Software Costing and Estimation :1 Software Costing and Estimation Critical Estimation Concepts Chapter 1: What is an Estimate Mohammad Ayub Latif Head ISG and Asst. Prof. CS


Estimates, Targets and Commitments :2 Estimates, Targets and Commitments An Estimate is a prediction of how long a project will take and how much will it cost. A target is a statement of desirable business objective “we need to have version 2.1 ready in May, 2009 to demonstrate in trade show “ A commitment can be the same as an estimate or it can be more aggressive or conservative then the estimate. Commitment and estimates can be different. Tip “Differentiate between estimate, targets and commitments”


Relationship between estimates and plans :3 Relationship between estimates and plans Estimation is not planning and planning is not estimation. The goal of estimation is accuracy, the goal is not to seek particular result, but the goal of planning is to achieve a particular result. We bias our plans deliberately to achieve specific outcomes.


Communicating about estimates, targets and commitments :4 Communicating about estimates, targets and commitments Project stakeholders sometimes miscommunicate about these activities


Communicating about estimates, targets and commitments :5 Communicating about estimates, targets and commitments From the previous example both the executive and project lead will walk away considering that the others are irrational. The business executive was asking the team lead to come up with a plan that hits the target, more productive of the interaction could be as on next slide.


Communicating about estimates, targets and commitments :6 Communicating about estimates, targets and commitments Tip When you are asked to provide an estimate, determine whether you are supposed to be estimating or figuring out how to hit a target.


Estimates as probability statements :7 Estimates as probability statements For Example: The project will take 14 weeks. Tip When you see a single point estimate, ask whether the number is an Estimate or whether it’s really a target


Estimates as probability statements :8 Estimates as probability statements Accurate software estimates acknowledge that software projects are assailed by uncertainty from all quarters. The various sources of uncertainty means that project outcomes follow a probability distribution. You might expect that the distribution of project outcomes would look like a common bell curve.


Estimates as probability statements :9 Estimates as probability statements


Estimates as probability statements :10 Estimates as probability statements In reality there is a limit on how well a project a go but no limit on how poorly a project can go, so there should be a long tail on right side of the probability distribution.


Slide 11:11 Estimates as probability statements


Estimates as probability statements :12 Estimates as probability statements Tip When you see a single point estimate, that number’s probability is not 100%. Ask what the probability of that number is.


Common definitions of a good estimate :13 Common definitions of a good estimate “Accuracy with plus minus 10% is possible, but only on well controlled projects” “Good estimation approach should provide estimates that are with 25% of the actual results 75% of the time”


Common definitions of a good estimate :14 Common definitions of a good estimate


Common definitions of a good estimate :15 Common definitions of a good estimate


Common definitions of a good estimate :16 Common definitions of a good estimate


Estimates and Project Controls :17 Estimates and Project Controls


Working Definition of a “Good Estimate” :18 Working Definition of a “Good Estimate” “A good estimate is an estimate that provides a clear enough view of the project reality to allow the project leadership to make good decisions about how to control the project to hit its target”