Factors affecting duration and effort estimation errors in software development projects

The purpose of this research was to fill a gap in the literature pertaining to the influence of project uncertainty and managerial factors on duration and effort estimation errors. Four dimensions were considered: project uncertainty, use of estimation development processes, use of estimation management processes, and the estimator’s experience. Correlation analysis and linear regression models were used to test the model and the hypotheses on the relations between the four dimensions and estimation errors, using a sample of 43 internal software development projects executed during the year 2002 in the IT division of a large government organization in Israel. Our findings indicate that, in general, a high level of uncertainty is associated with higher effort estimation errors while increased use of estimation development processes and estimation management processes, as well as greater estimator experience, are correlated with lower duration estimation errors. From a practical perspective, the specific findings of this study can be used as guidelines for better duration and effort estimation. Accounting for project uncertainty while managing expectations regarding estimate accuracy; investing more in detailed planning and selecting estimators based on the number of projects they have managed rather than their cumulative experience in project management, may reduce estimation errors.