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Course Code: CAP-330 Course Title: Software Project Management

Course Instructor: Miss Namrata Vij

Academic Task No.: 2 Academic Task Title: Term Paper

Date of Allotment: 9/8/2016 Date of submission: 7/11/2016

Student’s Roll no: A30 Student’s Reg. no: 11616866

Evaluation Parameters:

Learning Outcomes: (Student to write briefly about learning’s obtained from the academic tasks)

Through this term paper I learned about how Project Cost Estimation is done through different techniques and paprameters.

Declaration:

I declare that this Assignment is my individual work. I have not copied it from any other student’s work or from any other source except where due acknowledgement is made explicitly in the text, nor has any part been written for me by any other person.

Student’s Signature:

Evaluator’s comments (For Instructor’s use only)

General Observations Suggestions for Improvement Best part of assignment

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Evaluator’s Signature and Date:

Marks Obtained: _______________ Max. Marks: ______________

Term Paper:

Project Cost Estimaton

SUBJECT- Software Project Management

Mittal School Of Business

MBA –IT (1ST YEAR)

SUBMITTED TO: SUBMITTED BY:

Miss Namrata Vij UDAY SHARMA

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11616866

Q1652(A30)

INDEX:

Sr. No. Topic Page No.1 Introduction 32 Cost Estimation 43 Related WORK 64 SOFTWARE COST ESTIMATION

METRICS7

5 Types of Software Project Cost Estimation Models

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6 DISCUSSION AND CONCLUSION 147 REFERENCES 15

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INTRODUCTION:

Software cost estimation gives the essential connection between the general ideas and systems of financial investigation and the specific universe of programming building. Project Cost Estimation is the errand of foreseeing the cost, exertion or efficiency required to finish the task. Ali (Arifoglu, 1993) depicted it as an exact procedure furthermore included improvement time as one of the prerequisites to finish the venture. A standout amongst the most essential issues going up against any product task is the way to precisely foresee the expense of building up the product. Programming cost estimation is imperative for settling on great administration choices. There is no great approach to play out a product money saving advantage examination (Clements, 2011), earn back the original investment investigation, or make-or-purchase investigation without some sensibly precise strategy for assessing programming costs, and their affectability to different item, extend, and natural components (Somerville, 2010). Fetched administration is maybe a standout amongst the most troublesome parts of undertaking administration. Venture directors are all around rehearsed at getting assets, doling out work, following advancement and finishing ventures (Vaughan, 2011). Be that as it may, since there's an expense connected with almost everything their occupation turns out to be a great deal more unpredictable and troublesome. They should make certain the expense of the venture is assessed precisely toward the starting, spending plans are appointed for different parts of the task there are the apparatuses to control costs all through the lifecycle of the undertaking (Simms, 2011). The product cost estimation considers the extent of the venture which was generally dictated by conveyed source lines of code.

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COST ESTIMATING

Project underestimation of assets and expenses is a standout amongst the most widely recognized donors to project disappointment. All things considered, project directors ought to be educated of and consider the different business strategies and instruments in the definition and execution of undertaking cost estimation. As characterized by the cost estimation is the iterative procedure of building up a guess of the money related assets expected to finish venture exercises. Project groups ought to gauge costs for all assets that will be charged to the task. This incorporates yet is not restricted to:

• Labour

• Materials

• Equipment

• Services

• Software

• Hardware

• Facilities

• Contingency Costs

The accompanying rundown incorporates normal apparatuses and systems utilized as a part of venture cost estimation:

• Expert Judgment – utilization of information picked up from past venture administration experience. Master judgment, in conjunction with target estimation strategies, gives important data about the authoritative environment and data from earlier tantamount tasks.

• Analogous Estimating – utilization of the measurements from a past, comparable project as the premise of estimation for the present undertaking. Closely resembling evaluating takes the real cost of past, comparative ventures as a standard and after that alters for referred to contrasts, (for example, size, many-sided quality, scope, length, and so forth.).

