How to Estimate Software Development Projects

Stages and main points

Do you know what the future holds for us? Neither do we. And that is one reason that makes project estimation extremely challenging. Add the fact that every project is unique due to its dynamic aspects and you will see that there is no straightforward way to estimate. To make it even more complex, there is a pressure of the market since many companies bring up unrealistic price/time frames just to attract the potential client. And that looks daunting, isn’t it?

While it does looks so for a regular person, project managers have some aces in the hole when it comes to an estimate. And successful estimation requires a profound research which generally consists of four basic stages.

Estimating product size

When it comes to the project estimation, first and most difficult step would be to estimate the project sizing. To be able to come up with a fair estimate a project manager has to have a clear vision of the structure of the project, possible bottlenecks, risks and so on.

This information is obtained from the client and it is in his best interest to provide the most precise details for a manager to be able to estimate wisely. Yes, a general estimate can be made very quickly and effortlessly via verbal discussion and sometimes it seems that the request looks very simple and straightforward. However, an assumption made without proper investigation always carries a particular level of uncertainty and risk. And who wants to risk the quality of the product they are investing in? Besides, jumping into conclusions without a ground for them in an area like software development is not very professional. Some clients can take it as a sign that the company is targeted towards getting a paycheck rather than at the responsibilities they will need to fulfill to get it. Potentially such attitude may lead to a loss of money, time, investors and that is definitely not something anybody would want.

Tracking intermediate progress, re-estimating, adding or removing some features, recollecting initial agreement conditions will be close to impossible when it comes to verbal agreements. That is why most of the successful companies on the market pay a lot of attention to keeping their agreements documented. Even though it is not the most entertaining part of the collaboration, you can never underestimate the importance of having SRS, wireframes, design, roadmap and other necessary documentation sorted out. This empowers you to have your requirements fulfilled and have a basis on which you can build a successful partnership on the project.

Estimating workload

As soon as we understand the requirements of the project, we can start estimating the effort it will take to accomplish the task.

The software development part can be estimated using previous experience, algorithmic approach and good old direct communication with the professionals who will be performing the work.

However, that is just a small component of a large unit called project. Working process organization, client interaction, documentation work, design, prototype implementation, quality assurance are also the processes that need to be covered and they are just as important as coding.

At this point, many clients are rather suspicious about the overestimation of the time frame since they do not have a deep understanding of all the processes involved. Choosing a company with a good reputation and checking general time/cost level on the market can help to get a clearer vision of the resources it might take.

The risk of losing the client due to overestimate, the risk of throwing shade on their reputation due to not fitting into a super tight estimate, the risk of having specialists overworking and tired; those are the things that a project manager has to consider and to balance all the parties there is no other option rather than provide a reasonable time frame. So, in case a reliable company is chosen, they will be interested to play fair and provide a decent product.

Estimating schedule

Once we have size and workload covered, our next step will be to figure out the schedule for the project. We need to find out the number of the team members which are going to be involved, how much hours they can dedicate to this project per week and so on.

This will give us an opportunity to operate not only the amount of hours needed, but the particular calendar dates. At the end of this stage we should be able to provide a reasonable time frame for the product release date and be ready to start the project.

Estimating expenses

Estimation of the total cost of the project includes multiple variables, such as labor, hardware and software, training, office space expenses and so on.

Also many times clients get confused by the workforce involved in the project and assume that since they need to “develop ” something, it takes development service only to get the project done. In reality, while the development team is working on their primary responsibilities, project manager supports the client, organizes workflow and makes sure that all the requirements are understood and delivered on time. QA representatives are concentrated specifically on testing which allows to have the ability to check all the range of behavioral models of the customers and detect the most peculiar vulnerabilities. These are very important parts of getting a great functional product and they are worth investment.


As we can see project estimation includes a lot of research, multiple variables to consider and it always faces a certain level of risk. Every project manager realises that only a sound and reliable estimate leads to a successful project management and control. Although there may be certain speculations on the market, the companies that do care about their reputation and reliability tend to provide fair yet competitive estimation.

Choosing a company for a project it is important to keep in mind the long term perspective and think not only about the time and money you spend here and now, but about the quality of the product in a long run.

Recommended Project Management Software

If you’re interested in learning more about top rated project management software, the editors at actively recommend the following:

1 ClickUp

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ClickUp is one of the highest-rated project management tools today. Use Docs, Reminders, Goals, Calendars, Chat, scheduling, assigned comments, custom views, & more with this all-in-one project management tool.

Used by 800,000+ teams in companies like Airbnb, Google, and Uber, it brings all of your projects into a single app! Built for teams of all sizes and industries, Our fully customizable & proprietary features make it a must-have for anyone wanting to keep project management in one place.

Learn more about ClickUp


Visit website Work OS is the project management software that helps you and your team plan, execute, and track projects and workflows in one collaborative space. Manage everything from simple to complex projects more efficiently with the help of visual boards, 200+ ready-made templates, clever no-code automations, and easy integrations. In addition, custom dashboards simplify reporting, so you can evaluate your progress and make data-driven decisions.

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3 Wrike

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Tackle complex projects with Wrike’s award-winning project management software. Break projects into simple steps, assign tasks to team members, and visualize progress with Gantt charts, Kanban boards, and calendars. Manage resource allocation and forecasting with software that’s easy to launch. Automation and AI features strip away time-consuming admin tasks so you can do the best work of your life. Streamline your practices, align your team, and ensure you hit deadlines and stay on budget.

Learn more about Wrike

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