Time is money and money talks! If you work in business or tech, you've certainly heard this phrase.
Optimally predicting and controlling project timelines and budgets is essential for every project's success. 66% of development projects end up in cost overruns, resulting in conflicts between clients and development agencies.
In this article, I will talk about the best practices you can follow to estimate projects accurately. I will also introduce Crowdbotics' proprietary dashboard, which provides a host of tools to track product progress, payments, tasks, and milestones.
Estimating software timeline is advantageous to both software vendors and clients.
Companies can ...
Clients can ...
While project estimation provides clear benefits, many companies shy away from it because of the uncertainty involved. However, there are some industry-proven processes that give more structure to task estimation.
Estimation involves looking through all available data to accurately propose resources, time, and costs required to complete a project. There are 5 key estimation techniques used in project management.
This technique involves a mathematical approach to estimation. Here, you create a probability distribution with a range of three outcomes based on limited information.
Using past experience, guesswork, your best intuition, or assistance from a key stakeholder, an estimate range can be computed. This range includes:
a = the best-case outcomes or estimate
m = the most likely outcome or estimate
b = the worst-case estimate
Using the above estimates, you can perform a simple mathematical calculation to compute the weighted mean and the standard deviation. The standard deviation is used to estimate probabilities.
E = (a + 4m + b) / 6
SD = (b - a) / 6
Three-point estimation is considered more accurate than simply asking your colleagues to provide an estimate for the project.
2. Top-down estimation
This is the most popular method used for project estimation. You first take in a broad view of the entire project, and then subsequently break it into smaller pieces.
This is ideal for projects at an early stage or in situations with several unknowns, and it has proven to be fairly precise. It serves as a strong methodology for providing a projection to determine a project’s viability or to begin with initial scoping.
3. Bottom-up estimation
As the name conveys, this is the reverse of top-down estimation. Bottom-up estimation works well in situations where you have a clear understanding of the fine details of a project but lack an accurate picture about the broader form.
Using this technique, you start with the fine details of a project, get a team to help estimate the details, and then extrapolate them for the project as a whole. Though this is a more time-consuming methodology, it allows you to start with a deep understanding of the cost for each project element.
4. Analogous estimation
This methodology is helpful if you have significant experience in executing similar projects. It allows you to take your previous experience and apply it to a new undertaking.
Using the scope from a previous project, along with other specifications like timelines, budgets, and resources, you can put together an accurate estimate. However, you must keep in mind any adjustments required to compensate for current scenarios.
5. Parametric estimation
Irrespective of whether you're looking at cost, timeline, or resource requirements, this is one of the most precise ways of estimating a project.
It leverages the costs or timescales of individual project elements to estimate the cost or timescale for an entire project. Since fixed costs are often given, parametric estimations are typically accurate.
Irrespective of the software development methodology you use — Waterfall, Agile, or a blend of the two — providing a project estimation is challenging. An inaccurate estimation creates problems for businesses during the production process.
Several software services companies rely on product managers for project estimation. Once the estimations are approved, activities are initiated and development team starts working on the tasks. However, developers often realize that the initial estimation was inaccurate, leading to unforeseen consequences.
If the organization does not have a culture that allows pushback, developers go through with the initial estimation, disregarding the quality to compensate for lower time and cost estimates. Even if developers might push back, the company will bear a loss of revenue, and clients will lose money.
All these scenarios result in friction, lack of client satisfaction, and delays in deliverables.
One reason for inaccurate project estimation is lack of understanding of the triangle of constraints.
A software project has three constraints - Scope, Time, and Cost. If one constraint changes, so will the others. An accurate estimation needs to consider each constraint.
Crowdbotics pays great attention to the estimation process. Its proprietary dashboard has been built to ensure complete transparency and accurate estimation by following a diligent process facilitated by our tools.
At Crowdbotics, every client who signs up is assigned a Product Manager who has experience in requirements gathering and delivering successful products.
The process starts with a kick-off call where the product manager speaks to the client to understand their requirements.
Once the PM has gathered the requirements, they start creating a storyboard. Crowdbotics’ dashboard provides a dedicated tool to create a storyboard by leveraging several templates and screens to choose from.
Once the storyboard is created, the PM starts building a data model for the project. Just like storyboarding, Crowdbotics has a dedicated tool for generating data models as well to speed up the process.
The PM also has an option to utilize standard Word documents and third-party tools at their disposal to further flesh out the requirements, which are shared with the client for approval.
This is very essential on projects where estimations are expected at the task level. This approach breaks the project into smaller pieces, and estimation is created for each piece. To facilitate this process, Crowdbotics provides the option to request developers and subject matter experts using the “Team Members” page.
Upon submitting the request, the platform automatically generates a job posting on Crowdbotics’ community as well as third-party platforms where developers can apply.
The PM vets the developers and invites them to participate in the estimation process. This ensures that the entire team who will eventually be handling the development participates in estimation.
Bring in the experts
Crowdbotics also has a community of 500+ people who are experts in various technology stacks and development verticals. Expert judgment is vital to project success. Therefore, the PM can leverage these resources.
Crowdbotics’ library of prebuilt modules and RAD stack methodology allows development teams to scaffold existing codes to speed up development and lower costs. You can view our marketplace here.
Once the scope and estimations are created, the client receives a notification. Upon approval, the development begins in an agile manner where the client has an option to approve and pay for deliverables and tasks.
Crowdbotics’ “Tasks” page is an Agile project management tool that allows the PM to list their planned tasks. Once the client approves the tasks by making a payment, development starts.
Crowdbotics' Tasks tool allows you to:
Thus, using Crowdbotics’ Tasks functionality, you can track work and get clear summaries of costs.
All of this data is helpful in keeping the project costs in check. Upon completion, the tasks are delivered for the client to confirm and approve, before making another payment for the tasks to be undertaken during the next sprint. The client has complete control of the Dashboard and can view the progress.
Involving stakeholders throughout the process helps accurately define what is important in the software development cycle. This helps the business leaders and the development team gain a shared understanding of the project and hold everyone involved accountable. Thus, Crowdbotics’ PMs hold a weekly meeting with clients to demo the product on a regular basis to gain feedback.
The time required to develop software is contingent on the size, functionalities, and features that it will incorporate. Thus, when a client needs custom software development, it is imperative to work with a company that can accurately estimate the project.
Though managing project budgets successfully isn’t very simple, Crowdbotics’ proprietary tools and tested methodologies allow clients to keep their budgets in check. Click here to try it out today!
July 9, 2020