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• Parametric Estimating – utilization of a factual relationship between chronicled information and different variables (for instance, lines of code in programming advancement) to compute an evaluation for action parameters, for example, scope, cost, spending plan, and span. Utilized accurately, this strategy can deliver abnormal amounts of precision.

• Bottom-Up Estimating – assessing all individual work bundles/exercises with the best level of point of interest, outlining more elevated amount gauges with the blend of the individual evaluations. The precision of base up evaluating is advanced when individual work bundles/exercises are characterized in point of interest.

• Three-Point Estimates – utilization of three assessments to decide a reach for a movement's cost: the best-case appraise, the in all probability gauge, and the most pessimistic scenario gauge.

• Reserve Analysis – assurance of possibility stores to represent cost instability.

• Project Management Estimating Software – utilization of undertaking administration cost assessing programming applications, automated spread sheets, re-enactment, and factual apparatuses. Such instruments can take into account fast thought of various cost gauge choices.

• Vendor Bid Analysis – assurance of what the project ought to cost taking into account an audit of seller offers/recommendations. This method might be utilized as a part of conjunction with other cost estimation strategies to guarantee that cost assessments are far reaching.

Though the execution of fitting cost estimation strategies surely adds to the precision of cost appraisals, other task administration information regions likewise assume an imperative part in cost estimation exactness. For instance:

• Quality Management – If colleagues don't concur unmistakably upon deliverable quality criteria ahead of schedule in the undertaking, they may take more time to meet desires, pointlessly bringing about a timetable postpone and relating cost overwhelms.

• Communications Management – If colleagues don't obviously comprehend their parts and obligations on the project, project work may take more time to finish, along these lines postponing the timetable and expanding costs.

• Scope Management – If necessities are vague, colleagues may convey items that don't meet desires, bringing about superfluous revamp, plan postpones, and comparing cost overwhelms.

• Human Resource Management – If group faculty don't have the required abilities or experience to perform project work, it might take them longer to finish the work, creating plan postpones and cost overwhelms.

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• Risk Management – If colleagues don't proactively lead hazard administration, cost-affecting issues that could have been forestalled may rise.

• Procurement Management – If acquisitions do exclude terms and conditions that proactively relieve State danger, (for example, settled cost contracts and deliverable acknowledgment criteria), the task may encounter expanded costs later in the project because of changing undertaking and economic situations.

• Time Management – If colleagues don't precisely appraise an ideal opportunity to perform exercises, the task may encounter plan postpones and cost invades.

RELATED WORK:There is a quick development of models in the 1970s through 1990s (Product and Process Innovation Inc, 2009). Couple of new models have been created in spite of the expanding significance of controlling and evaluating programming improvement. Models of 1970s and 1980s are of no enthusiasm to the present expert because of the developing changes in programming improvement (Heemstra, 1992). Amid the previous 40 years, diverse studies looking at programming cost estimation have been distributed (Boehm, 1981; Albrecht and Gaffney, 1983; Putnam, 1978). These early studies utilized information sets of different size and environment. The general results then were poor execution of the procedures when connected to other environment uncalibrated. An average case is the work of (Kemerer, 1987), which thought about four models: Software Lifecycle Management (SLIM), Constructive Cost Model (COCOMO), ESTIMACs and FP utilizing 15 ventures. He reported an estimation blunder as far as mean extent of relative mistake between 85% for FP and ESTIMACs, 601% for COCOMO and 772% for SLIM (Wu, 1997). Kemerer presumed that FP-based cost estimation strategy is a superior approach particularly at the early period of programming advancement. Utilizing a mix of Kemerer information set and COCOMO, Briand et al (Briand, Emam, Surmann, Wieczorek, and Maxwell, 1999)compared organization particular information to multi-hierarchical information. Their outcome demonstrated that exhibitions of the cost estimation methods considered were not fundamentally distinctive aside from relationship based procedure which gave off an impression of being less exact. Mittas and Angelis (Mittas and Angelis, 2008) incorporated into the correlation factual tests to join parametric data and non-parametric by presenting what they called semi-parametric strategy. Their outcome demonstrated that semi-parametric strategy gave more precise assessment than parametric or non-parametric method. This study makes the commitment of assessing and looking at a hefty portion of the basic programming cost estimation strategies that has been utilized as a part of programming designing.

