The Ultimate Guide to Software Project Estimation [Example Template]
Software Project Estimation. Three words are guaranteed to make anyone in software development shift uncomfortably in their seat. Until now.
Over the past 10 years, our team has planned hundreds of development projects. As you’d expect, we’ve gotten better and better at it!
Estimating is, by definition, a guess about the future. The fact is that the majority of software projects aren’t delivered on time, run over budget, and end up with fewer features than originally planned. It’s safe to say that, as an industry, we’re not all that good at software project estimations, so it’s understandable to be unsure about the process.
Yet there is no getting around the need for robust and accurate software project estimation because, ultimately, clients need to be confident they can fund a project before they commit to it.
What is a Software Project Estimation?
A Software Project Estimation is a document that helps define the resources (people and tools) you’ll need to build your project by listing specific tasks, how many hours it’ll take, and how much it’ll cost (roughly). If you don’t estimate properly or at all, there are many side effects including:
- Depending on the contract in place, clients may have to pay more than they had budgeted.
- The product itself may suffer, as corners get cut trying to deliver within unrealistic time and budget constraints.
- The development team’s morale can be negatively affected, as they suffer from the stress and pressure of trying to meet unrealistic expectations.
- A project may never be completed if funding runs out.
Over the past 10 years, my team and I have planned hundreds of development projects. In the process, we developed a methodology that has worked well and so, we created a template to guide others through the most essential parts of software estimations and project planning. To get started, head over to the Example Estimate Template, make a copy of the spreadsheet and customize it with your project requirements.
Table Of Contents
- What is a Software Project Estimation?
- Why Are Software Estimates So Hard?
- Our Approach for Estimating Software Development
- Who Should Do the Estimation Document?
- Before Estimating Your Software Project
- Use Case 1: Staff Augmentation
- Use Case 2: Project-Based, with Defined Requirements
- Two Ways to Estimate Your Software Project
- Which Approach Is Better for Software Projects?
