Effort estimation in IT – a blessing or a curse?

The financial planning of software development projects is at least as important as it is a much-discussed topic. The focus is always on the often extensive cost estimation. IT service provider Avision discusses the advantages and disadvantages of this methodology.

The management of software projects can often be compared to navigating in the fog: concrete solutions are usually not yet known, the budget is still unclear and there is no elaborate roadmap at the beginning. This is where the effort estimator comes in, providing an overview of the project and its costs. Avision weighs up the pros and cons of this method:

Pro: Cost estimates provide structure

The methodology provides IT service providers with an overview of the project. The planning uncovers possible risks and stumbling blocks, gives the customer an initial well-founded assessment and serves as a basis for further action. Depending on the level of detail, a roadmap can be drawn up in this way, which saves time and money during subsequent implementation.

Contra: Estimates are too time-consuming

Effort estimates not only involve a lot of effort in the literal sense – depending on the project, they are time-consuming and tie up personnel. At the end of the day, the results do not differ significantly from cost estimates based on experience and the gut feeling of experienced programmers. In addition, even extensively elaborated estimates cannot offer any certainty and work with a certain pseudo-accuracy. Although expert opinions cannot guarantee accuracy, they do involve less effort for the service provider, who can provide their customers with an approximate guide value as an estimate in a timely manner.

Pro: Cost estimates provide planning security

Large corporations and companies with internal budget approvals in particular need at least a rough estimate of expenditure in order to be able to present and drive the project forward in-house. Anyone who has to represent expenditure for external service providers internally is dependent on a list of the planned steps as well as on a financial calculation that is as accurate as possible.

Contra: It’s all about facts

The market is naturally interested in hard figures, especially when it comes to initial reference values for a complex project. Elaborate and detailed planning documents for estimating costs are often a waste of time and effort – what counts for many companies is the final figure. If the sum stated fits into the existing budget, this is sufficient information in most cases.

“An initial cost calculation for software projects is only an estimate, not a computation, even if it involves a lot of effort – project managers should be aware of this,” emphasizes Nadine Riederer, CEO of Avision. “In addition to traditional effort estimation, numerous methods and processes have been established for this purpose. Especially with the advent of agile projects, there are interesting approaches such as design-to-budget. But no matter which method service providers ultimately choose, the key to successful projects lies in transparency and open communication.”

This press release can also be found at www.pr-com.de/de/avision

Press contact

Avision GmbH
Christina Karl
Bajuwarenring 14
D-82041 Oberhaching
Tel. +49-89-623037-967


Melissa Gemmrich
Sendlinger-Tor-Platz 6
D-80336 München
Tel. +49-89-59997-759


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