What you Need to Know About Time Estimation in Software Development

Time estimation is an important skill for software developers, a nightmare for project managers, and just as opaque for customers. Why such a situation? Let's take a look! 

What is time estimation?

Time estimation is an estimate of the number of hours required to complete a task or series of tasks. The better you understand the features and nuances of the work, the more accurate estimates of time you can get.

3 main stages of software evaluation:

1. Estimation of product size for development
2. Estimation of effort in man-months/man-hours and schedule in calendar months
3. Estimation of the project cost in money

Time estimation plays a very important role in software development, because without it you will not be able to estimate the duration and cost of a software development project.

Why you need time estimation in software development

If you want to correctly calculate the time and material costs of the project, not lose money and time during its implementation, you need to know how much time and how much effort you need to put into this project. 

Let's take a look at why proper a time estimate is so important:

• Underestimation of time and effort can lead to the fact that you will offer a job at a price that will only bring you losses.
• If you overestimate the time and effort, it can lead to the fact that you will not get the project. One of your competitors who calculated more accurately can receive this project.

As a result, try to objectively and realistically assess your abilities. It will help you to determine as accurately as possible the time and material costs required to develop the project. 

Why time estimations go wrong

Let's look at the main reasons why software development time estimations can go wrong:

1. Negligence. Not enough attention was paid to the project estimation
   
2. Difficulties are underestimated. It is impossible to anticipate all the problems and obstacles in the development and estimate the time frame. However, you should include extra time for problem-solving into account
   
3. Customers’ restrictions and unrealistic time frame
   characteristics. Project managers and project staff are pressured by specifications like requirements, goals and time frames. Sometimes it can lead to polite estimates of time and costs that later cannot be made.
   
4. Too much optimism. "Pink glasses" combined with avoidance of conflict often lead to unrealistically optimistic assessments

Tips based on our experience: projects can often take longer and can be more expensive than planned, so estimate your time correctly. 

How to avoid incorrect time estimations

You need to make the most accurate and reliable estimate of time and material costs. But the more precisely you want to do it, the more effort is required, as well as extra time. Prepare well, use the most qualified evaluators and act systematically.

Best practices for time estimation 

In order to achieve reliable time estimates, you need to remember these two things:

1. Personal experience. Your experience is your best friend who will tell you what to do best and what mistakes to avoid.
   
2. Analogy. If you or your competitors have done similar projects, you need to rely on time and material costs for similar projects.

Also, there are many practices and methods that are actively used in time estimation. The most important factors that affect the accuracy of time estimates are:

• Accurate evaluation of all input data;
• Accuracy of all calculations;
• Maximum proximity of historical data or industry data;
• Predictability of the software development process;
• Stability of product requirements.

The best 4 methods for time estimation in software development

Method of comparison: Use the experience of previous projects

The method of comparison or analogy is based on the systematic recording and evaluation of the experience of previous projects. The quality of experience-based evaluation is better than the quality of purely intuitive evaluation.

Key figure method: Create your own system

There are certain key indicators available for different types of projects. They have been identified many years ago by specialists with a lot of experience in this industry. The main advantage of this method is that with the help of such key indicators it is possible to quickly and easily estimate the expected overall effort. 

Using the bottom-up method for a detailed assessment

The bottom-up method takes a relatively long time but provides a good assessment of quality. Due to the high level of detail on every stage, you can create a detailed project plan, which you can use at the implementation stage to manage projects. This approach requires a work division structure with the required level of detail and appropriate workflow descriptions.

Team evaluation: Difficult but high-quality evaluation

Practical experience shows that the quality of group assessment is much better than the individual. Therefore, when possible, you should involve your employees and colleagues.

"In particular, for large and risky projects, you should pass the evaluation test according to the Delphi method. In order to be able to evaluate bottom-up, you must have a work-sharing structure with detailed descriptions of work packages based on clear project objectives", - comments Nelia Kovbasa that helps startups with their projects and software development in GTM Plus.

Conclusion: why it is important to estimate time correctly

Time estimation plays a particularly important role in the project planning process. Remember that you should:

• Allocate sufficient resources to properly manage the time estimate and obtain all the data needed for the most accurate forecasting
• Structurize the work unit and project scope information.
• Analyze external risks that may prevent the desired results from being achieved in a timely manner.
• Analyze internal risks, including potentially inaccurate budget estimates and their possible impact on the project schedule.

The keys to estimating time correctly are using strong evidence, avoiding overly optimistic assumptions, and taking into account uncertainty.

Also published on: https://dzone.com/articles/time-estimation-in-software-development-what-shoul