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SOFTWARE COST ESTIMATION METRICS

SOURCE LINES OF CODE (SLOC):

SLOC is an old cost estimation metric which picked up prominence at the early time of PC innovation, giving it advantage over other cost estimation measurements. Its application may take after either unit-per-cost or particular similarity approaches (Briand, Emam, Surmann, Wieczorek, and Maxwell, 1999). It is a product metric used to gauge the measure of code in a product venture. It is utilized to appraise the exertion required to build up a project and profitability once the product is created. A few cost, timetable, and exertion estimation models use SLOC as an information parameter, including the broadly utilized Constructive Cost Model (COCOMO) arrangement of models (Boehm, 1981), Putnam model (Putnam, 1978), and so on. SLOC is dialect subordinate not at all like FP which is autonomous of programming dialect and other execution variables (Touesnard, 2004). SLOC discards clear and remark lines in its definition yet a few creators use non-critique source explanations (NCSS) to take out clear and remark lines. SLOC is a base up method where estimation begins from the essential unit (module, subroutine, capacity, strategy, and subprogram) of the framework a work in progress, then whole them up and do exploratory measures (Arifoglu, 1993, for example, cost-per-SLOC, number of SLOC every day per software engineer. Most programming estimation methods (COCOMO, PUTNAM, and so on) are SLOC-based. Programming engineers trust that aggregate task expense can be effortlessly gotten from the subsequent number of individual months; henceforth the estimation of exertion is the thing that most analysts discuss (Keil, Paulish, and Sangwan, 2006). With the approach of GUI-based dialects/apparatuses, for example, Visual Basic, a lot of advancement work is finished by drag-and-drops and a couple mouse clicks, where the software engineer for all intents and purposes composes no bit of code, more often than not. It is unrealistic to represent the code that is consequently created for this situation (Hoh, Baik, Kim, Yang, and Boehm, 2006). This distinction welcomes gigantic varieties in efficiency and different measurements regarding diverse dialects, making the Lines of Code increasingly unimportant with regards to GUI-based dialects/devices, which are noticeable in the present programming improvement field.

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FUNCTION POINTS:

Capacity Points is one technique that has been created by Albrecht and Gaffney (Albrecht and Gaffney, 1983) in 1979 from exact proof to counter SLOC. Numerous undertakings were analyzed as for their diverse qualities and the span of the last items was inspected, lastly a model delivered to fit the information. (Wu, 1997) characterizes capacity focuses as a strategy for measuring the size and intricacy of a product framework as far as capacities that the product conveys to the clients. Erik (Stensrud, 1998) grouped programming things into exchanges and information elements utilizing FP number. FP expect there is a connection between's the specialized framework improvement exertion and application advancement exertion since balanced FP includes a rate for specialized multifaceted nature as opposed to assessing this exertion independently from the measure of usefulness. It considers the direct mix of five fundamental programming parts and conforming for ecological preparing unpredictability, called specialized multifaceted nature alteration. These five programming parts are further weighted as basic, normal and complex (Kusumoto, Imagawa, Inoue, Morimoto, Matsusita, and Tsuda, 2002) which gives it the unadjusted capacity point (UFP).the specialized many-sided quality conformity is performed by ascertaining the specialized multifaceted nature components, (TCF). Capacity purpose of a framework can be ascertained utilizing this recipe: FP = UFP * (0.65 + 0.01 * TCF). From a client view point, Function Points can be utilized to indicate to a merchant, the key deliverables (Vaughan, 2011), to guarantee proper levels of usefulness will be conveyed, and to create target measures of cost-adequacy and quality (Stensrud, 1998). They are most successfully utilized with settled value contracts as a method for indicating precisely what will be conveyed. From a seller point of view, effective administration of settled value contracts depends completely on precise representations of exertion According to (Touesnard, 2004), FP depends on tallying capacities which may contrast from individual to individual contingent upon the individual's capacity. Numbering FP is manual and tedious. Associations can beat these issues by honing capacity focuses examination reliably over a timeframe.

