Project Estimation Tips When Working with a Dedicated Development Team

A project estimate is the first thing you need to get when you want to hire dedicated development teams. 

Not only does it prepare you for all the things that could happen during the project, but it also ensures the development process is smooth while mitigating any unforseen risks.

Moreover, unlike traditional outsourcing models, working with a dedicated development model means the team will be working on your project only. As a result, a precise estimate is essential for effective resource planning, budgeting, and timely delivery. 

So, we’ll teach you how to do it effectively in this article. 

This piece contains background information on the meaning of project estimation in dedicated development team settings, some effective project estimation methods, and project estimation tips to execute these techniques effectively. Whether you’re building a mobile app or a large enterprise solution, every estimate sets the tone for successful custom software development.

Ready? 

Understanding Project Estimation in Dedicated Development Team Settings 

Project estimation is the process of predicting the cost, time, and resources needed to execute a software development project successfully. It is a crucial and often the initial step before you hire dedicated development teams.

In the context of dedicated development teams, the elements of comprehensive project estimation include: 

• Resources: Resources in the context of a dedicated development team include the equipment, such as development tools, services, and testing devices, as well as the number of software development professionals needed to execute that project. 
  
  
• Time: This refers to a detailed breakdown of the time it’ll take to wrap up the project and the time it will take to complete certain milestones within the project. 
  
  
• Cost: This refers to how much you need to complete a software development project to avoid budget overruns. It is important to estimate the cost only after estimating the resources and time required to complete the project.

Many businesses prefer to hire remote developers as part of their dedicated teams to access global talent and stay cost-effective.

Related Read: How to Hire .NET Developers: A Complete Guide

Top 8 Project Management Estimation Methods for Dedicated Development Teams 

When working with a dedicated development team, the following are some proven project estimation methods for forecasting the time, cost, and resources required to complete any project successfully. 

Let’s examine what each method is all about.

1. Top-down estimation technique

The top-down estimation technique is a project estimation method that involves estimating a development project’s overall scope, dividing it into smaller bits, before finally allocating the cost, resources, and time required to complete each task. 

It’s a quick way to get a rough idea of time or cost when you don’t have all the details yet. The estimate comes from past projects or expert opinions, so it’s not super precise but good enough to decide if the project is worth pursuing or to set initial expectations.

This technique is good when working with a dedicated development team and not having enough accurate information at the beginning of the project. It’s also useful when you need rough estimates for quick budget approvals. 

However, you’ll start learning more about the correct details when the project commences, so you should be ready to make adjustments as soon as possible. 

2. Bottom-up estimation technique 

The bottom-up project estimation technique involves dividing a project’s entire scope into smaller units and evaluating the resources, time, and cost required to complete each unit individually. 

It’s like the inverse of the top-down estimation technique. 

This is because the project manager literally envisions how they would commence the project, take it through the different development stages to completion, and outline all the steps involved. Then, they would evaluate how much time, resources, and costs are required to handle each step individually. Finally, you’ll do a final project aggregation to get the final project estimate. 

It clearly differs from a top-down estimation technique in that the former starts with a project estimate and tries to allocate the estimated cost, time, and resources to the different stages of development. 

Consequently, the bottom-up technique is a good technique for development projects built using the waterfall and agile methodologies. 

3. Parametric estimation technique 

Parametric estimation is a near-accurate project estimation method that relies on historical project data with similar project parameters to estimate a project’s cost, time, and resource requirements. 

Think of it like this: if you know how much it cost, how many developers, and how long it took to build a mobile app with profile creation and user authentication features in a previous project, you can use that information to estimate the cost, time, and resources to develop a mobile app with just profile creation features in a new project.

As such, it is ideal for projects with identical repeatable tasks, standardized projects, and organizational initiatives that have enough historical data. Since the business or organization has done it multiple times before, it becomes relatively easy to calculate its potential cost, time, and resources. 

This is because it relies heavily on math, statistical models, and AI analytics. In fact, recent advancements in AI models and improved data collection methods have made the parametric estimation technique even more accurate. 

4. Three-point estimation technique 

The three-point estimation technique applies a mathematical method to predicting project estimates, especially when estimating time and cost. 

Let’s say you’re estimating the cost of completing a particular task. The three-point estimation method requires you to assign three different cost values to the task at hand. 

These cost values are: 

• Most likely (ML) cost (expected scenario) 
• Optimistic cost (best case scenario)
• Pessimistic cost (worst-case scenario)

The real meanings of these terms are implied in these use cases. 

Once you have these values, the three-point estimation technique now assigns an equal probability of occurrence to each of them. Therefore, your final project estimate is obtained by finding the average value of all three. 

Consequently, the three-point estimation technique is best for projects with a high probability of experiencing different outcomes. This method helps to mitigate any risks in case something comes up during development. 

5. PERT (Program Evaluation and Review Technique) 

PERT builds on the fundamental principles of the three-point estimation technique by assuming that the ‘Most likely (ML) or expected outcome’ discussed above has a higher chance of occurring than the other two. As such, instead of predicting a final project estimate by finding the average value of all three, PERT analysis predicts a final project estimate by giving four times the weight of likelihood to the most likely outcome. 

In practice, this means it divides the sum of all three values by 6 instead of 3 as in the three-point model. 

Because of this higher probability of accuracy, PERT analysis is ideal for complex projects that require near-perfect estimates. 

This is the reason why many dedicated development teams now rely on machine learning and real-time analytics to augment the PERT technique. These advanced computational methods make it easy to visualize network diagrams in project management, especially in situations where the project flow has numerous task dependencies. 

