The Complete Guide on Software Development Time Estimation

  • Lorea Lastiri
  • July 21, 2022
  • 11 min read

As one of the project managers of the company, one of your key responsibilities is to ensure that the software development team completes all of the company’s software development projects on time.

However, due to software complexity, project estimation may be difficult. And as a leader, you need to consider every factor that can possibly affect the development time and quality of your output.

To help you create an accurate estimation on the actual amount of time required in creating custom solutions, writing code, and performing other tasks involved in developing software, we’ve put together this comprehensive guide on software development time estimation for you.

And in this guide, we will cover all the development time estimation techniques that can help you and the rest of the software development team deliver everything that is required of you.

We will also include some tips and tricks for making sure that your development teams get your software estimates as accurate as possible.

By the end of this guide, you will have all the knowledge you need to make accurate estimates for your next software development project.

Let’s get started!

What is time estimation for software projects?

Software project estimation involves gauging the amount of time necessary in delivering all the tasks related to software development.

project estimation meeting

This estimate is based on a number of factors such as the size and intricacy of the project, the expertise of the team, and the accessibility of everything that’s necessary to bring the software to life.

There are a number of reasons why software development time estimation can be difficult:

  1. The process of software engineering is complex. There are a lot of different moving parts, and it can be hard to predict how long each step will take.

  2. Every project is unique. Even if you have completed a similar project in the past, there will always be some new factor that can possibly affect your project time.

  3. The team working on the project right now may not have all the skills or experience required to successfully finish everything in a short period of time. This can make it difficult for any team member to come up with software estimates for the project.

  4. Unforeseen problems that can potentially delay the development process may arise any time. Once this happens, negative effects such as missed deadlines, enlarged budget, and lost revenue may take place— leaving your business in a bad light.

  5. Finally, the availability of resources can also impact the amount of time necessary to complete a project. If the team does not have access to all the necessary resources, then they may need to work overtime or hire additional staff, which may significantly impact the schedule and the budget set for the project.

Why is it important to estimate time for software development?

You need to achieve accurate estimates for all the smaller sub tasks to:

  • Effectively prepare and manage all uncertainties

  • Help agile teams, executives, and other related parties develop smart goals and expectations on every stage of the software development

  • Develop a technical plan that can aid in successfully finishing enterprise software projects on time

  • Perform all tasks within the given project timeline

  • Avoid working out of scope and project cost

  • Deploy the product on its targeted launch date

  • Steer clear of missed market opportunities

  • Foster transparency with any outsourcing partner of the company

How to correctly estimate time for software development projects?

There are a number of methods that can be used to estimate the time required for a software development project.

The most common methods are:

  1. Use of historical data.

    Examining similar projects that were completed recently by the company can help. However, this should never be the sole basis of establishing your future estimates. Remember, every project is unique, and the differences between them thoroughly affects their completion time.

  2. Analogous estimation.

    Instead of using previous projects as your basis to estimate software development time, you may research existing cases and make adjustments to account for the differences. For example, you might use the time required to complete a project with a similar scope or the time required to complete a project using a similar technology.

  3. Bottom-up estimation.

    This approach involves spending an ample amount of time in brainstorming every specific task involved in the whole development process and estimating the time required to deliver each milestone. Understanding the average cost of app development is crucial for budgeting and financial planning, ensuring that the project aligns with financial expectations and resource allocation strategies. For example, the cost of a VPS in USA, which can be an essential part of hosting requirements, typically ranges from $100 to $300 to start out. Incorporating a software architecture review at this stage can provide valuable insights, ensuring that the architectural design aligns with the project’s time and resource constraints. As you can see, this method can be very effective when used properly. However, it can also be time-consuming.

  4. Top-down estimation.

    In contrast, the top-down approach estimates the total time required for the project first before breaking that estimate down into smaller chunks.

  5. Parametric estimation.

    The parametric estimation involves using statistical methods to accurately predict the time required for software engineering. This estimation process requires software developers to utilize data points from other parallel projects in the past to come up with the right time estimates for your ongoing project now. Incorporating data engineering services can significantly improve the accuracy of these estimations by leveraging advanced statistical methods and historical data analysis.

  6. Three-point estimation.

    A three-point estimation uses three estimates for each task: an optimistic estimate, a pessimistic estimate, and a most likely estimate. The final estimate is then calculated by taking the average out of the three estimates utilized.

