When developing software projects, the total costs involved always come to mind. Software development is actually a service, not a product. So, it is not possible to give an exact price right away.

As a result, companies use different methods to estimate software projects. These methods involve the following factors:

Scope of Work

 It influences all the software development estimations. In essence, the user reaches out, shares his app idea, and then transforms it into a concrete plan. During the discovery stage, unknowns are discovered, requirements and descriptions are formulated, and the development is planned out carefully.

 Development Risks

 In general, there are two types of risks that are accounted for during the estimation of software development. These risks are external and internal risks.

External risks are not predictable based on previous experience. They are usually unique for every project. They are also related to industry requirements, legal issues, and third-party API among others.

Internal risks are related to previous experience, software solutions that are about to be integrated, and uniqueness of technologies. Basically, the more experience acquired, the more accurately the project can be estimated.

Then, there are also organizational risks. These risks tend to occur during the development of the project. Nonetheless, they can be solved through professional and transparent communications with the project manager.

  • Tech Stack

 Every tool has a specific purpose. There are tools that are more ideal for solving certain problems. There are also technologies that need more expensive specialists. This is why a particular technology stack may be less expensive than others.

The development team is responsible for choosing the technologies. You have to define the tech stack, though. You also have to define the programming language as well as specify the must-have integrations.

Common Approaches Used

The following are the most commonly used approaches in estimating software projects:

Traditional Approach

This approach is actually based on scope stability. So, it can provide you with the maximum efficiency once the scope is identified. In addition, it will not change until the project ends. Man-hour metrics are used in this approach. Every task gets estimated based on how much time it usually takes to be completed.

 Agile Approach

Agile refers to the software engineering philosophy that values flexibility. Rather than demonstrate and release a product when its development is done, agile recommends breaking down the workload into sprints or short stints as well as creating a minimum valuable product. 

 Unlike the traditional approach, which is plan-driven, the agile approach is value-driven. This means that a feature’s added value is more important than following a detailed plan.

Final Thoughts

Accurate estimations are helpful, important, and necessary. They allow stakeholders to be more efficient and confident. They help vendor partners manage their teams as well as give team members a good development schedule so that they can be more productive.