Software estimation is notoriously difficult. Here's why, and how to manage it.
Why Estimates Are Hard
- Unknown unknowns: You don't know what you don't know
- Requirements change: What users say they want vs what they need
- Integration surprises: Third-party systems behave unexpectedly
- Technical debt: Past shortcuts slow future work
- Optimism bias: We underestimate complexity
Estimation Approaches
Fixed Price
Good for well-defined projects. Risk is on the developer. Often includes padding for uncertainty.
Time & Materials
Good for evolving projects. More flexible but requires trust. Risk is shared.
Agile/Sprint-Based
Estimate in small chunks. Re-evaluate frequently. Most accurate for complex projects.
Red Flags in Estimates
- Very precise numbers (£47,250 exactly)
- No questions asked before estimating
- Significantly lower than competitors
- No mention of assumptions or risks
Getting Better Estimates
- Define requirements clearly upfront
- Share context and constraints
- Ask about assumptions
- Build in contingency (15-25%)
- Use ranges, not single numbers
Need a realistic estimate for your project? Contact PYCO IT.