Software Cost Estimation for a Dutch Construction Company

The Issue at hand

The company has built its own Enterprise Resource Planning application in the past, and this system is end-of-life as it gets harder to maintain. Therefore, the company decided to rebuild the application using modern technologies. An external party has been contracted. After a successful Proof of Concept, the decision was made to start the development of the project. The external party has provided an estimate of the total costs based on the number of sprints that are envisioned and the cost per sprint based on the team composition and hourly rates of the team members. We were asked to carry out a study to answer the following questions:

• How realistic is the estimate provided by the external party?

• What is the quality and completeness of the project plan, and the risk management measures in place?

• How can the project be managed in an objective way, using objective measurements of output and code quality?

• How much maintenance cost is envisioned after completion of the project?

The Service Provided

We carried out the study in only 4 weeks and were able to answer the questions posed. The activities carried out were:

• A Software Cost Estimation study as a second opinion of the estimate of the external party. We used Nesma Functional Size measurement (done by a certified analyst), Galorath SEER-SEM technology, and our project database with data of over 12000 finished projects to assess the reality value of the bottom-up estimate provided by the external provider.

• An independent audit of the project plan and the risk management measures in place, by studying the documents and by organizing a workshop to clarify certain questions.

• A pragmatic advice regarding the way the project can be managed objectively, using objective measurements of output and code quality by using the knowledge and skills of our experts and the current international standards and best practices on this subject.

• An estimate of the maintenance cost envisioned after completion of the project, using the functional size measured and our cost data of maintenance and DevOps teams in similar technologies and of similar size.

The outcomes achieved

Although the project plan and the estimate of the external party were well substantiated, our experts gave several important recommendations regarding the management of the project and the additional risks our experts identified. The success of the project largely depends on the close monitoring of the objective metrics productivity (hours spent per function point and number of stories per sprint) and the code quality measured based on the current ISO standard or automated source code quality measurement ISO 5055:2021.

By following these recommendations, the company will be able to manage the project and deviations from the planning and the estimate will be noticed as early as possible in the project, which allows the steering committee to make early decisions based on actual data and facts when necessary.