6. Analogy-based estimation

When you know little about a project and need to make a rough project estimate, the analogy-based project estimation technique is one of the most reliable methods you should apply. 

It shares some similarities with the parametric estimation technique because it also relies largely on historical data collected from past projects. 

Here’s how it works: 

The project manager simply gathers enough historical data about previous projects similar in scope to the one at hand, analyzes the data, and makes a rough project estimate for the current project. This estimate is not often absolutely accurate, so the project manager has to make necessary adjustments when new information about the current project surfaces. 

This is why most agile dedicated development teams trust this project estimation method to get the ball rolling before making relevant adjustments based on the new details. 

7. Expert opinion-based estimation technique

An expert opinion-based estimation technique, as you might imagine, involves arriving at a development project estimate based on the official opinions and recommendations of software development specialists who are specialized in your project’s niche.

Let’s say you’re trying to build an enterprise solution from scratch. You could get a project estimate for this project by allowing a group of CTOs who have built enterprise solutions in the past to give their opinion on the best team structure you should assemble, budget requirements, and estimated timelines. Sometimes, the different specialists you’re consulting with may give different opinions, and that’s okay. When this happens, it is advisable to allow them to deliberate and come to a middle ground before getting a final verdict.

Finally, expert opinion-based estimation techniques should be used in combination with other project estimation techniques, such as bottom-up, top-down, or any of the ones discussed earlier. The key is to use them as a confirmatory test of some sort. 

8. AI-driven estimation techniques 

AI-driven estimation techniques involve simply using AI tools to get rough project estimates. 

Advancements in AI technology have greatly improved the ability of certain statistical tools to make accurate forecasts based on historical data. So, with AI-driven estimation techniques, project managers leverage AI tools to make data-driven and unbiased estimates based on the information provided about the project. 

The AI algorithms make these predictions based on the historical data available on online resources, in-house organizational data, and previous project information. By so doing, the technique is very similar to parametric and analogy-based project estimation techniques. However, they’re faster and more detailed. Nonetheless, it is very advisable to combine AI-driven estimation techniques with other techniques like expert opinions and PERT analysis to get a more balanced perspective before commencing the project. 

Also Read: How Much Does it Cost to Hire Blockchain Developers

6 Game-changing Project Estimation Tips to Get the Best Out of Dedicated Development Teams 

Regardless of any of these project estimation methods you’re already thinking of using, the following are some vital tips you must apply to ensure success when working with dedicated development teams. 

1. Have clear goals, requirements, and project vision 

A clear understanding of your project’s goals, requirements, and project vision keeps you with a well-rounded perspective of what’s needed to execute the project successfully. 

Try to visualize how the project progresses from the beginning to the final stage. All these factors, from the number of developers you may need to complete a project of that scale to other professionals that should be on the team, should be well laid out. Furthermore, when estimating costs, factor in their average wage expectations, development tools, and more. 

If you can’t do this, you will likely be unable to make accurate estimates. 

2. Divide the project into bite-sized parts 

Many project owners and managers become overwhelmed by the scope of their projects when trying to make estimates. 

But they shouldn’t have to. 

One of the best ways to avoid this is to divide the entire project, based on its roadmap, into individual work sequences. This will help you pinpoint exactly what needs effort, time, and money, and, most importantly, how much each work sequence needs. This is your strongest chance at arriving at a project estimate that is as close to reality as possible. 

3. Eliminate unnecessary elements 

Another common mistake project owners and managers make is that they often try to account for all intangibles in an effort to ‘not leave anything out.’ Doing this can crowd you out and lead to excessive budgeting. 

What you should do instead is to be realistic, focus on the non-negotiables, and eliminate unnecessary elements. From software development tools you are already subscribed to, to professionals who’ll be surplus to requirements in the dedicated development team, identify the unnecessary elements and keep your estimate lean. 

4. Don’t set a budget before considering the required time and resources 

Cost estimates should always be a final piece of the puzzle and should only come after you have accurately estimated the time and resource requirements. This is because prices can be very dynamic. Furthermore, the budget usually determines the overall tone of the project. Therefore, you want to avoid a situation whereby the project experiences a budget overrun or insufficient budget when you’re halfway through. 

5. Add a margin for future changes and contingencies 

Whether it is budget limits, number of developers, or amount of other resources, you should include a margin for error to accommodate contingencies. 

You don’t want to be caught off guard by a last-minute spike in developer fees or tool subscription charges. Therefore, endeavor to prepare a certain percentage of total costs, time, and resources that will give you a cushion against any unexpected stress. 

6. Cross-check your estimates before commencing the project

Finally, before giving the dedicated development team a go-ahead to make provisions based on the project estimate you have at hand, ensure you run some final checks to ensure your calculations are accurate. 

Conclusion 

An accurate project estimate starts with a clear scope, the full involvement of the dedicated development team, and the accurate execution of the right project estimation methods. 

Whether you’re using the bottom-up, top-down, three-point, PERT, or expert opinion-based estimation technique, the most important factor is ensuring all aspects of the project are well catered for. 

Applying these powerful tips will help you unlock the full potential of your dedicated team and achieve your project goals efficiently and confidently, and that’s exactly what we do at Debut Infotech Pvt Ltd. Hire dedicated development team increase your project’s chances of success by starting with a project estimate that truly addresses all stages and requirements of your project. 

Related Read: How AI Developers for Hire Can Drive Business Success

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