Estimating Cost, Duration, Effort, etc.


Why do we need to Estimate Cost Duration and Effort?

Improved Project Estimation Accuracy results in increased effectiveness of present and future budget production and subsequent control for IT projects.

As Systems and Software Application Development & Enhancement (AD&E) and Maintenance & Support (M&S) are labour intensive, most of a project's cost is determined by the Effort expended and Duration of project

Cost - Financial estimates of cost

Cost is usually calculated from an estimate of effort and duration. Cost may be estimated directly providing a suitable database of past projects is available. Clients have for example used GIFPA to calculate the replacement cost of software; in this case past project data may not be available (as the assumption is that software will be developed externally). In order to calculate cost in these circumstances we make use of our own data and generally available industry data. Sophisticated parametric estimation models are also used to explore various cost possibilities:

  • COCOMO II - the COnstructive COst MOdel
  • PNR - the Putnam Norden Rayleigh model.

The use of a variety of approaches allows us to produce a triangulation model of the cost thus we can provide an estimate with upper and lower bounds.

Effort - Resources required to complete the project

Effort is the measure or estimate of the staff hours required to complete a project. Effort may be expressed in terms of staff months, days or years. However, it is best to express it in hours and then convert to the other expression as the length of work days months and years varies from organisation to organisation. Effort estimates do not include the non human resources required to undertake a project. So when cost is being calculated from the effort an allowance for hardware, tools and so on should also be included.

The first step in producing an estimate of effort is to obtain a measure (or estimate) of the size of the project in terms of either a functional sizing method such as FPA, or in lines of code. The estimator(s) then makes comparisons with past projects that are similar to the proposed project to arrive at an estimate of the effort. They need to utilise their experience in order to allow for project specific factors, which might influence the amount of effort required.

Duration - Schedule of project timescales

Once Effort has been established the estimated project Duration or schedule can be completed to include Start Date, Milestone Dates and End Date to provide reliable timescales so a total estimated cost for the project can be produced.

Typical inputs used to estimate duration:

  • Historical Data - existing and derived
  • Benchmarking repositories for industry wide data
    • ISBSG (International Benchmarking Standards Group)
    • QuantiMetrics Performance Enhancement Programme (PEP)
  • Collection and use of organisational in-house data
  • Measurement & Evaluation including
    • DELPHI | FPA | COCOMO II | PNR | LEAD | Analogy | Task-Based Estimation
    • Client Workshops
    • Experience to identify factors that have a major impact on the performance of a project team and distinguish it from previous projects.

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