Estimating software development costs is a difficult process, but is an important part of starting a software development project. Companies need to have the resources to finish the project, but cannot divert all of their funds to support it. A good cost estimate makes it easier for a company to plan within its budget and make sure that the project is finished successfully.
However, there are many ways to mess up the cost estimate. Here are 7 ways to avoid software development cost estimation mistakes in 2022.
Use the Right Production Metrics
The selection of metrics for a project can affect the accuracy of the production estimate. Some metrics may be more accurate than others, depending on the type of project.
Some of the metrics you should include are:
- [Resource] cost per hour
- Hours to completion
- Launch costs
- Testing costs
Every factor that can adjust the overall cost of development should be tracked and considered. Failure to include factors with high costs can make your estimations very inaccurate.
Define the Scope of the Project First
The scope of the project is a key part of software development cost estimation. If you add unnecessary features to the project, you will increase the cost of the project.
It is important to define the scope of the project in detail. Make sure that you discuss any additional features that are needed, but that do not fall under the original project description.
Discuss the Project With All of the Stakeholders
All of the stakeholders have a significant role in software development cost estimation. Make sure that you discuss the project with all of the stakeholders, such as the client team, the project manager, and the developers. This will help to clarify the project details and any misunderstandings.
The stakeholders can also help to identify any potential risks that the project may face. Even if the project is not likely to encounter the risks, it is important to know about them. This makes it easier for the stakeholders to make changes to avoid these risks or to mitigate them if they occur.
Be Realistic About Production Time
Make sure that you are realistic about the production time for the project. Be aware that some of the factors that will affect the production time are outside of your control, such as the time needed to test the project.
You can also affect the time that the project takes by assigning tasks to the team members effectively. This will help the team to work more efficiently and complete tasks sooner. The team members can also help to identify ways to improve the project, such as the use of the right methodologies.
Know Who is On Your Development Team
You should know who is on your team because their experience will affect the production estimate. If you have a team that has worked with the technologies for the project, you will likely complete the project sooner than if you have a team that does not know the technologies.
If your team members are new, you may need to add time to the estimate for training. The team members can also help to identify potential risks, such as if they think that they do not have the right tools on the project.
Add a 20% Buffer to the Estimate
The company must have a contingency plan in case the project takes longer than expected. Make sure that you add a 20% buffer to the production estimate. This will allow you to avoid having to use other resources to finish the project, such as hiring more developers.
If the project goes over the estimate, you can use the contingency funds to finish it and avoid over-budgeting.
Expect Hidden Costs
There are many hidden costs that are not part of the software development cost estimation. Make sure that you are aware of all of the expenses on the project. These hidden costs can include the costs for test servers, the licensing for third-party software, and support for the project.
These costs can add up, which is why it is important to include them in the software development cost estimation. By avoiding these mistakes and following these tips, you will be able to come up with a more accurate software development cost estimation.
Get Help to Avoid Software Development Cost Estimation Mistakes
One of the easiest ways to avoid mistakes in software development cost estimation is to work with an expert that can price your project and help you reduce costs through development. The estimated cost of poor software development quality can be much higher than getting it right the first time. Partner with KitelyTech by calling us at (800) 274-2908 to schedule a consultation. We can help you avoid estimation cost problems.
