Thursday, March 28, 2013

Software Estimation - meaning and sources of error

Do you remember when did you make your first software estimate? I could not. But it must have come very naturally and unconsciously. Perhaps when I was examining my first assignment requirement, looking for room for an extra feature. Or when we divided work in my first group project. Or when I was asked "how long will it take?" during my internship. Nowadays, the projects I am estimating have gotten more complicated that I can no longer depend on my intuitive judgment for reliable estimates. It is an obvious need to upgrade techniques and mindset accordingly to meet the new situation. Reliable software estimate is not a black magic nor a fictional story, it is a skill that can be improved through retrospection, discipline and practice. In this post, I will briefly capture the meaning of accurate estimate to an organization and identify sources of estimation errors. (Slides are available)

Estimation in software development

Estimation is considered the building block of many activities in software development life circle. These include schedule planning (detailed schedule, complete work breakdown structure), budget planning (prioritize functionality, divide iterations) and resources planning. Accuracy of estimate affects these activities and in general the project ability to hit target. So when a consultant company like us is asked for an estimate, we are not asked for a tentative judgement that we can change our mind later on. We are asked for a commitment or a plan to meet a target.

Given that responsibility, developers' attitude towards estimation is still neglected. If I ask you how long would it take to finish your coming release, there is a huge change that I would get a single-point number answer. In fact a project outcomes follow a probability distribution (McConnell, 2006). A project might be done faster, or later. And the chance the project will be done in the middle of the distribution is most likely. Moreover, there is always a limit on how well a project can be done so the part on the left will be truncated.

What we have now is a representation of the probability distribution of project outcomes. The single-point "estimate" we had earlier is actually a target.

What is estimate used for in your company? If you don't really care how software development works, estimation is all about charging customer. Actually there is much thinking following that probability statement. Take estimate as a means of visualization, project planners will be able to find the gap between a project's business targets and its estimated schedule and cost.
A good estimate is an estimate that provides clear enough view of the project reality to allow the project leadership to make good decisions about how to control the project to hit targets - McConnell, 2006
As it is hard to get 100% accurate estimate and error is inevitable, what is better, overestimate or underestimate? In overall, the penalty for underestimation is more severe than that of overestimation. However
The focus of the estimate should be on accuracy, not conservatism. Once you move the focus away from accuracy, bias can creep in from different sources and the value of the estimate will be reduced - McConnell, 2006

Why your estimate is not accurate

The cone of uncertainty

The amount of uncertainty during software development process varies at different moments and typically narrows down over time. This implies that estimate made at the beginning of the project is less accurate that estimates made at later stages. At the beginning of a project, the targets haven't been fully conceptualized yet. Decisions at this level are broad and subject to changes in future. On the other hand, most decisions in development phase are significantly smaller and focus on implementation details. Do not expect the cone to narrow itself though. Unless decisions to remove uncertainty are made, the variation does not go away.

Organization structure that kills both productivity and predictability.

An environment that
  • Makes room for multitasking to creep in
  • Employs incompetent technical skills
  • Apply incomplete/unskilled project management
Is a great condition to surpress our productivity. It suffers and goes down, rarely linearly but usually exponentially. The key is, the parameters of this exponential function are highly subject to human nature and context. In other words, they are a myth. Thank to this, there gone our predictability.

Unstable requirements

Everyone in the industry knows how destructive requirement changes can be. They prevent us from narrowing down the cone of uncertainty. They are also not well tracked and the project isn't re-estimated when it should be. Project control strategies are out of the scope of this post. But in term of estimation strategy, we can incorporate an allowance for requirement growth and changes (McConnell, 2006). 20%, 30% or 50% depends on your own judgement.

Omitted activities

Include time in your estimates for stated requirements, implied requirements and non-functional requirements. Nothing can be build for free and your estimates shouldn't imply that it can.

Unfounded optimism

Developers are hopelessly optimistic creatures. Yes, you are. That's a fact. It's a thing that you can't deny. This behavior has a close relationship with omitted activities. Our mind is not prepared for multi tasking. Instead of juggling things simultaneously, people have a tendency to focus on only one thing that they are most interested in, they know best or they perceive as being most important to the project and discard the rest. The moment you fail to conceive the project as a whole picture, subjectivity and bias creep in.

Estimate Influences

Because everything that helps you understand the nature of software development improve estimation accuracy.

Project size.

Project size implies the number of potential variations in a project. The bigger the project, the harder it is to be estimated. If building a 10-story building take 20 man-months, how long would it take to build a 100-story? Much more than 200 man-months. During the construction, many issues would emerge. Architecture to support the height, wind and natural disaster. Logistic so that materials are always ready and idle time is minimized. Power plan to keep the structure habitable. That's a perfect metaphor for software development. As the project gets bigger, there are more modules. These modules need to communicate with each other. The number of these communication paths is corresponding to the effort required for to complete the project. And it grows exponentially. This phenomena is widely known as diseconomy of scale.

One of the biggest problem I had related to this was that I failed to anticipate the rich interaction between components. The initial estimate was usually correct, but then missing pieces of how it interact with others kicked in and overflew the estimate.

Type of software

Different software types have different focus and difficulty. Developing an e-commerce website is generally easy and focuses on reusability to maximize profit. Developing a life-critical system is not only complicated on its own but also constrained by industrial or legal regulations. Although not all software development activities produce code, these differences are somehow reflected into LOC over time and demonstrate a strong different in velocity across different project types.


Researchers have found a difference of 10-fold in productivity and quality between good and bad programmers with the same levels of experience and also between different teams in the same industries (McConnell, 2008). This degree of variation is not unique to the software industry but more a common behavior among occupations, including professional writing, sport and police work. The top 20 percent of the people produced about 50 percent of the output. On the other hand, 10 percent of the people contribute negatively to the output, i.e. can't fix the problems they created.

Steve McConnell. (2006). What Is an "Estimate"?. In: Software Estimation - Demystifying the black art. Redmond: Microsoft Press.
Steve McConnell. (2006). Value of Accurate Estimates. In: Software Estimation - Demystifying the black art. Redmond: Microsoft Press.
Steve McConnell. (2006). Estimate Influences. In: Software Estimation - Demystifying the black art. Redmond: Microsoft Press.
Steve McConnell. (2008). 10x Software Development. Available: Last accessed 26th Mar 2013.


  1. IMO, you maintain this blog very well and put some good and useful information about development. Keep sharing continuously!

    1. Thank you, I am trying to keep up with at least one post per month. Looks like I underestimate my velocity this month :)

  2. My cousin recommended this blog and she was totally right keep up the fantastic work!

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  3. Could you please send me your word or excel files that list all of resource estimation(Tech Camp)

    1. Not sure what do you mean by "resource estimation"?

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