  7. Function point analysis.

    Function point analysis involves making an estimate for the whole project based on the functionality of the software. In simpler terms, the more features it has, then the longer it takes to build it.

    This is because bigger projects require more integrations on the developers’ end. The type of output required from you matters as well, because mobile applications take more time to create than regular web platforms. All of this leads to the increased estimated time required to finish the project.

    • Agile methodologies. A function point analysis works great with agile projects. While working on agile projects, you need to focus more on the required efforts rather than predicting the needed time.

      The most common way to do this is by utilizing user stories for every section of the project. Specifically, project managers often have a planning poker session with their team members to ascertain the values of each sample case.

      • A set of “poker cards” with the values 1, 2, 3, 5, 8, 13, 20, 40, and 100 narrative points should be distributed to each team member.

      • You start by determining how difficult a sample user story is to deal with. Award narrative points on those cases and use it as a guide to determine the complexity of future projects.

      • The team members should go through each user story in the backlog and determine the difficulty of each one by selecting a value card and laying it face down.

      • Cards are opened and discussed once everyone has completed.

The duration of software projects isn’t exactly calculated by averaging the outcomes of the poker session. Instead, use the values determined by the activity to reach a consensus on which estimate works best for the project. You can also use the results of the poker session even after the beginning of the project. 

You may achieve this by asking your team to put a model user narrative into practice.

For instance, if your team completes a user story with 5 story points in 35 hours, then 1 story point will equate to 7 hours.

If you have a total of 1,400 story points, then you may multiply it by 5 and get an estimate of around 7000 hours, which is equivalent to approximately 10 months.

Note that each of the methods presented in this list has its own strengths and weaknesses. At the end of the day, the best estimation method for a particular project will depend on its unique and specific circumstances. You can also combine these methods to achieve realistic software estimations.

Steps to estimate time correctly

Here are some steps that you can apply to come up with the right software development estimates. Be sure to apply them today to avoid any form of delay.

1. Define the scope and complexity of the project.

The first step in estimating the time needed for software development is to define the scope of the project.

Gather all the data and information that you need to increase your understanding of what the project entails, what the clients’ demands are, and what deliverables are expected from you and your team.

That being said, make an effort to grasp the client’s major ideas. 

  • Discuss specifics such as wireframes, mockups, competitors or analogous websites, technical documentation, personal preferences, and other high-level requirements.

  • Clarify their vision of the software and talk about both functional and non-functional criteria.

You can also visit prior company projects and set side-by-side with your current tasks on hand. Analyze and compare their data-driven projections for any similarities.

Aside from being able to establish base estimates through comparison, you can also identify factors and activities that can potentially jeopardize a project if any mismatch is observed between estimates and actual time spent. 

In addition, determine whether you have all the resources you need to successfully finish the software in time. Partnering with a seasoned software development company can provide the specialized expertise and additional resources necessary to meet these complex demands, ensuring projects stay on track and within budget. When one of these is missing, determine how long it will take to secure it, or consider hiring Node.js developers or employing the services of a custom software development company Ralabs.

Remember, you have to avoid delaying the project at all costs.

👉 Read more about project cost estimation!

2. Create a task list.

Once the scope is clear, you can begin to break down the work into smaller tasks. You may use a work breakdown structure to visualize every stage of the software development process with all the tasks related to it.

tasks, plan, goal

Also, make a checklist of all the features and capabilities specified by the client so you wouldn’t have to spend so much time in revising your output.

👉 Check 14 Best To-do Apps with Time Tracking Integration for Teams

3. Make your own software estimate.

This step is most effective when you are a software developer yourself. But if you aren’t, you can consult with top software development company to help you on this part.

Study all the information that you have about the project. Examine every aspect and create your own framework with a specified time and effort estimation for everything that your team is about to do.

Treat this step as a part of the project’s discovery phase. Estimate hours needed for every undertaking and write it down, as this is something that you can use for the next step.

4. Conduct team meetings.

Having a dedicated team to back you up is important in estimating software development time. After all, this is a group undertaking— and being on the same page can help you establish a proper time estimate for everything.

planning, meeting, work

  • To begin, talk to them about the data that you have gathered from the previous steps. Go through all the details and ask them for their insights. This activity will not only eliminate communication gaps among team members. It will also promote inclusivity. This is especially important if you practice IT outsourcing and need to manage your remote teams effectively.

