4.1 Effort Estimation

For a software development project, overall effort and schedule estimates are essential prerequisites for planning the project. These estimates are needed before development is initiated, as they establish the cost and schedule goals of the project. Without these, even simple questions like “is the project late?” “are there cost overruns?” and “when is the project likely to complete?” cannot be answered. A more practical use of these estimates is in bidding for software projects, where cost and schedule estimates must be given to a potential client for the development contract. (As the bulk of the cost of software development is due to the human effort, cost can easily be determined from effort by using a suitable person-month cost value.) Effort and schedule estimates are also required for determining the staffing level for a project during different phases, for the detailed plan, and for project monitoring.
 

The accuracy with which effort can be estimated clearly depends on the level of information available about the project. The more detailed the information, the more accurate the estimation can be. Of course, even with all the information available, the accuracy of the estimates will depend on the effectiveness and accuracy of the estimation procedures or models employed and the process. If from the requirements specifications, the estimation approach can produce estimates that are within 20% of the actual effort about two-thirds of the time, then the approach can be considered good. Here we discuss two commonly used approaches.