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By AlexJames

Software Development Cost Estimation Techniques

As a software developer, you need to estimate your work and budget it. The best way to do this is by using an estimation technique that can help you determine how much time and money it will take to complete certain tasks or features on your project. There are many different estimation techniques available, but some of them might not be appropriate for your project depending on what stage it’s in or how complex it is. In this article we will discuss eight different cost estimation techniques that can help us get started with estimating our projects:

1. Scope

The scope is the work that needs to be done to deliver the project. Scope is usually defined by a product owner or client, who defines the features and functions that are expected from your software. This can help you define how much time will be needed for each phase of development, which will help in calculating cost per hour (CPH).

2. Requirement

The requirement is a term used to describe the purpose or function of a product, service, or solution. It’s often expressed as statements like “the system must be able to do X”. In addition, requirements can also be described as functional specifications that define how an end-user will interact with your product (e.g., “a user should be able to fill out this form”).

3. Resource availability

Resources are a critical factor in project cost estimation. The availability of resources can be influenced by the team size and their experience, as well as the project schedule and budget. A good resource manager will be able to predict how many people are needed for a given task so that you don’t waste money on overheads when you don’t need them.

When it comes to resource availability, there are several factors at play:

  • Team size – How many developers does your company have? 
  • Experience level – Are these guys amateurs or professionals?

4.Functional Specifications

A functional specification is a document that describes the functionality of the software. It is a detailed description of how the software will work and what it should do once deployed. The developer can use this document to understand their requirements better, while customers can use it as an important reference point when they need to know how software development companies are meeting their requirements.

5. Tasks and Efforts

Tasks and efforts are the two main elements of a cost estimate. The task is a specific activity that you need to accomplish, while the effort is the time it takes you to complete a task.

Task estimates are usually expressed in terms of person-days, person-hours, or person-weeks (PDW). A PDW represents how many people can be involved in accomplishing a given task within an allotted amount of time. For example:

  • If there are 100 employees working on your project then each employee would need to work approximately 2 hours every day for 6 days straight (120 hours) before being replaced by another employee for another 120 hours until completion; this total would be equal to 900 hours worked by all 200 people involved with this project so far!
  • Also know about sales of consumer electronics.

6. Effort Definition and Estimation

Once you’ve defined the effort, it’s time to estimate how much it will cost. There are several ways to do this:

  • A basic linear model can be used if you know your schedule and budget at the beginning of the project. This method assumes that activity duration is constant over time, which may not always be true when working with a team or subcontractor who has experience with a particular type of work (e.g., design vs coding). 
  1. Defects and Testing

Defects are a common occurrence in software development cost projects. They can be categorized as functional or non-functional defects (also known as technical and non-technical). Functional defects are errors that cause the software to not operate correctly, while non-functional defects are errors caused by an error condition or usage of the product without adequate testing.

8. Project Risk Factor

Project risk factors are defined as the risks that arise during a project. These can be classified into three categories:

  • Project risk factor – The probability of an adverse event occurring on or before a specified date and time.
  • Team risk factor – The likelihood of members’ failure to perform their assigned tasks correctly or in accordance with specification requirements, resulting in failure at some point during the development process (e.g., due to lack of expertise).
  • Product development risk factor – A possibility that something will come up later than expected which may reduce product quality or performance levels beyond what has been planned originally


In this article, we have discussed the various techniques used to estimate the cost of software development. We hope you have got a better idea about how to estimate your project cost and are ready to start preparing your project plan with confidence.

Read more: reflectionbusiness.com

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