A Complete Guide on Software Development Time Estimation

  • January 16, 2023
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A Complete Guide on Software Development Time Estimation

Whenever a software development team begins a new project for a client, the client often requests that the team estimate the length of time it will take to complete the project.

However, it’s not as quick and simple as it may appear to estimate time for software development. Complex projects often take longer than expected, negatively affecting the budget, revenue, market potential, and software development provider.

In order to accurately estimate the time required to effectively complete the project and achieve the quality standards established by your clients, it is necessary to have a thorough grasp of every aspect of your software development project. There is labor, capital, and a whole lot more.

Project managers must therefore use a methodical approach to determining a project’s duration in order to prevent these undesirable results. 

Below, we outline the methodology, tools, and strategies for software development time estimation that project managers can perhaps employ.

What Is Software Development Time Estimation?

Project Duration and Task Estimations – Image Source: Nenad Trajkovski

Software development time estimation is the amount of time needed to carry out a client request or project. The estimate for the entire project is the total amount of time required to implement all the requirements.

The assessment of software development time takes into account the distinct methods and procedures used by the software development firm to perform jobs. 

This calls for the use of sophisticated tools and solid mathematical training. An error margin of between five and ten percent is required for a software development time estimation to be deemed accurate. 

Such a project requires a sizable initial time and financial commitment, but it pays off with a stronger product that meets the demands of its clients.

Why Software Development Time Estimation Is Important

As we’ve seen above, software development time estimation is the process of estimating the time needed for a developer to finish a particular project.

The key to avoiding time and money losses during the implementation phase is to precisely estimate the project’s duration.

According to a study done in 2018 by the Project Management Institute with 5,402 experts, 25% of projects fail as a result of inaccurate time estimation.

Time Estimation Statistics – Image Source: actiTIME

In fact, underestimating time might result in financial loss. While underestimating the required time and effort may result in you losing the project. 

There are a few reasons why estimating development time is important.

For customers:

It gives information on the roughly necessary time to finish the job. Particularly for initiatives with severe deadlines, this is crucial. They are able to see the whole extent of the job and choose the launch date appropriately.Time estimation offers information on the development’s likely price range and if it meets the spending plan as it is.If the customer is outsourcing agile methodologies, the whole process will be as transparent as possible.It enables both sides to manage financial expectations As the customer is aware of the budget’s best as well as worst-case scenarios.

For a company that develops software:

They are aware of their priorities. Setting appropriate timeframes and defining the project’s scope within the team is beneficial.They may allocate resources in accordance with the projected timeline. By evaluating the amount of time, they may determine the ideal number of developers required to complete the task in accordance with the contract and on schedule.Whenever they are multitasking, they are aware of the considerable time to devote to each activity.Time estimation also helps in calculating planning KPIs and business metrics such as CAC or customer acquisition cost.

As we’ve seen above, good estimation benefits all stockholders to some extent. It aids in the formulation of wise objectives and expectations for each step of project development and management by agile teams, managers, and other relevant parties. 

However, making one is a difficult undertaking.

Let’s go further into the key elements that contribute to the difficulty of software development time estimation.

Why Do Software Estimations Go Wrong?

Whenever a new criterion is added to the original requirement, estimations will vary, making software development a little more challenging. Estimations go wrong, and expenditures go beyond the budget.

What challenges put software development time estimations in jeopardy? 

We’ll discuss a few things that make it difficult for software development companies to estimate how long a project will take.

a. Developer Availability and Unforeseen Issues

No developer is completely safe from unanticipated problems with performance, frameworks, the environment, application programming interface integration, architectural flaws, and other concerns.

Unexpected problems, however, don’t only concern the technological aspect. Every one of us is a human being who is susceptible to illness, emergencies, and other things.

Your chosen software development agency can be experiencing a crisis and be short on developers. In such circumstances, plan for a project delay.

b. Identified Personal Attributes

Due to the specific peculiarities of the developer, it could be challenging to estimate the time required for the whole software development project. 

Each developer will operate at a different speed based on expertise, education, overall productivity, and even current mental or physical well-being.

c. Constant Changing Business Requirements 

It is quite challenging to conform to the estimations since company requirements are always changing. 

