Software Development Time Estimation Everything You Should Know! (1)

What does it take to estimate the time for a software development project? Well, there are many factors to consider, such as the project’s complexity, the development team’s experience, etc. 

Software Development Time Estimation Everything You Should Know! (1)

Project managers, business analysts, software development team members, and even end customers should know how to estimate the time for a software development project. 

Today in this blog, we’ll look at everything you need to know about software development time estimation. So, let’s get started!

What is Software Development Time Estimation? 

Software development time estimation predicts the most realistic time required to complete a software development project. The goal is to estimate the effort required and then allocate resources accordingly. 

Why Do You Need Software Development Time Estimation? 

Why Do You Need Software Development Time Estimation

Software development time estimation is essential because it helps project managers (and business owners) allocate resources and plan for the project. Apart from this, there are several other benefits of having an accurate estimation which is as follows:

  • Helps in Better Decision-Making: An accurate estimation of software development time also helps in better decision-making. For instance, if a project is running behind schedule, the project manager can make informed decisions about whether to cut corners or allocate more resources to get the project back on track. 

Similarly, if a project is ahead of schedule, the project manager can decide whether to put extra effort into polishing the product or release it as is. 

  • Offers Effective Resource Allocation: An accurate software development time estimation also facilitates effective resource allocation. Project managers can identify the tasks that require more resources and plan accordingly. This helps ensure that all tasks are completed within the allocated budget and timeline. 
  • Helps Avoid Scope Creep: One of the significant advantages of having an accurate software development time estimation is that it helps avoid scope creep. Scope creep is a process wherein a project’s scope keeps expanding without any corresponding increase in budget or timeline. 

This often leads to projects going over budget and beyond their deadlines. An accurate estimate prevents this by providing a clear picture of the work and the required resources.

  • Improves Customer Satisfaction: In many cases, customers are not concerned with how long it takes to develop a piece of software but with the final product’s quality. However, there are instances where customer satisfaction is directly equal to development time. 

For example, suppose a customer needs a specific feature urgently, and the developers estimate that it will take several weeks to implement. In that case, the customer will likely be unhappy with the delay. 

On the other hand, with an accurate estimation, the customer can have a precise analysis of the project’s progress. They will likely be more satisfied with both the process and the final product.

But what If you don’t take the time to estimate a software development project? You can face five possible repercussions: 

  • The project could take much longer than expected, leading to higher costs and potentially missed deadlines. 
  • The final product could be of lower quality than expected and require more maintenance.
  • The project team could become frustrated and demoralized, leading to high turnover rates and further delays. 
  • The client could become dissatisfied with the product or the process, leading to negative publicity for the company. 
  • The company could lose out on future business opportunities if clients perceive that it cannot deliver quality products promptly.

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Why is It Tough to Estimate Software Development Time? 

Many factors can contribute to the difficulty in estimating software development. Here are some of them:

  • Lack of Experience in Software Development: Most people who are not experienced in software development find it difficult to estimate their projects. This is because they need more skills and knowledge to do so. 
  • Less Understanding of the Project: It is also challenging to estimate software development because people often need a clearer understanding of the project. This can make it tough to identify all the tasks that need to be completed and determine how long each task will take. 
  • The Complexity of the Project: The complexity of a software development project can also make it difficult to estimate its cost and duration. This is because different factors often need to be considered when calculating a project. Some of these factors are the number of features, the size of the codebase, and the rate of change. 
  • Uncertainty About Future Changes: It can take time to anticipate how a software development project will evolve, especially if there are plans for future changes or additions to the system. This uncertainty can make it challenging to provide an accurate estimate upfront. 
  • Dynamic Nature of Software Development: The final reason why estimating software development can be problematic is because of the dynamic nature of software development. By its very nature, software development is constantly changing and evolving. 

This means that any estimate made at the project’s beginning is likely to be inaccurate when the project is completed. This doesn’t mean that estimation is impossible, but it does mean that it can be more complex than other types of projects.

Software Development Estimation Techniques 

1. Estimation by Analogy

Software Development Estimation Techniques

The first step in any software estimation project is to identify the problem or needs that need to be addressed. You can do this through interviews, surveys, or other research methods. 

Once you identify the needs, develop a baseline estimate using various methodologies. Some popular baseline estimating methods include:

  • Functional requirements specification (FRP) 
  • Use case analysis 
  • System development life cycle (SDLC) 
  • Planning studies 

After developing the baseline estimate, create a starting point for more detailed calculations based on specific implementation scenarios or use cases. The following estimation methodologies can also be used in conjunction with baseline estimating:

  • Performance achievable by design (PABD) 
  • Levelized cost of ownership (LCOO)
  • Value-based purchasing (VBP) 

2. Bottom-up Estimates

Software Development Estimation Techniques

Bottom-up estimating is a process in which the estimated cost of a project is derived by calculating the costs of each project element. This type of estimation is typically used when the detailed requirements for a project are not known or when there is no agreed-upon methodology for estimating project costs.

There are many factors to consider when performing bottom-up estimating:

  • The complexity of the project
  • Project dependencies
  • Uncertainty about future costs
  • Changes in technology
  • Team capacity and skills 

3. Project Evaluation and Review Strategy or Three-Point Estimates

Project Evaluation and Review Strategy or Three Point Estimates

The three-point estimate is the most common estimation methodology used in software development. It involves estimating how much work will be required to complete a project, assigning a dollar value to each task, and calculating its total cost.

4. Parametric Estimating

Probabilistic Parametric Estimate

Parametric estimating is based on an estimation model that considers various factors, including the number of features, defects, lines of code (LOC), and test cases.

