Before starting the software development process, it is very important to figure out what the final software product will look like from the point of view and expectations of the business and the development team. To understand how the vision of the customer and the development company coincides, we should determine the route from the starting point of the project to the end point, i.e. “a ready solution”.
Therefore, the most important stage in IT project preparation is the precise organization of the process of calculating labor costs. With an inaccurate estimate, effective project management is not just problematic; it’s not possible at all. The project estimate shows how much time the project team will spend to complete each task to create modules and components of the future product. In fact, the estimate of IT projects allows us to build a map of the route by which we will come to the desired result.
Each segment of our route on the map is the implementation of defined tasks for the project. “How much will it cost?” is the most frequently asked question from the customer. The client often wants to know the cost and timing of his project immediately. But in the case of IT projects, it can take days or even weeks to form an adequate detailed estimate. IT products are not like goods on store shelves with precise price tags, and without understanding the specific features of a project, it is impossible to define the budget required to create it.
This is why we start with a thorough project estimate, in order to give an accurate understanding of how long it will take the development team to implement all the tasks included in the project scope.
The reliability of the project estimate is a very important factor. Calculating the total cost and labor without fully understanding the project scope can create significant problems for both the client and development team. Overestimation and underestimation are not desirable, as they can lead to a number of negative consequences. In case of underestimation of the project, the software team will have to sacrifice the quality of work by compressing the development time and reducing the number of developers. And if the contractor neglects the deadlines, the client will become unsatisfied and lose confidence in the professionalism of the development team.
Excessive overestimation of the project is also fraught with uncertainties and risks. Obviously, such projects will be much more expensive, and consequently, they are unlikely to be taken into development. Another company could evaluate it better and provide the customer with a more suitable and cost effective solution. Moreover, extremely extended deadlines and lack of team control results in poor performance on other projects and losses for the company.
Taking the time to establish an accurate project estimate is the foundation for effective software development. In order to achieve the desired goals, it is important to align the day-to-day work of the team with the strategic goals of the organization, which will only maximize the agility of the entire organization, its successes, and its profits.