The Full Guide on How to Estimate Software Development Time

According to a recent study, only 40% of projects meet their timeline, budget, and objectives. Your project could be one of them. Can you imagine it? However, you can avoid such a future for your project if you estimate the software development time correctly. We have taken care of it and made a list of basic steps you need to go through to get a realistic software development time.

Read on to learn how to estimate the time needed to build and launch your project.

What is Software Development Time Estimation?

This concept refers to measuring the time required to start and complete all software development activities. Estimating software project time involves assessing several parameters and aspects that can affect the duration of the development process, including:

• Team size and experience
• Product type and complexity
• Availability of tools and technologies
• The need for additional expertise
• Discussion of interim results with the customer
• Refinement
• Custom design solutions
• Adding new tasks related to software development, etc.

When calculating the time it will take to build a software solution, you should also include additional time known as a risk buffer (time spent on contingencies) and time eaters (e.g., your engineers got sick, you spent too much time in a previous meeting, the client asked for additional features or detailed explanations of what was done, etc.).

Including buffer risk and time eaters in the development estimate is like hedging your bets.

And one more thing. When trying to answer questions about development time prediction, you may come across an answer that sounds like this: "It all depends...". You have probably heard this phrase many times before. And, oh boy, it's true. And yet, time estimation techniques are still used in software development because they save the team and the customer time and a lot of money. And even more. Did you know that about 70% of projects fail, and the main reason is an incorrect time estimate for product development? Let's update another statistic - the percentage of successful projects due to proper software development time estimation.

Why you Need to Know the Software Development Time

Knowing the software development time is essential so that you know how long (in hours) it will take to complete your software project. It can be compared to renovating a house... Oh no, no way, that's too complicated, you might argue. Okay, let's compare it to a flower shop. Yeah, much better.

Let's say you want to open a flower shop and you want to make a budget and time estimate:

• You estimate how long it will take to start a business.
• As you work, you discover that the flowers you need are out of stock. You have to replace the planned product with another one, which takes time.
• Then it turns out that the flowers need to be stored under different conditions. You need to replace the equipment.
• The flower shop is not yet open, but you already know that you need to sell coffee and books here as well.

Do you see what's happening? Well, yes, business needs can change, as can the time and budget you originally estimated. And it's not about the flowers anymore, it's about your software solution.

Benefits You Get from Estimating Software Development Time

If you apply certain time estimation techniques to software development, you will definitely reap the benefits. Let's see what those benefits are.

What you get as a customer:

• A clear idea of when you will get the product. This is especially important if you have a product presentation or a large corporate event coming up.
• You can rest assured that you will meet the deadline.
• You have complete control over the process and are aware of any schedule or budget changes and their impact.

Benefits the software development team receives:

• We can allocate tasks/resources wisely and in advance, and manage deadlines and workload.
• We get an idea of which specialists should be involved and at what stage.
• We deliver your product on time.

Getting tangible benefits from measuring software development time is a good thing. However, there are more important reasons why you should measure development time accurately.

How to Estimate Software Development Time Correctly

We're getting closer to answering the question of how to estimate software development time. There are specific steps and methods for measuring development time, so let's look at them one by one.

Steps to Estimate Software Development Time

As you've probably realized by now, estimating the time needed to complete a project is not a trivial task. There are so many things to consider. In addition, the topic of using AI in the software to be built has not yet been touched upon. However, there is a list of clear steps that can keep you and your team on track when estimating development time.

Step 1. Define the product type, scope, and complexity

Software project planning begins with an assessment of what we have now, which is detailed information about the product to be created.

The first step is to gather as much information as possible about the project:

• What will the product be used for?
• Who are the primary users?
• What tasks will the system perform?
• What are the customer's business goals for this product?
• Who are the competitors?
• What does the client want from the development team?
• If this is complex software development, what should the result be: a full-featured system or just an MVP?

In addition, the development team and the client should discuss all ideas and possible ways of implementing the system, technical documentation, requirements, personal preferences, etc. All of this should be documented, of course.

Another thing you need to figure out in the first phase is the criteria for product readiness, i.e. how you will know that the project is finished.