The most common parametric estimating method is the step-wise method. This method begins by estimating the smallest amount of work necessary to complete a task and then progressing toward more complex tasks. 

Another type of parametric estimating is the hybrid approach. This approach combines elements of both step-wise and linear regression methods. The hybrid strategy allows for greater accuracy but requires more time to generate an estimate.

How to Estimate Software Development Time Accurately? 

As discussed, estimating the software development time is a challenging task. Various factors can impact the accuracy of your estimate, making it difficult to get an accurate picture of how long a project will take. However, there are some tips and techniques you can use to improve the accuracy of your estimates. 

Define the Project 

One of the first and most essential steps is defining the project. This will help you and your team understand what needs to be accomplished and how long it will take. The estimate will likely be off if the project is not well-defined. 

You can do this by creating a project roadmap or requirements document. Here are some questions to consider when defining the project:

  • What is the purpose of the software? 
  • Who will be using it?
  • What features does it need to have?

Also, consider any external factors that could affect the project, such as third-party integrations. 

Prepare Your Task List

Once you understand the project well, you can start creating a task list. This will help you know the individual steps and how long they will take. 

Be sure to break down each task into smaller, more manageable pieces. It is crucial to be as detailed as possible when creating your task list so that you can accurately estimate the time each step will take. You can use a project management tool like Trello or Asana to help you with this. 

Choose an Execution Team

Now that you better understand the project, it’s time to choose a dedicated development team. This team will complete the project on time and within budget. 

Selecting the right team members for the job is essential, as incorrect selections can lead to delays or cost overruns. Software development companies offer a wide range of services, so it is vital to research before selecting a team. 

Some factors to consider when choosing an execution team include the following:

  • Skillset: Check whether the team members have the necessary skills to complete the project. They should deeply understand the software development process.
  • Location: Ideally, the team should be close to the project’s target market. This will reduce the amount of time needed to get feedback from users.
  • Team Dynamics: It is crucial to ensure that team dynamics are positive and supportive. Team members must be on board with each other to avoid delays or conflict.
  • Prior Experience: If you have access to past projects that the execution team has worked on, it can help make an accurate estimate. However, be sure to factor in any changes or updates made since then.

Monitor Progress Throughout Development

It is crucial to monitor progress closely to ensure everything is on track. This includes setting milestones and checkpoints at which progress will be measured. 

If problems arise, they can be addressed before they cause significant delays in development. Remember to consider the time required for testing. It is essential to thoroughly test the software before releasing it, which can often take longer than expected. 

Make sure to allocate enough time to the testing schedule to resolve any issues without impacting the timeline. 

Be Realistic in Your Estimates

It is essential to be realistic when estimating how long it will take to develop software. If you underestimate the time required, you may end up rushing development and compromising quality. 

On the other hand, if you overestimate the timeline, you may find yourself with unused resources and extra costs. Estimating is crucial to ensuring a successful project. 

Consider the entire process when estimating software development time; you should consider every stage of the process, from planning to testing. This includes research, design, coding, debugging, and deployment time. 

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Software Development Effort Estimation Tools for Your Next Development Project 

There are several tools available to help you with this task. Here are 10 of the most popular: 

  • PERT Chart: A PERT chart is a graphical tool used to estimate the duration of a project. It is often used in conjunction with other estimation techniques, such as bottom-up estimation. 
  • Gantt Chart: A Gantt chart is another graphical tool that can be used to estimate project duration. It is similar to a PERT chart, but it provides more detailed information about the individual tasks involved in the project. 
  • Work Breakdown Structure (WBS): A WBS is a tool that helps you decompose a project into smaller, more manageable tasks. This technique is often used in conjunction with other techniques, such as bottom-up or parametric estimation.
  • Functional Point Analysis (FPA): FPA is a measurement method that estimates the effort required to develop software based on its functional size. It’s commonly used in information technology (IT) organizations to measure the size of software projects and to track productivity.
  • COCOMO II: COCOMO II is an estimation model that predicts the effort required to develop software based on a project’s size, complexity, and other factors.
  • Microsoft Excel: Excel is a spreadsheet application used for various purposes, including estimating the time required to complete a software development project.
  • TaskJuggler: TaskJuggler is an open-source project management tool that can be used to create detailed schedules and estimates for software development projects.
  • Apache OpenOffice: OpenOffice is a free office suite with a spreadsheet application that can estimate the time required to complete a software development project. 
  • ProjectLibre: ProjectLibre is another free office suite with spreadsheet capabilities that can be used for making time estimates for software development projects.

Also Read: How To Outsource Software Development Effectively


That’s all for this guide! We hope you’ve found all the information needed to help you estimate software development time. If not, feel free to contact us for more assistance. 

Keep in mind that estimating is an ongoing process, and the only way to get better at it is through practice. Also, it is recommended to hire software developers with excellent portfolios to save you time and money.

Frequently Asked Questions

What are different software development time estimation methods?

There are many different software development time estimation methods available, each with its own strengths and weaknesses. Here are a few of the most common: 

  1. Fatigue analysis 
  2. Expert panel estimating 
  3. Simulation modeling 
  4. Activity-based costing 
  5. Value-add approach

What are the tips for improving software development time estimation?

  • Be realistic about how long it will take to complete the project.
  • Make sure you understand what your project is supposed to accomplish.
  • Use accurate tools and techniques to measure the time required to complete projects.

What are some factors that can impact software development time estimates? 

Many factors can impact software development time estimates. Some common factors include changes in scope, unexpected risks or challenges, and inadequate resources.

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