Module 3: Development Effort and Cost Estimation

Duration: 105 minutes (01:30pm - 03:15pm)

This module focuses on converting size estimates into effort and cost projections using established models and techniques.

Table of contents
  1. Learning Objectives
  2. Quick Exercise 3.1: COCOMO Model Application (30 minutes)
    1. Background
    2. Project: E-commerce Web Application
    3. Task 1: Basic COCOMO Calculation (15 minutes)
    4. Task 2: Effort Adjustments (15 minutes)
  3. Advanced Exercise 3.2: Cost Estimation and Budgeting (30 minutes)
    1. Background
    2. Project Team Structure
    3. Task 1: Indirect Costs (10 minutes)
    4. Task 2: Risk and Contingency (10 minutes)
    5. Task 3: Budget Phasing (10 minutes)
  4. Module 3 Summary
    1. Key Takeaways
    2. Best Practices Checklist
    3. Next Steps
  5. Additional Resources

Learning Objectives

By the end of this module, you will be able to:

  • Apply the COCOMO model for effort estimation
  • Perform task-based estimation with confidence intervals
  • Assess developer productivity factors
  • Calculate project costs including overhead and contingency
  • Compare different estimation approaches for accuracy

Quick Exercise 3.1: COCOMO Model Application (30 minutes)

Background

The Constructive Cost Model (COCOMO) provides a systematic approach to effort estimation using project size and complexity factors.

Project: E-commerce Web Application

  • Size: 25 KSLOC (thousands of lines of code)
  • Type: Web application with moderate complexity
  • Team: Mixed experience level

Task 1: Basic COCOMO Calculation (15 minutes)

Basic COCOMO Formula: Effort = a × (Size)^b

Project Mode a b When to Use
Organic 2.4 1.05 Small teams, familiar technology
Semi-detached 3.0 1.12 Medium teams, mixed experience
Embedded 3.6 1.20 Complex systems, tight constraints

Your Assessment:

  1. Project mode for e-commerce web app: ______
  2. Effort calculation: ___ × (25)^_ = ___ person-months
  3. Convert to hours: ___ PM × 152 hours/PM = ___ hours

Task 2: Effort Adjustments (15 minutes)

Apply key adjustment factors to your base estimate:

Factor Low (0.8x) Normal (1.0x) High (1.3x) Your Rating
Product Complexity Simple forms Standard e-commerce Advanced features  
Team Experience Junior team Mixed experience Senior team  
Development Tools Basic tools Standard IDE Advanced tools  
Time Constraints Relaxed Normal Tight deadline  

Adjustment Calculation:

  • Base Effort: _____ hours
  • Combined Multiplier: ___ × ___ × ___ × ___ = _____
  • Adjusted Effort: ___ hours × ___ = _____ hours

Advanced Exercise 3.2: Cost Estimation and Budgeting (30 minutes)

Background

Convert effort estimates into comprehensive project costs including all components and contingencies.

Project Team Structure

Role Count Rate ($/hour) Allocation % Hours Cost
Project Manager 1 $90 100%   $
Senior Developer 2 $85 100%   $
Mid-level Developer 2 $65 100%   $
QA Engineer 1 $60 100%   $
UI/UX Designer 1 $70 50%   $

Total Direct Labor: $____

Task 1: Indirect Costs (10 minutes)

Cost Category Calculation Amount
Benefits & Taxes 25% of labor $
Equipment/Software $1,500 per person $
Overhead 20% of total $

Total Project Cost: $____

Task 2: Risk and Contingency (10 minutes)

Assess project risk level and apply contingency:

Risk Factor Low Medium High Assessment
Technology Risk Known tech Some new tech Bleeding edge  
Team Risk Stable team Some changes New team  
Requirements Risk Clear/stable Some changes Evolving  

Contingency Percentage: __% (10% low, 20% medium, 35% high) **Contingency Amount**: $___ Final Budget: $____

Task 3: Budget Phasing (10 minutes)

Distribute budget across project phases:

Phase Duration Effort % Budget Key Deliverables
Planning & Design 3 weeks 20% $ Requirements, architecture
Development 8 weeks 60% $ Code, unit tests
Testing & Deployment 3 weeks 20% $ QA, production setup

Total Project Duration: _____ weeks

Module 3 Summary

Key Takeaways

  1. COCOMO Provides Structure: Systematic approach to effort estimation with clear adjustment factors
  2. Costs Extend Beyond Development: Include overhead, infrastructure, and contingency planning
  3. Risk Assessment Drives Contingency: Higher risk projects need larger buffers
  4. Team Rates Vary Significantly: Account for different skill levels and experience

Best Practices Checklist

  • Apply COCOMO or similar parametric models for baseline estimates
  • Include all cost components, not just development effort
  • Apply appropriate contingency based on project risk level
  • Phase budget distribution to manage cash flow
  • Document assumptions and methods used

Next Steps

Continue to Module 4: Testing and Schedule Estimation to learn about estimating testing effort and creating realistic project schedules.

Additional Resources

Estimated completion time: 60 minutes