  • Together, create story points or sequences to follow. Put every task in order so you can establish a strong perception of what to prioritize.

  • Select technology stack to utilize. When creating a house, the choice of construction materials you choose has a significant influence on its strength and functionality. The same goes true for the type of technologies you use and combine when developing a software.

    This is known as a technological stack — and in many ways, this determines the success of your output. Identify all the choices you have and find out how long it would potentially take for you as a team to finish the software with these varied options.

    Establish your goals so you can effectively choose your tech stack. Consider if your project will be a cross-platform solution, a mobile application, or a web platform. Then, conduct research to find out the technology that your rivals are using in circumstances comparable to yours. Learn why they do this and what outcomes they ultimately achieve.

  • Assess your team members and match them with tasks that fit their abilities. Or better yet, ask them which tasks they want to perform and agree on a a deadline. In addition, having a dedicated team also ensures that there’s consistent progress and accountability throughout the development process.

5. establish a project timeline

The next logical step is to talk with your client about the project timeline.

However, before doing so, don’t forget to add a risk buffer of 5 % to 25% on the overall project time as a form of precautionary measure in preparing yourself against all unforeseen circumstances.

Add another 20% of extra time to a project too to account for other things that can potentially eat up time such as team meetings, communication gaps, productivity dips, and many others.

A pro-tip to maximize time and productivity would be to use time management techniques like timeboxing to take on projects with a small sprint retrospective. Collaborating with a design sprint agency can streamline the initial stages of  software development, providing clarity and focus to the project’s goals. That way, you’d be able to schedule your tasks effortlessly, focus on what needs to be done, measure how many short breaks you need during the day, determine what are your most common distractions are, and discover how much time you really spend on every activity.

👉 See how to improve software development team’s productivity

In developing software, system failures, integration issues, and other unpredictable problems may arise, so it’s better to consider the risks involved ahead of time. Take note of anything that can inherently delay the project or cause it to go over budget. For example – when working as a company offering custom Shopify development services, it’s crucial to assess potential challenges and risks upfront, such as those mentioned above, to ensure a smooth and on-budget implementation.

Example of How Long Does it Take to Build an App for a Clinic

The web and mobile app Compassly is designed to support the autism community, helping with the social, communication, language, emotional and organizational skills of children with autism. The client came to Interexy team with an idea, so the process started with a discovery and estimation stages where we:

  • Made a research on the product’s potential
  • Collect requirements from the client
  • Identified the needed tech stack for web development and the team that should be involved
  • Discussed and agreed on timelines.

Their team had to develop both mobile and web applications with a range of programs for children and a time tracker for their caregivers. The tech stack they chose for the project was:

  • React Native
  • Node.js
  • AWS Postgres.

With a team they have chosen for the project considering its complexity and requirements, It took 2 years for their team to take the idea and launch both the app and a website to the market. The company worked following the Agile methodology since the client wanted to bring changes and add new features during the process.

Wrapping Up

Making an accurate estimate of the time needed for software development is essential for ensuring the success of the project. By following the steps outlined above, you can be sure that you are providing a realistic estimate that will allow your software development project to stay on track.

Remember, when estimating time for software development projects, business requirements should always come first. Knowing what features, preferences, and capabilities your client wants you to implement within your output can serve as your foundation in establishing the right estimates. Working with these guidelines in mind will save you from a lot of time, money, and headaches that revisions may bring later on.

Plus, you can always look for ways to simplify your existing projects if a lucrative market opportunity is present within constrained timelines. Use ready-made components for your software, or contract out a portion of the work to a credible, outsourcing partner. 

Lastly, you can boost your productivity to meet deadlines via Time Camp— a time tracking tool that enables visibility and transparency by allowing project managers like you to stay on top of your tasks and schedules by monitoring the total time that your team has spent on specific projects and activities. This app is an unobtrusive time tracker that can work seamlessly on the background while helping you categorize tasks and priorities through accurate timesheets, daily and graphical weekly view with colorful time blocks, comprehensive and detailed reports, and other useful features for productivity and time management. TimeCamp integrates with many different tools such as: Asana, Google Calendar, BitBucket and others.

Start tracking time with TimeCamp!


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1 Comment

  1. Shamsul Haque
    December 8, 2022 at 10:09

    Topics are defined very well, so it will be helpful for a concerned person like me.