And what else you need to do is find out if you have all the resources available:

• Money;
• Extra time;
• Necessary expertise, and so on.

By the way, you should make sure that your IT outsourcing team has expertise in artificial intelligence because you can't do without using solutions like GPT chat, or generative AI solutions in your product.

As you can see, the first step is to find out where you are and what resources you have.

Step 2. Break the project into smaller, manageable tasks

If you already have a complete scope of work for creating a software product, you can start by creating a list of very specific tasks. This approach makes it easier to estimate development time because you can see what you need to do and understand at least the approximate time it will take.

It is also a good idea to visualize each task to see how they relate to each other and what needs to be done next, and to create a checklist of system features against which to check the final result.

Step 3. Estimate the time required for each task using appropriate methods

Don't beat around the bush, start estimating time. There are several proven ways to do this:

• Expert opinion. It's not hard to guess what this means. You need to consult the most qualified team members who have the relevant experience and can provide an estimate of the time required to complete each task.
• Mathematical approach and modeling. This approach involves the use of algorithms and mathematical calculations to make predictions about project timelines.
• Finally, historical data analysis. This involves using the team's previous experience with similar projects. It pays to look for similarities and trends between them, which will tell you the approximate time for product development.

To learn more about software development time estimation methods, read on. By the way, you can estimate the time for the project in any other way, based on the expertise you have.

Step 4. Review estimates with the team and stakeholders

Now it's time to discuss the task list and the preliminary development time estimate with all the stakeholders involved. Your team should give their opinions on the existing time estimates, as well as whether they have any concerns, things that have not been considered, or new ideas.

Also at this stage:

• Agree on the technical stack, the technologies, and tools to be used in the work;
• Assign tasks according to the expertise and experience of each team member so that everyone is in the right place and can achieve the goals.

Remember that you’re still in the software development estimation phase, so get your team involved in discussing this key issue. This will give you a more accurate estimate of development time and show that you value your team's contributions.

Step 5. Set the project timeline, initiate development, and monitor progress

Now that the initial work is behind you, create a clear plan that describes each task and the time needed to complete it in a clear sequence. This will be your roadmap.

Later, keep track of whether everything is going according to plan. Set checkpoints or milestones to help you track your progress. Don't forget about buffer risks and time eaters - they increase development time.

Why is it Important to Estimate Time for Software Development?

Well, you might say that time management seems to be very important in software projects. But why exactly? What is the impact of a clear (as much as possible) estimate of the time required to create a software product?

It's a reasonable question. And we have something to say about it.

Estimating software development time is important because:

• You can set clear goals for IT outsourcing developers and count on clear and expected results;
• The software development team can avoid unnecessary costs and actions;
• You can deal with unforeseen circumstances without compromising the quality of the product or its development time;
• You avoid problems that could delay the completion of the project because you know what to expect;
• The project team and the client are on the same page about the progress of the project, avoiding communication problems;
• You have a clear roadmap to follow to achieve your goals;
• More work, less talk;
• You can make necessary adjustments promptly;
• You will bring your product to market on time without losing business opportunities.

In fact, the reputation of the project team and the success of the client's project are at stake, as well as a lot of money, which is quite significant. Do you now understand why experienced software development teams estimate software development time before starting any development-related processes?

Well, let's move on.

Why can Software Development Time Estimation be Difficult?

As with the reasons why estimating time is important, the situation is similar with difficulty, because there are valid reasons why this task can be challenging. If estimating development time were so easy, no one would bother with it. However, if you look closer, you will see that the process of developing a software product is complex, multi-step, multi-level, and involves many specialists with different backgrounds.

Let's take a look at the reasons why estimating software development time can be difficult:

• It's hard to predict exactly how long a particular development step or task will take, and it's impossible without at least minimal relevant experience.
• There are additional tasks, unforeseen circumstances, and other reasons to spend time in the wrong place.
• The specialists involved in the project development may not have the skills or knowledge needed to complete the project on time or according to other conditions.
• Every project is unique. Even if you have worked on a similar project in the past, your current project may have options, modules, or development tasks that affect the overall project complexity and development time.
• The lack of currently required technologies or expertise can increase development time because it takes time to hire developers with the right expertise or to access the necessary technologies, tools, and information.
• There may be some trivial technical issues that slow down software development significantly.