Business Requirements Document – Image Source: AltexSoft

Because of this, your goal should be to create a business requirements document (BRD). Everything that slightly deviates from the requirements and necessitates re-development will demand more time to create.

d. Unanticipated Client Changes

Considering modifications might often occur from the client’s side as well, it can be challenging to estimate software development projects correctly. For instance, you choose to add a new feature or, on the other hand, eliminate certain features that the client intended.

Tips and Techniques for Software Development Time Estimation

Despite everything we’ve said above, estimating time accurately while developing software is still feasible. 

Let’s examine several techniques for software development time estimation.

1. Define the Complexity of Your Project

Determining the complexity of the project is the initial step in estimating the time required for software development.

The complexity of any software project should be taken seriously, and you should be aware of the amount of risk associated with its creation. You should classify projects into the following three categories:

i. Well-Known

This part entails developing straightforward software with known requirements, like a simple customer interface for a small business.

One of the main reasons projects fail, according to a study by FinanceOnline, is incorrect requirement gathering. Here, estimations will be the most precise, and risks will be the least.

ii. What Can Be Known

Creating software that is fundamentally predictable yet certain needs require further research.

Creating a straightforward customer database and connecting it with Enterprise Resource Planning (ERP), for instance. Small risks are thus likely at the moment of integration.

iii. Complex

Development sometimes incorporates cutting-edge or specialized technology as well as ambiguous business needs, like in the case of developing bespoke software based on Agile methodology. This endeavor is a breakthrough with significant risks and an uncertain timescale.

Determining the software project’s complexity is thus very helpful to the business since it allows you to evaluate how much time and risk should be devoted to it.

2. Create, and Estimate the Scope of the Work

You should create the scope of work that encompasses software needs and then evaluate each requirement if you want an accurate assessment of the time needed to develop software.

Don’t forget to consider the software development approach or methodologies that your project employs.

i. Traditional (Waterfall-Like) Approaches

Projects using traditional methodologies don’t need much altering since they follow a sequence. This strategy makes the assumption that although requirements are flexible, time and cost are not.

They have strict criteria that never change. Start by breaking down the system needs into manageable, easy-to-estimate bits of tasks. 

We suggest using the Work Breakdown Structure (WBS), a project management methodology that employs a sequential process to execute complex projects with many moving parts.

A WBS may combine scope, cost, and deliverables within one tool by segmenting the project into smaller parts.

After finishing the WBS, go on to estimate the duration of the jobs in it. Implement the following techniques:

ii. Analogy

This is a method for calculating the time or expense of a project or activity utilizing previous data from a related activity or project.

The term “analogy” comes from the process of applying values from earlier projects with a similar scope to the present project in order to produce comparable project estimates. 

The comparable estimating approach makes use of examples from previous project activities and results because examples help people grasp ideas and plans better.

You’ll be able to identify the activities that might affect the timeline if you discover a discrepancy between the estimations and the actual time spent on the prior projects. Therefore, more time and managerial effort should be spent on them.

iii. Wideband Delphi

The number of work days or weeks required to create a certain system or the number of lines of code may both be estimated using Wideband Delphi.

Below is an illustration of the process flow for a Wideband Delphi session.

Wideband Delphi Process Flow

Wideband Delphi Process Flow – Image Source: IBM Corp.

The bottom-up effort, as well as the schedule or size estimate, is supported by a precise task breakdown structure that you may create using the Delphi technique.

A vision document, a more thorough requirements definition of the actual problem being estimated, an initial high-level architectural description, a project timetable, or any combination of these might serve as the preliminary step for a Delphi session

b. Agile Methodologies

The agile methodology requires far less preparation to launch a project than the waterfall methodology does. In a fast-paced business and IT environment, agile methodology presupposes that end-user demands are always shifting.

Based on user input, features may be added, changed, or eliminated. In essence, the client receives the completed system they want or desire in this way.

So, the workload is determined by the importance of end users. This implies that a feature will be built more quickly the more value it offers. The scheduled tasks are also shown in the backlog in accordance with their priority.

In addition, it is advised that when it comes to Agile projects, it is preferable to estimate efforts rather than time. Additionally, you may draw attention to how much work each unit requires from the user.

Additionally, it is advised: You begin by estimating a sample’s complexity. 

For instance, let’s say you are signing in through a website. And offer your team important feedback. Everyone may thus use it as a benchmark when estimating software development time.

The project team members would benefit from you going over the backlog so they could gauge the difficulty of each job so that the team may debate this appropriately.

