The definition and purpose of IT project cost estimation are pretty self-explanatory. What most people are not aware of is how complex and challenging it is to “forecast” the cost of a project.
In a software development project, after software is built, the cost doesn’t just end there, the software needs support, maintenance, and upgrades to keep it running.
It is one of the reasons why IT project cost estimation is considerably different from your regular project cost estimation. But, to make it easier and more accurate you can follow these 10 best practices of IT project estimation.
A. Characteristic of a good project cost estimation document
Before jumping straight into the main topic, knowing the characteristics of a quality cost estimation document is also important. The characteristics are:
B. General IT project cost estimation process
Smooets have worked on many different projects from various industries, and each one is unique, but generally they follow the same steps such as:
- Developing scope and approach
- Gather and analyze data
- Create the estimation
- Document and presentation
C. IT project cost estimation best practices
IT project estimation is a long and complex process, involving a lot of data and experts. To reduce risks, errors, and uncertainty, here are the best practices you can follow:
- Onboard the team to the estimation process
- Be detailed as much as possible
- Do not ignore project’s scope
- Clear up assumptions
- Be realistic
- Account for internal and external risks
- Avoid underestimating
- Use additional tools to help
- Includes experts and other team to cross check
- Document all project’s data for future estimation
What about you? Do you have other best practices?
Without telling you all of the various methods and processes of how to do it, you could tell that this estimation process should always be thorough and based on data.
You’ve probably seen the consequences of a project that goes over budget, it’s either something gets cut from the project or somebody is in debt, and in rare cases the project gets canceled. Who would want any of that?
Budget, resources, and effort are things you don’t want to waste, and to avoid wasting such things when developing a software you need proper teams and experts. Let’s talk about your IT project with Smooets!