However, no matter how many difficulties arise, they can be overcome if you involve really experienced engineers, designers, project managers, etc. in developing the software development project plan and measuring the time required to develop the project. In short, it helps to have an experienced project team on your side.

What Activities does Software Development Time Cover?

In answering this question, we are actually listing the components of the development process, i.e. the steps without which it is impossible to create a software product.

Idea analysis and requirements gathering

To estimate the product development time, you need to be guided by clear requirements and follow the chosen idea. To do this, at the very beginning of product development, the idea is analyzed and the requirements are collected and organized in an SRS document. All stakeholders must be involved in discussing these issues to avoid misunderstandings or unnecessary actions in the future. In addition, involving a variety of expertise will provide an understanding of the target audience and their needs, product goals, and possible additional features, and help meet business requirements.

Product design

Once you've clarified your product idea and what it should do, it's time to create the product. There are several steps to creating a product, including:

• Developing the overall structure (architecture) of the system;
• Designing the data models, i.e., understanding how the data will be organized, interconnected, and accessible;
• Designing the product interface to meet the needs of the users.

At the system design stage, many decisions need to be made regarding technologies, user-system interaction, the system architecture itself, taking into account possible future scaling, etc. This is where developers spend their time.

System coding

It's time to build the product. The documentation obtained in the previous stages, i.e. product requirements, design, system architecture, etc. is used as a basis. The coding process itself is time-consuming. Programmers not only write code but also test and document it. In addition, they ensure that the product can be integrated with other systems and resolve any issues that may arise during coding, feature building, and third-party integration.

This is perhaps the most time-consuming phase of software development.

Software solution testing

This is an important stage and should be taken into account when estimating the software project time, because testing takes a lot of time. It's necessary to make sure that the system works properly, and for this purpose, not just one type of testing is involved, but several:

1. Integration testing, which shows how different parts of the product work together;

2. Modular testing. This is about testing each part of the system on its own to see if it works properly on its own.

3. System testing. Here, the aim is to assess how the entire system works together.

All in all, testing is not only about checking the product but also about eliminating problems or "surprises" in the functioning of the system.

Fixing bugs and improving the code

The testing phase transitions smoothly into the bug-fixing and code-improvement phase. That's why it's important to hire a development team that is well-versed in estimating development time. They can properly estimate and execute this transition.

You should know that there is no clear list of bugs that your engineers will encounter, and there is no exact mechanism for fixing each of them. It all depends on the specific case. Some bugs may be unique or too complex, and fixing them may require changes to the product structure itself. When the development team working on your web-based platform or mobile application finishes fixing bugs, they move on to code review. The goal is to ensure that the code is of high quality and follows coding best practices.

Product deployment

This is almost the last stage, but it also takes some time. During the deployment process, which is the process of transferring the product to users, the software developers you've hired will need to set up servers, ensure the smooth operation of all systems that support the functioning of the software, configure environments, manage data migration, and so on.

Documentation and Project management

These steps may not seem obvious, but they take a lot of time, so they should be taken into account when estimating the time required to build a system.

First, documentation is a lengthy process in which developers describe in detail what the system is and how it works. That is, they create technical product documentation for developers who will be handling the system in the future.

In addition, developers must also create user manuals for those who will work with the software product. All these system descriptions take time.

The second one is project management. If you choose the staff augmentation model, you will need an experienced project manager. He or she will be responsible for organizing the entire process. Think about it - project management involves planning activities and tasks, assigning responsibilities, managing resources, communicating with all stakeholders, and ultimately ensuring that the project is completed on time and within budget. Typically, an agile project management approach is used to ensure that each phase runs smoothly. In addition, as the customer, you are kept informed of progress and can make adjustments or provide ideas midway through the development process.

And last but not least.

Post-launch system maintenance

When development takes place within the Agile development timeframe, you can be confident that your product will be ready for use on time. This is not to say that the work does not stop after the product is released. There is a long process of system maintenance that involves monitoring how the product is performing, whether there are any bugs or problems, and if there are, how those problems should be fixed. When the software development estimation process takes place, the maintenance phase is also included and therefore affects the overall system development duration.

