Common Project Estimation Mistakes
Most IT startups around the world fail and close down soon. It is not surprising because the project management consultants and software vendors say they see consistent mistakes from IT departments that repeat them frequently. The project estimation errors appear due to the lack of thoughtful planning and misunderstanding between the customer and the company. This does not happen in Powercode. Qualified employees assess the risks and have the ability to prevent them. We will be happy to share our experience and tell you about project estimating errors and their causes.
Not Enough Information in Requirements
We understand why clients may not tell their development team all the details. However, a lack of important information on wanted software functionality, programming technologies, deadlines, and budget may result in estimation that won’t meet reality. For instance, the client wants additional registration validation functionality that integrates with a specific database. It wouldn’t be a problem to add this functionality in the future. Still, the development team won’t consider this requirement when estimating time, budget, and human resources without knowing about this requirement initially.
Having Estimation and Development Done by Different Companies/Teams
Software development teams and engineers are like snowflakes: there are no two identical ones. While one team may be excellent in technologies like Python and Angular, another team may be a guru of Java or React Native. The same goes for the extension of expertise. Universally, skilled developers have higher task delivery quality and speed compared to junior developers.
Thus, if you ask one team to estimate your project but intend to hire another one for actual development, this would be a big estimation mistake. To avoid inconsistencies in deadlines, technologies, and other things vital for you and your project, make sure that your project is estimated by the same company or a team that will design, develop, and test it.
Making an Estimation on the Best-Case Scenario
It’s no secret that project estimation is a difficult task, and most often, at this stage, disagreements occur between the customer and the team. For developers, a scenario is an approximate forecast that can change at any second. While an entrepreneur needs to see specific numbers, this will help attract investors.
We recommend preparing for force majeure situations and thinking over plans to resolve the troubles. Think carefully about what could go wrong at each stage of development and launch, and warn your client about it. To minimize the risks of failure, use MVP and understand which functions will benefit the person and make them return to you again and which ones are better to remove for good.
Don’t try to find trouble-free projects because they don’t exist. Even if you are sure of the order’s success at the start, you can see several shortcomings.
Not Taking Into Account Team’s Expertise
Everyone knows that not all customers want to migrate the system to a new technological platform. Sometimes, they need to process more information, reduce downtime, or serve more users.
If the business owners hire a person who does not understand his niche, the order may not turn out as high-quality as they imagined. Therefore, before concluding a cooperation agreement and trusting specialists, you need to learn about their experience in your specific field of activity.
If you ask an IT company to create a website or mobile application, the developer should know your target audience’s needs and how best to keep it on the platform. It is easier to detect logical inconsistencies when you understand how a client’s business works and helps a person. Those who understand your business will suggest how to improve the product in the end.
Therefore, maximum efficiency is achieved when each team member understands what they are doing in the project and why they are doing it. As a rule, this is impossible without understanding the domain area, i.e., the essence of the client’s business. It means that a certain universality of knowledge is already required from the programmer.
Changing Requirements and Technologies
The factor that significantly influences the success of a project launch is the change management process. Digital technologies change very quickly, and if you do not follow their development during the implementation stage, the assessment process will be flawed.
If an IT company cannot manage changes during the project’s development (introducing emerging new requirements, etc.), it will be behind those startups that keep up with the trends.
For example, chatbots are now at the peak of popularity helping to serve customers even more efficiently. They answer standard questions from buyers and offer them a promotional product or even advice. Many client-oriented entrepreneurs have long turned to Powercode to develop a chatbot and are successfully implementing it, making it easier for employees and saving customers time.
Letting Only One Specialist/Department Estimate the Project
Also, there is often a situation when only one specialist or department makes software project estimation. Often, programmers tend to overestimate their capabilities, while the head of the development department, on the contrary, is inclined to put too high risks in the assessment and be reinsured. This leads to underestimation and overestimation. Therefore, you need to create a symbiosis of managers and technical specialists here.
Some people use particular calculations for the estimation of projects: the time it takes for a programmer to complete a task can be multiplied by 3-3.5. The result will be a real laboriousness from the formulation of the task to its transfer to the user (which will include testing, training, etc.).
Not Specifying What Estimation Includes in Writing
The lack of an evaluation process and its includes is a fatal mistake. For the customer and the specialists to be satisfied, it is necessary to build the assessment process in the company logically. It can be complex or straightforward, but it must be scheduled: the specific steps in the process and the project’s beginning and end. In an effective team, it does not happen that different people at different times evaluate projects according to personal criteria.
Do not forget about agreeing with the work results and various types of documentation. Often this moment is ignored: they estimated the costs of software development and implementation cost – and that’s it. If it’s a large project, organizational issues can be time-consuming, so be careful about this.
Choosing The Wrong Outsource Model
When choosing an outsourcing model, many make mistakes with a financial factor: the cost of using a particular form of service provision is assessed in combination with possible risks and compared with the option when the same amount of work is performed on their own. Before choosing an outsourcing model, every company faces the importance of keeping track of changes in the market. The most famous models are: “fixed cost” and “time and material.”
The “fixed cost” model implies that before starting the project, the service provider’s scope of work and the amount it will cost the customer are clearly defined. The peculiarity of the “time and material” is the absence of a well-defined cost of the project: the customer pays for the actual amount of work performed by the outsourcer, by the time spent on them, and the hourly rates of the contractor’s specialists.
Suppose your company uses a small number of information systems that do not have a substantial impact on the project’s success, but at the same time, there are tasks associated with minor functional improvements or support for use. In that case, the option with a fixed cost is suitable for you. If you use a significant number of systems on different platforms, you need to have business-specific competencies for further development. The only correct solution would be a model “time and material,” whose specialists will study the systems, speak the same language as you, and understand the tasks accurately.
How to Avoid Mistakes in Project Estimation
Project estimation is a complex task for which a specialist needs knowledge and experience. Sometimes even experienced managers make the mistakes we talked about in this article. IT can significantly affect the quality of the final product and the team’s motivation.
The Powercode team recommends communicating with customers more often and discussing every detail of the development plan. Remember that the main thing for a business owner is quality, so an IT company must do everything possible to bring a worthy project to the market! Drop us a line, and we’ll help you with the estimation of your project!
