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This document summarizes Muhammad Qasim Wali's presentation on software cost estimation techniques. The presentation defines cost estimation and discusses where in the software development lifecycle estimates are done. It then explains seven techniques for performing cost estimation: algorithmic models, analogy, expert judgement, top-down, bottom-up, price to win, and Parkinson's law. For each technique, the presentation provides a brief description and lists advantages and disadvantages.
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- 1. PRESENTATION
- 4. Name: Muhammad Qasim Wali Roll Number: 14841
- 6. Defining Cost Estimation Cost estimation can be defined as the approximate judgement of the costs for a project. Cost estimation will never be an exact science because there are too many variables involved in the calculation for a cost estimate, such as human, technical, environmental, and political. Cost estimation is usually measured in terms of effort. The most common metric used is person months or years (or man months or years). The effort is the amount of time for one person to work for a certain period of time.
- 7. Where are Estimates Done? Strategic Planning Feasibility Study System Specification Evaluation of Supplier’s Proposals Project Planning
- 8. Cost Estimation and Project Planning Cost estimation is an important tool that can affect the planning and budgeting of a project. Because there are a finite number of resources for a project, all of the features of a requirements document can often not all be included in the final product. A cost estimate done at the beginning of a project will help determine which features can be included within the resource constraints of the project (e.g., time). Requirements can be prioritized to ensure that the most important features are included in the product. The risk of a project is reduced when the most important features are included at the beginning because the complexity of a project increases with its size, which means there is more opportunity for mistakes as development progresses. Thus, cost estimation can have a big impact on the life cycle and schedule for a project.
- 9. Cost Estimation During the Software Life Cycle Cost estimation should be done throughout the entire life cycle. The first time cost estimation can be done is at the beginning of the project after the requirements have been outlined. Cost estimation may even be done more than once at the beginning of the project. For example, several companies may bid on a contract based on some preliminary or initial requirements, and then once a company wins the bid, a second round of estimation could be done with more refined and detailed requirements. Doing cost estimation during the entire life cycle allows for the refinement of the estimate because there is more data available. Periodic re-estimation is a way to gauge the progress of the project and whether deadlines will be able to be met.
- 10. Cost Estimation Techniques 7 Techniques: 1. Algorithmic Models 2. Analogy 3. Expert Judgement 4. Top-Down 5. Bottom-Up 6. Price to Win 7. Parkinson’s Law
- 11. Algorithmic Model This software cost estimation technique use the mathematical equations to perform the software estimation. The mathematical equations are based on historical data or theory. SLOC (source line of code), function points, and other cost drivers are the inputs. For most algorithmic model, calibration to the specific software environment can be performed to improve the estimation. Cost Model: COCOMO / COCOMO II , CheckPoint, SoftCost, Price S Constraint Model: SLIM, Jensen Model
- 13. Algorithmic Model Advantages: Generate repeatable estimations Easy to modify input data Easy to refine and customize formulas Disadvantages: Unable to deal with unusual conditions Some experience and factors can not be quantified
- 14. Estimation by Analogy The cost of a project is computed by comparing the project to a similar project in the same application domain. Analogous estimating uses historical data from similar projects as a basis for the cost estimate. The estimate can be adjusted for known differences between the projects. This type of estimate is usually used in the early phases of a project and is less accurate than other methods. Example: Machine Learning (Case-Based Reasoning, Classification Model)
- 15. Estimation by Analogy Advantages: Based on actual project data Accurate if project data available Disadvantages: Impossible, if no compatible project has been tackled in the past. How well does the previous project represent this one Needs systematically maintained cost database
- 16. Expert Judgement This technique captures the experience and the knowledge of the estimator who provides the estimate based on their experience from a similar project to which they have participated. Expert judgment uses the experience and knowledge of experts to estimate the cost of the project. This technique can take into account unique factors specific to the project. Examples: Delphi and Work Breakdown Structure (WBS).
- 17. Expert Judgement Edit Advantages: Useful in the absence of quantified, empirical data. Can factor in differences between past project experiences and requirements of the proposed project Can factor in impacts caused by new technologies, applications and languages. Disadvantages: Estimate is only as good expert’s opinion Hard to document the factors used by the experts Very inaccurate if there are no experts!
- 18. Top-Down This technique is also called Macro Model, which utilize the global view of the product and then partitioned into various low level components. Top-down estimating is a technique used by upper level management to estimate the total cost of a project by using information from a previous, similar project. In other words, they will estimate the cost of the current project based on the last time they introduced a project. Example: Putnam model
- 19. Top-Down Advantages: Requires minimal project detail Usually faster and easier to implement Focus on system level activities Disadvantages: Tend to overlook low level components No detailed
- 20. Bottom-Up The cost of each software components is estimated first and then the results are combined to derive the final cost estimation for the project. Bottom-up estimating is a way to approximate an overall value by approximating values for smaller components and using the sum total of these values as the overall value. In project management, this type of estimating is used to create a schedule or budget. Typically, the project work is broken down, or decomposed, into smaller components and an estimate of duration and cost is assigned to each component. Example: COCOMO’s detailed model
- 21. Bottom-Up Advantages: More stable More detailed Allow each software group to hand an estimate Disadvantages: May overlook system level costs More time consuming
- 22. Bottom-Up
- 23. Price to Win The cost estimate is the price that is necessary to win the contract or the project. The software cost is estimated by the price what the customer has available to spend on the project. Advantages: Often rewarded with the contract Disadvantages: Time and money run out before the job is done
- 24. Parkinson’s Law Parkinson’s Law states that work expands to fill the time available and The cost is determined by available resources rather than by objective assessment. Example: If the software has to be delivered in 12 months and 5 people are available, the effort required is estimated to be 60 person-months. Advantages: No overspend Disadvantages: System is usually unfinished
- 25. THANK YOU