Information Systems
College of Business Administration
University of Missouri - St. Louis

At almost any level in IT, estimating is the most important skill you can develop.

What is estimating?

  • Estimating is figuring out (guessing) how much time and money (blood, sweat, tears or overtime) something will take you to do.
  • Usually you will not really know the requirements.
  • Usually, management will have a number in mind when they ask for your estimate.

Approaches to estimation
  • Bottom-up Estimates
    • Break down your task into components
    • Estimate each small piece
    • Add together the estimates for the individual pieces.

  • Top-Down Estimates
    • Start with management's expectations on the range of costs.
    • Try to figure out what you can deliver for those numbers.
    • Offer management a choice they will like.

  • Sanity Checking
    • Take the numbers of days you compute and break it down by people and months.
    • Determine if any combination of people and months "sounds about right."
    • If so, your estimate might be in the ballpark.
    • Ensure you have differentiated "budgeted time" and "elapsed time."

  • Rules of Thumb
    • No task, no matter how small, takes less than half a day.
    • Take what you really think it will take to complete something and double it.
    • On long term estimates, double it and add one.
    • Double it and use the next higher unit of measure.

Types of Project Feasibility
  • Economic
  • Technical
  • Operational
  • Schedule
  • Legal and Contractual
  • Political

Possible IS/IT Costs
Procurement Consulting Costs
Equipment Purchase or Lease
Equipment Installation Costs
Site Preparation and Modification
Capital Costs
Management and Staff Time
Start-up Operating system software
Communications Equipment Installation
Start-up Personnel
Personnel searches and hiring activities
Disruption to the rest of the organization
Management to direct start up activity
Project-Related Application software
Software modifications to fit local systems
Personnel, overhead, .... from internal development
Training users in application use
Collecting and analyzing data
Preparing documentation
Managing development
Operating System maintenance costs (hardware, software and facilities)
Rental of space and equipment
Asset depreciation
Management, operation and planning personnel.
One-time Costs Startup of the system:
System development
New hardware/software
User training
Site preparation
Data/system conversion
Recurring Costs Application software maintenance
Incremental data storage expense
Incremental communications
New software and hardware leases
Supplies and other expenses (personnel)

Possible IT Benefits
Tangible Benefits Cost reduction and avoidance
Error reduction
Increased flexibility
Increased speed of activity
Improvement of management planning and control
Opening new markets and increasing sales opportunities
Intangible Benefits Competitive necessity
More timely information
Improved organizational planning
Increased organizational flexibility
Promotion of organizational learning and understanding
Availability of new, better or more information
Ability to investigate more alternatives
Faster decision making
Information processing efficiency
Improved asset utilization
Improved resource control
Increased accuracy in clerical operations
Improved work process that can improve employee morale
Positive impacts on society.

Project Risk Factors
Project Size Number of members of the team
Project duration
Number of organizational departments involved
Size of programming effort (hours, function points)
Project Structure New system or renovation of existing systems
Organizational, procedural, structural or personnel changes resulting from the system
User perceptions and willingness to participate
Management commitment to project
Amount of user information in system development effort
Development Group Familiarity with target-hardware, software development environment, tools and operating system
Familiarity with proposed application area
Familiarity with building similar systems of similar size
User Group Familiarity with information systems development process
Familiarity with proposed application area
Familiarity with using similar systems

Risk Assessment

Low Structure
High Structure
High Familiarity with
Technology or
Application Area
Large Project (1)
Low risk
Low risk
Small Project (3)
Very low risk
Very low risk
Low Familiarity with
Technology or
Application Area
Large Project (5)
Very high risk
Medium risk
Small Project (7)
High risk
Medium-low risk

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