of quality required by the customer aids in the planning and estimating the remaining five aspects of your project. Because all six project factors are interconnected, forecasts for one can have an impact on forecasts for the other five.
As a result, applying the same software project estimation techniques to all six areas can help you improve your accuracy.
The 3 Major Parts to Project Estimation
- Effort estimation
- Cost estimation
- Resource estimate
While accurate estimates are the basis of sound project planning, there are many techniques used as project management best practices in estimation as – Analogous estimation, Parametric estimation, Delphi method, 3 Point Estimate, Expert Judgment, Published Data Estimates, Vendor Bid Analysis, Reserve Analysis, Bottom-Up Analysis, and Simulation. Usually, during the early stages of a project life cycle, the project requirements are feebly known and less information is available to estimate the project. The initial estimate is drawn merely by assumptions knowing the scope at a high level, this is known as ‘Ball-park estimates’, a term very often used by project managers.
We will next learn about the top project estimation techniques.
Project Estimation Techniques
1. Top-Down Estimate
Once more detail is learned on the scope of the project, this technique is usually followed where high-level chunks at the feature or design level are estimated and are decomposed progressively into smaller chunks or work-packets as information is detailed.
2. Bottom-Up Estimate
This technique is used when the requirements are known at a discrete level where the smaller workpieces are then aggregated to estimate the entire project. This is usually used when the information is only known in smaller pieces.
3. Analogous Estimating
This project estimation technique is used when there is a reference to a similar project executed and it is easy to correlate with other projects. Expert judgment and historical information of similar activities in a referenced project are gathered to arrive at an estimate of the project.
4. Parametric Estimate
This technique uses independent measurable variables from the project work. For example, the cost for construction of a building is calculated based on the smallest variable as the cost to build a square feet area, the effort required to build a work packet is calculated from the variable as lines of codes in a software development project. This technique gives more accuracy in project estimation.
5. Three-point Estimating
This technique uses a mathematical approach as the weighted average of an optimistic, most likely and pessimistic estimate of the work package. This is often known as the PERT (Program Evaluation and Review Technique).
6. What-If Analysis
This project estimation technique uses assumptions based on varying factors like scope, time, cost, resources, etc., to evaluate the possible outcomes of the project by doing impact analysis. In a usual scenario, the project estimate is done by conducting estimation workshops with the stakeholders of the project, senior team members who could give valuable inputs to the estimation exercise. The high-level scope is broken down into smaller work packages, components, and activities, each work package is estimated by effort and resources needed to complete the work package. The project may be detailed into the smallest chunk that can be measured.
The following activities are done during the workshop:
- Break down the scope into smallest work package, components or activities (WBS)
- Sequence the activities in the order in which they will be performed
- Identify the effort required to complete each activity
- Identify the resource estimate to complete each task or activity
- Identify the dependencies to complete each activity
- Identify the possible risks and assumptions
- Define the resource and cost estimate to the completion of each activity, component and work package
Conclusion:
Project management is the discipline of initiating, planning, executing, controlling, and closing the work of a team to achieve specific goals and meet specific success criteria at the specified time. These are the core project management concepts that form the foundation of any project management process you will ever be involved in. If you’re pursuing a career in project management, it’s imperative that you understand these fundamentals.