Software Engineering-Software Project Estimation

In the early days of computing, software costs constituted a small percentage of the overall computer-based system cost. An order of magnitude error in estimates of software cost had relatively little impact. Today, software is the most expensive element of virtually all computer-based systems. For complex, custom systems, a large cost estimation error can make the difference between profit and loss. Cost overrun can be disastrous for the developer.

Software cost and effort estimation will never be an exact science. Too many variables—human, technical, environmental, political—can affect the ultimate cost of software and effort applied to develop it. However, software project estimation can be transformed from a black art to a series of systematic steps that provide estimates with acceptable risk.

To achieve reliable cost and effort estimates, a number of options arise:

1. Delay estimation until late in the project (obviously, we can achieve 100% accurate estimates after the project is complete!).
2. Base estimates on similar projects that have already been completed.
3. Use relatively simple decomposition techniques to generate project cost and effort estimates.
4. Use one or more empirical models for software cost and effort estimation.

Unfortunately, the first option, however attractive, is not practical. Cost estimates must be provided "up front." However, we should recognize that the longer we wait, the more we know, and the more we know, the less likely we are to make serious errors in our estimates. The second option can work reasonably well, if the current project is quite similar to past efforts and other project influences (e.g., the customer, business conditions, the SEE, deadlines) are equivalent. Unfortunately, past experience has not always been a good indicator of future results.

The remaining options are viable approaches to software project estimation. Ideally, the techniques noted for each option should be applied in tandem; each used as a cross-check for the other. Decomposition techniques take a "divide and conquer" approach to software project estimation. By decomposing a project into major functions and related software engineering activities, cost and effort estimation can be performed in a stepwise fashion. Empirical estimation models can be used to complement decomposition techniques and offer a potentially valuable estimation approach in their own right. A model is based on experience (historical data) and takes the form

                                                  d = f (vi)

where d is one of a number of estimated values (e.g., effort, cost, project duration) and vi are selected independent parameters (e.g., estimated LOC or FP).

Automated estimation tools implement one or more decomposition techniques or empirical models. When combined with a graphical user interface, automated tools provide an attractive option for estimating. In such systems, the characteristics of the development organization (e.g., experience, environment) and the software to be developed are described. Cost and effort estimates are derived from these data.
Each of the viable software cost estimation options is only as good as the historical data used to seed the estimate. If no historical data exist, costing rests on a very shaky foundation.
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