3. Add a Risk Buffer

“Risk buffering is the creation of some reserve or buffer that can absorb the effects of the many business risks that construction project owners must accept without jeopardizing the project.”

An example is a contingency for a project.

The provision of extra time for the project’s completion may also be considered buffering. However, the risk that such firms can encounter—and which is often overlooked—is the possibility of falling short when it comes to using the project’s cost as well as schedule buffer.

A properly set up, monitored, reviewed, and reported contingency lowers the possibility that the project will run out of funding before it is finished.

To prevent typical risks, you should include a risk buffer of 5-25% of the total project duration, depending on the complexity of the project:

Some of these typical risks include:

Problems or issues that are difficult to predict, such as integration problems and software breakdowns, when a user base continues to expand.The uncertainty of emerging technology, such as a customer’s desire to utilize a third-party application programming interface.Team conflicts can hinder productivity, such as when two senior engineers with diverse backgrounds have opposing views on the same issue.

4. Make Room for Tasks That Consume Time

The development time includes more than just the breadth of the task; you also need to account for time wasters that are difficult to predict and difficult to manage.

Communication gaps involving team members and absentees are examples of time-eaters.

To account for numerous “time eaters” like team meetings, closing communication gaps, productivity decreases, etc., add at least 20% more time to the project.

The project team only spends 55% of its time actively creating, according to Mickey W. Mantle and Ron Lichty’s book “Manage the Unmanageable.” 

The remaining 45% is spent on discussions with project managers and coworkers, evaluating the code, doing research, etc.

5. Calculate the Project Duration

The last step is to gather all of your information and divide the project into sprints. By combining the results of the stages above, you’ll arrive at the following formula:

Project duration = overall task time estimation (E) + E*risk buffer + E*time eaters.

Therefore, if a project’s estimated total work time is 10,000 hours, the project’s overall duration will be:

10,000 + 10,000*0.25 + 10,000*0.20 = 14,500 hours.

Useful Tools for Project Time Tracking

Let’s wrap up by looking at some of the helpful tools for project time tracking.

1. Jira

Jira is a tool designed with this set of experts in mind. Despite not being a time-tracking program in the strictest sense, it is a very effective tool for tracking software development or implementation activities, including time and resource management, project phases, and reporting.

2. Trello

Trello Boards – Image Source: Trello

Project management and task tracking are both made easier using Trello. The tool, which consists of a board with tickets, is very easy to use and provides developers with a clear grasp of the statuses of the tasks.

3.Paymo

For small and medium-sized companies, Paymo is an online tool for time tracking, project management, as well as invoicing. 

It enables you to manage a project’s lifecycle without the use of any other software. It is software that has a lot of assets and is cheaply priced.

4. Toggl

Toggl is the ideal tool for you if you like straightforward solutions. 

Toggl Track – Image Source: Toggl

This timer tool is often praised for being the most simple time monitoring tool available. Its characteristics are nonetheless somewhat constrained.

5. TimeCamp

Free time monitoring software with an infinite user base. It is appropriate for agencies, small and big businesses, and independent contractors. 

TimeCamp reports your workers’ monitored time and generates a correct payroll list depending on tracked time and hourly rates, whether they choose fixed or flexible employment.

6. Todo.vu

This program combines functionality for project management and time tracking. Todo.vu counts the time spent on all of your activities, just as TimeCamp does. 

It focuses mostly on project specifics like establishing personnel and project billing rates, breaking down bigger tasks into smaller checklists, or labeling work according to unique categories.

Conclusion

The size of the program and the functionality and features it includes will determine how long it takes to develop.

It is essential to look at prior experience as well as historical data for a project of a similar kind for a bespoke software development firm. Be reasonable with your estimation. Recognize that each of your developers has limits. Prioritize your duties and activities.

You can be confident that your software development time estimation is reasonable and that it will help your project remain on schedule by using the procedures indicated above.

The procedure of documenting project time may not be simple either. You may use the tools indicated above, but keep in mind that each one is unique. Selecting the appropriate tool should be simple if you are aware of your organization’s demands as well as those of your personnel.

NaenMedia is a leading web development company in India offering all kinds of web design and development solutions at affordable prices. We are also an SEO and digital marketing agency offering inbound marketing solutions to take your business to the next level. For further information, please contact us today.
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