Software Development Time Estimation Methods

It seems like everything is pretty clear with the development time estimation. But... don't you think something is missing? How exactly is this estimation done? The most commonly used methods are described below.

Bottom-up software development estimation

When the total development time is known, technicians may overestimate their performance and exceed the time. You can avoid this problem by breaking your task list into smaller chunks.

Imagine you have a clear list of all the tasks that make up the product development process. You need to estimate the time it will take to complete each of them. Once you have that time, you can see the overall picture of the time required to complete the entire project. This is a bottom-up approach to estimating time.

Typically, two professionals are involved in time estimation:

1. The developer. He or she creates a specification that outlines all the tasks, divides them into groups or subtasks, and estimates the development time.

2. An independent professional from the company (for example, a senior project manager). He or she reviews the developer's time estimates to make sure they are realistic. If necessary, adjustments are made.

There is also a reverse method. It is described below.

Top-down software development time estimation

Unlike the previous method, you should start with a general idea of the time it might take to develop a product. That is, you don't need to break down the entire development project into smaller stages, but rather estimate the time required as a whole.

Planning Poker

This approach to estimating software development time uses principles similar to those of Agile methodology and poker. How does it work?

• The customer provides the team with the task.
• This information is discussed within the team and follow-up questions are addressed with the client.
• A backlog of tasks is created.
• Team members meet to figure out how long it will take to complete the tasks in the backlog.

Estimating software development time using Planning Poker looks like this.

Each developer gives his or her estimate for the task at hand. They use cards with numbers on them. Each team member has a set of cards with the values 1, 2, 3, 5, 8, 13, as well as 21, 34, 55 (according to the Fibonacci sequence) or 20, 40, 100 instead of the last three.

There are also three non-numbered cards. They contain an infinity sign, a question mark, and a picture of a coffee cup.

Each User Story (a 1-2 sentence description of what the system should do) is assigned a card whose value corresponds to the estimated effort required (Story Points). A card with the number 1 means that the User Story is easy to complete. The further away from 1, the more difficult the story seems to be. An infinity card represents the highest level of difficulty.

If the numbers chosen by each developer are the same, it means that the estimation of the required effort is correct. In case of disagreement, the final scores are clarified during the team discussion.

This step isn't just about estimating software development time in hours. So far, only story points have been defined. To have an idea of how this is represented in hours, you need to know the hourly value of the story point.

It's important to note that poker planning is about discussion. Imagine that you have real experts involved in your project. Each of them argues their decisions, and the details of the project are thoroughly discussed. Chances are you will get an accurate time estimate.

Experience-based approach

This approach requires a comparison of the new project with a similar project in the past. In this case, you need to start with the time it took to implement it. It's also necessary to determine the difficulty level of each. By multiplying the number of hours by the difficulty factor of the previous project, you can estimate the development time for the upcoming project.

View-based approach

In this case, you should start with three estimates of development time based on three perspectives:

1. The most likely time;

2. Optimistic time estimate;

3. Pessimistic time estimate.

The average is the one that comes closest to the realistic time estimates for developing a software product.

Project estimation in numbers

Let's turn to the following examples to better understand the essence of this development time estimation method.

Overall Estimated Time (OE) + OE*Buffer Time + OE*Time Eaters = Software Development Time

Let's plug in some numbers (numbers are approximate):

5000 (OE) + 5000*20% + 5000*20% = 7000 hours.

Let's go further.

Imagine that we need to implement the "multiple accounts" option on Instagram. To do so, we need to think about all the possible actions that users can take:

• He/she wants to add an account.
• He/she can choose the "Sign in to existing account" option, which requires him/her to enter a username and password or log in through Facebook.
• The user may have forgotten his or her login or may not be authorized to use Facebook.
• The user can select the "Create a new account" option, which will prompt the system to complete the registration steps.

Given the differences in user behavior, you can define a list of tasks that developers need to complete for users to add a new Instagram account.

