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Software Estimation – What does it really mean?
written by amit javadekar, October 2017

The Information Technology (IT) industry is arguably the newest industry known to mankind. Serious attention was paid to computers and computing only from the Second World War (1939-45) onwards with the development of message encryption machines like the German made Enigma and the British code breaking machine – the Ultra. Consequently, as a result of its young age, the Software Engineering and Software Project Management disciplines have not matured to the same extent as their counterparts in more established industries such as Manufacturing and Construction.

The process of estimation is an important part of Project Management in every industry. While the more established industries have defined the processes, methods and tools for estimation over many centuries, in IT or the software world, estimation remains a gray area at best.

Project Managers in IT tend to assume that estimation is all about finding the cost of providing the service or building the product. This is only partially true. While cost is an important aspect, it is by no means the only parameter that needs to be estimated. This post introduces the various parameters that an IT project manager needs to estimate in most projects in order to complete the estimation exercise.

In general, size of an IT project is the quantification of the services being provided to the client. So for an application development or application enhancement project, size would be the number of application functionalities being developed or enhanced by the project. For an infrastructure support project, size would be the number of devices (servers, routers, desktops etc.) being supported.

Effort indicates the amount of work done by a project team in order to deliver the scope agreed with the client (i.e. the Size).

Duration or Schedule
As mentioned earlier, the project team undertakes various technical and managerial activities to complete a project. There is also interdependence between some activities such that one activity cannot start till another activity is fully (or partially) complete. The Duration of the project is the time taken by the team from the start of the first activity to the end of the last activity required to be performed in order to deliver agreed scope (i.e. the Size)

The cost of the project indicates how much money is spent by the project team in order to complete the project and deliver the agreed scope (size) to the client . Revenue
The revenue from the project indicates how much money it earned by completing the project and delivering the agreed size (scope) to the client. Consequently, it also indicates the money paid by the client to the project team to obtain their services.

There are many definitions of Quality, one of which is the number of defects that are passed on to the client. Estimating quality gives the project team the opportunity to plan Defect Prevention activities and make appropriate commitments to the client.

There are other parameters that might neet to be estimated before project execution.The parameters which are estimated most often are the ones described above.

In the next post we will look at each of these parameters in greater detail.