Time to market is one of the core factors affecting the success of a product. Bringing your software to the market faster than your competitors is essential to ensuring you get the required exposure to attract the first users. Otherwise, you risk being replaced by one of the bigger market players.
Depending on the approach your software partner adopts, you might get one or several quotes which will provide you with an idea of the project cost, developers’ rates, tasks, and timelines.
Without further ado, let’s look at the most popular project estimation techniques to see what the quote comprises and how it is formed. We’ll also explain the project estimation model we use at WebbyLab.
What is Project Estimation?
In the context of the software development life cycle, estimation is defined as the process of finding a ballpark quote for a particular project even if input is uncertain or incomplete.
Simply put, project estimation is a forecast that shows how much effort should be allocated to build a product or complete a particular set of tasks.
Many confuse an estimate with a budget, but they are two different yet interrelated concepts. A software vendor runs the numbers and provides a client with a ballpark quote using estimation techniques adopted in a company. After that, the two of them negotiate the terms and the project scope, as well as define an optimal budget for the project.
Typically, when potential clients come to us with just an idea and big plans, we try to figure out the details and lay out the priorities and business goals. Next, we write down all the user stories/functionality and based on this, adjust the scope of tasks and estimate the project.
We really appreciate those clients who come to us prepared, with preliminary design/sketches personas/roles, user stories and a clear vision.
At this stage, we’re also researching competitors and existing solutions on the market, while trying to ascertain the business side of the client’s product (market, users needs, etc). Our experience allows us to offer a rough estimate when the functionality is clearly defined.
Top 4 Estimation Techniques in Project Management
This is one of the most popular and widespread types of estimation methods applied by software development companies. We use a three-point estimation approach at WebbyLab, too. According to it, based on the statistical data, we break down the project into tasks/functionality/backend/frontend/design and come up with relevant timelines, rates, and costs for each phase.
What’s particular about this approach is that it involves the development of three types of estimation:
- Optimistic Estimate. This figure provides a customer with the best-case scenario in which nothing goes wrong and all criteria are met.
- Most Likely Estimate. This project estimate reflects the most likely scenario where everything goes smoothly except for minor issues and delays.
- Pessimistic Estimate. The worst-case scenario in which some problems might occur and changes are added to a product. Usually, this kind of estimate includes a risk level of development.
The three-point estimation technique also takes into account standard deviation and variables to ensure a client has a full picture of the time and costs that might be necessary to complete a certain project.
To ensure that we give clients an accurate estimate, we always suggest that they go through a discovery phase. It usually takes us 2-3 weeks and costs around 10% of the total budget.
At this stage, our team of specialists — represented by a project manager, a designer, a business analyst, and a solution architect — take a deep dive into the product to develop system requirement specifications and create a preliminary UX prototype. Such a complex approach involving comprehensive estimation methods enables our team to come up with the most accurate estimate and ensure we stay with a client on the same wavelength.
Work Breakdown Structure (WBS)
Work Breakdown Structure is another popular type of estimation that means breaking a project into smaller, manageable units and composing them into a clear hierarchical structure.
This project management technique separates the projects into smaller units, making it more comprehensible for all parties involved in the software development project. When estimating the cost and timelines, the team usually goes through the following steps:
- Make a list of high-level deliverables. When you start working on a project, the first thing that needs to be done is to define the project scope. Based on the complexity of a product and its functionality, a project manager can define the core deliverables and move on to the next stage.
- Develop a list of tasks for each deliverable. Once you have a list of deliverables, it’s time to break them into tasks and identify what needs to be done to reach the expected result.
- Think about subtasks. The tasks are broken into smaller subtasks with their own deadlines and assignees.
- Organize project tasks and subtasks into a comprehensible unit. As a rule, most Work Breakdown Structures are organized in the form of sitemaps. But if you want to be creative, you can do it in the form of an infographic, flowchart, etc.
- Develop an estimate. When you have a helicopter view of the project’s tasks and subtasks, you can create an accurate estimate by setting the deadline for each unit, assigning specialists, and calculating costs.
Functional Point Method
This estimation method is fully based on the functional peculiarities of a software product. In contrast to other types of estimation, the framework is developed regardless of the technology, programming language, or capacity of the future application.
A project manager develops a list of functions and divides them into three groups: complex, medium, and simple. After that, a specialist rates each function and gives weightage to each functional point. Once a project manager is done with these tasks, a total project estimation is developed.
The Delphi Technique is one of the core types of estimates in project management that allows the collection of quantitative and qualitative data. The approach involves conducting a set of surveys among tech experts until the final estimate is developed.
This process might be implemented in several rounds with the aim to gather feedback about a particular product or task. When the data pool is formed, a project manager analyzes the information and creates an accurate estimate for a client.
Get a Quote for Your Project Right Now!
As you already know, at WebbyLab, we use a three-point estimation approach as one of the most trusted software estimation techniques to ensure our clients have a helicopter view of their project and can set an optimal budget.
If you have an idea for your software but are not sure which resources you need, contact us and we’ll prepare a ballpark quote tailored to your needs and business objectives!