What this looks like in terms of tasks, technicians, and time estimates:

• Design a page with all the necessary fields and an understandable user scenario.
• Make sure the user is authenticated by finding out if he or she is allowed to access the requested pages.
• Create a redirect according to the authentication result: to the requested Instagram page, to the Facebook page to complete authentication through Facebook, to the page with an authentication error, etc.

As a result, it would take 13 hours of technical work for a user to be able to switch between multiple Instagram accounts.

Want the easiest way?

Estimate software development time based on features

It's simple: the more features a system has, the more time it takes to develop. This is because more integration and testing are required, which means more time.

Now let's move on to the things to consider when estimating software development time.

Key Considerations for Estimating Software Development Time

Despite the steps described above, there are additional factors that can affect an accurate estimate of software development time. Let's see what they are.

Lack of experience and skills on your team can lead to delays

This is about how experienced and skilled your development team members are. The more relevant experience they have, the easier it will be for them to deliver the results you want. Conversely, if you have an inexperienced team estimating your product development time, chances are you're in for some frustrating surprises.

There will be risks and uncertainties, and you need to accept this reality

No project is immune to risks and surprises that can lead to unplanned time overruns. You may need additional expertise, developers may have difficulty implementing certain functionality, it may take a long time to get a certain product feature approved, and so on. You should anticipate all of these issues (or at least some of them) in advance to reduce their number and impact on development time.

Change is unavoidable during the project

As you build your product, some things will change, and that's okay. For example, some features may become useless, or you may decide to add new ones. The risk buffers and time eaters that are an integral part of the software development process help you deal with these changes. It's all about flexibility.

Communication issues may occur

Since development is a team effort, it's very important to establish and maintain smooth communication within the team. Give everyone a voice and make sure no one is left out. Once you lose that sense of unity, you're bound to have problems getting along and working together.

AI in Software Development Time Estimation

What else can be used to get an idea of the correct software development time estimate are various AI-based tools. We are talking about predictive analytics based on artificial intelligence.

The good news about using AI-powered tools to estimate development time is that AI algorithms can predict future events or behaviors based on large amounts of data and patterns. As a result, AI can not only estimate project timelines but also identify risks, suggest ways to avoid them and optimize the use of resources. It turns out that in this case, AI is predicting the future based on past data.

However, keep in mind that it makes sense to use such tools only after human expertise has been involved, i.e., AI in software development time estimation should be considered as a complementary method.

Bottom line

At first glance, estimating software development time may seem easy. However, it takes time and full immersion in the process. To ensure that both you and your IT service provider are satisfied with the result, you need to estimate development time correctly from the start.

It makes sense to involve an entire IT outsourcing development team. With their experience, you can get the most realistic time estimate possible. It is in the developers' interest to provide you with the most accurate data possible.

With that said, we hope you now have an idea of why you need a clear time estimate. It allows you to control the budget, track the process, and avoid unpleasant surprises.

If you still don't know how to estimate the time required to complete your product, please contact us and we will take care of it for you.

FAQ

What is software development time estimation?

It means that the project team tries to figure out in advance how long it will take to build a product with specific functionality, taking into account existing requirements, expertise, budget, and other factors.

How do you do time estimation in software development?

There are several methods and ways to estimate software development time. For example, you can divide the project into small tasks, estimate the complexity of each of them, and see the total time. You can also go the other way and rely on the developers' experience to identify buffer risks, time eaters, and other pitfalls. Historical data is also taken into account, and AI-based tools are used to make predictions about development time.

What methods and techniques are used to estimate software development time?

Specifically, common methods include Bottom-Up Software Development Estimation, Top-Down Software Development Time Estimation, Planning Poker, Experience-Based Approach, Project Estimation in Numbers, and many others.

Why is time estimation critical in the software development process?

With an idea of the product development timeline, the customer can be confident that the product will be delivered on time and that business opportunities will not be lost. Budget overruns can also be avoided.

What are the challenges of estimating software development time?

It's hard to know for sure how long the task will take, if there will be unplanned problems, or if the developer will get sick.

How can I estimate the time needed for a software project?

The best way is to ask experienced software developers for help. They are more likely to give you a number that is close to reality because they have the appropriate experience.