What are the best practices for software estimation?

1 Understand the purpose

Before you start estimating, you need to understand the purpose of your estimation. Are you estimating for feasibility, budgeting, planning, or tracking? Different purposes require different levels of accuracy, detail, and confidence. For example, if you are estimating for feasibility, you may use a high-level approach based on historical data or analogy. If you are estimating for planning, you may use a more detailed approach based on functional decomposition or bottom-up estimation.

2 Choose the right method

There are many methods for software estimation, such as expert judgment, analogy, parametric models, functional decomposition, bottom-up estimation, and top-down estimation. Each method has its advantages and disadvantages, depending on the project size, complexity, and uncertainty. You need to choose the right method for your project, based on the available information, the estimation purpose, and the stakeholder expectations. You may also use a combination of methods or adjust your method as the project progresses.

3 Use multiple sources

One of the common mistakes in software estimation is relying on a single source of information or a single point of view. This can lead to bias, overconfidence, or underestimation. To avoid this, you should use multiple sources of information, such as historical data, industry benchmarks, expert opinions, or customer feedback. You should also involve multiple stakeholders, such as developers, testers, analysts, or users, in the estimation process. This can help you gain different perspectives, validate your assumptions, and reduce uncertainty.

4 Manage uncertainty

Software estimation is not an exact science, but a probabilistic process. There is always some degree of uncertainty in software projects, due to factors such as changing requirements, technical complexity, human factors, or external dependencies. You cannot eliminate uncertainty, but you can manage it by using techniques such as contingency planning, risk analysis, sensitivity analysis, or scenario analysis. These techniques can help you identify the sources of uncertainty, quantify their impact, and prepare for possible outcomes.

5 Communicate clearly

Software estimation is not only a technical task, but also a communication task. You need to communicate your estimation results clearly and effectively to your stakeholders, such as clients, sponsors, or team members. You should explain the assumptions, methods, and data sources behind your estimation, as well as the level of confidence and accuracy. You should also use appropriate formats, such as ranges, charts, graphs, or tables, to present your estimation results. Moreover, you should update your estimation regularly and communicate any changes or deviations.

6 Learn from experience

Software estimation is a learning process, not a one-time activity. You can improve your estimation skills by learning from your experience and feedback. You should track and measure your estimation performance, such as the accuracy, variance, or error rate, and compare it with the actual project performance. You should also conduct post-mortem reviews, lessons learned sessions, or retrospectives to identify the strengths and weaknesses of your estimation process, and implement improvements for future projects.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?