When starting a new project, timeline and budget are the key priorities. Thus, the success of most software projects relies not only on the implementation phase itself but also on how realistic project estimates are. With years of hands-on experience in the delivery of custom software solutions, Velvetech is sharing insights on the techniques and practices that help accurately evaluate the project. Differences between accurate and realistic software project estimates, possible risks to consider while evaluating the project, top estimating techniques, and how to know if the provided estimate is valid. All these topics and more are in our on-demand webinar: https://www.velvetech.com/events/getting-realistic-software-project-estimates/

1. Getting Realistic Estimates:
How to Evaluate Software
Project Budget
Prepared by Gregory Entin

2. Why Realistic
Estimates Matter

3. “On average, large IT projects run 45% over
budget and 7 percent over time, while delivering
56 percent less value than predicted”
McKinsey report, 2012
Why Realistic Estimates Matter

4. Pre-requisites for
Realistic Estimates

5. KNOW YOUR REQUIREMENTS
 Functional
 Non-functional
 Adherence to standards/compliance
Pre-Requisites for Realistic Estimates

6. Pre-Requisites for Realistic Estimates
• BUDGET
• SCOPE
• TIMELINE
KNOW YOUR CONSTRAINTS

7. How Estimates Are Done

8. Image source: https://theconstructor.org/construction/methods-cost-estimation/36532/
• Top-Down / Bottom-Up
• Analogous and Expert Judgment
• Metrics-based / Parametric
• Three-point Estimating
• Use Case Points
How Estimates Are Done
ESTIMATING TECHNIQUES

9. TOP-DOWN
Estimating Techniques

10. METRICS-BASED / PARAMETRIC
Estimating Techniques

11. THREE-POINT ESTIMATES
Estimating Techniques

12. ANALOGOUS AND EXPERT JUDGMENT
Estimating Techniques

13. USE CASE POINTS
Estimating Techniques

14. OPTIMIZATION TECHNIQUES
 Reducing the scope / phased approach
 Considering technology alternatives
 3-rd party solutions
 Low-code platforms
 Open source
How Estimates Are Done

15. Rough estimates  Detailed estimates 2-3 sprint backlog  Backlog review and refinement  Roadmap planning
Estimates vs Budgets: Agile Approach

16. QUALITY MANAGEMENT
 Requirement analysis
 Unit testing
 Systematic manual testing
 Automated end-to-end tests
 Security audit and penetration testing
 etc.
How Estimates Are Done
Source: Apexon

17. TECH DEBT MANAGEMENT
Ongoing effort that starts from the estimating and
budgeting
 Hard-to-find issues
 Hard-to-fix issues
 Instabilities
 Security issues
 Performance issues
How Estimates Are Done

18. Evaluate the Estimator

19. INDUSTRY EXPERIENCE STANDARDS, GUIDELINES,
CERTIFICATIONS AWARENESS
Evaluate the Estimator
TECHNOLOGY EXPERTISE QUESTIONS ASKED

20. Lessons Learned

21. CUSTOMER ENGAGEMENT
IS ESSENTIAL
BE OPTIMISTIC BUT
STILL REALISTIC
FOLLOW THE AGILE
PROCESS
PICK THE RIGHT
DEVELOPMENT PARTNER
Lessons Learned

22. Thank You!
+1 (847) 559-0864
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www.velvetech.com
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Suite105,
Northbrook, IL 60062