OBJECT POINTS : Object Points (OP) additionally alluded to as application point in (Somerville, 2010) to abstain from misconception with articles in item arranged frameworks depends on numbers

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of windows, reports, 3GL modules and tenets. Investor et al (Banker, Kauffman, and Kumar, 1992) proposed OP size metric as a substitution for capacity focuses (FP) to fuse visual gadgets of the fourth era dialects (Stensrud, 1998) and the coordinated Computer-Aided Software Engineering apparatuses, and to conquer the lacks of the customary lines of code and capacity point measurements (Issa, Odeh, and Coward, 2007). Latest programming advancement dialects are article situated in nature, managing items and classes. At the point when a class has different associations with different classes, the intricacy of that class increments. Numerous scientists attempted to take care of this issue by mapping OP to FP, however proposing new and upgraded approach for formative size estimation in view of item model would be more well-suited. There is a deficiency of verifiable task information on which to base the experimental approval of the new protest focuses based programming cost estimation model. This altogether decreases the unwavering quality of their application in association. Capacity focuses estimation metric is generally acknowledged in programming industry as a veto standard for formative size estimation (Chamundeswari and Babu, 2004), thusly new models will require some serious energy to breakeven in the business.

USE CASE POINT:

(RoyClem, 2005)explains Use Case Points as a venture estimation strategy that utilizes an undertaking's utilization cases to create an exact assessment of a task's size and exertion. It gives the capacity to evaluate an application's size and exertion from its utilization cases. In view of work by Gustav Karner in 1993 when he utilized use case demonstrating to catch the business procedures and prerequisites of a product application by breaking down the utilization case on-screen characters, situations and different specialized and ecological figures and digests them a condition (Koirala, 2004). The condition is made out of four variables:

Technical Complexity Factor (TCF). Environment Complexity Factor (ECF). Unadjusted Use Case Points (UUCP). Productivity Factor (PF).

Every variable is characterized and processed independently, utilizing saw values and different constants. The complete condition is:

UCP = TCP * ECF * UUCP * PF (Ashman, 2004)

For the performing artist to be arranged, we have to know some specialized subtle elements like which convention the on-screen character will utilize. So estimation must be finished by specialized specialists. FP is not specialized ward.

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Types of Software Project Cost Estimation ModelsIn this segment, programming cost estimation procedures will be talked about and their standards depicted making a refinement between them.

EXPERT JUDGEMENT:

Expert judgment includes meeting with programming cost estimation specialists to utilize their experience of the proposed venture to gauge its cost (Ramesh and Karunanidhi, 2013). Liming (Wu, 1997) depicted master judgment as cost estimation community oriented gathering where unknown members utilized their experience and comprehension of the task to evaluate the expense. The specialists get their experience from past activities to the proposed venture. The gathering utilizes Delphi procedures amid their cooperation with a facilitator giving unknown outline of the specialists' assessments at any cycle (Heemstra, 1992; Ramesh and Karunanidhi, 2013; Somerville, 2010). It doesn't require information, elaborate numerical conditions (Briand, Emam, Surmann, Wieczorek, and Maxwell, 1999) or ability yet depends exclusively on judgment, hunch, and instinct (Arifoglu, 1993). The assessments are subjective and not objective rather subjective (Trivailo, Sippel, and Sekercioglu, 2012). Likewise, it is troublesome for somebody to replicate and utilize the learning and experience of a specialist. In the event that master judgment is connected wrongly, erroneous estimation may happen coming about to cost invade or underrun.

PRICING TO WIN(PtW):

The product venture expense is assessed to be whatever the client has accessible to spend on the task. Client's desires are met with respect to cost yet it is dangerous for the undertaking chief since task might be thought little of. The estimator's principle interest is to win the agreement without considering the amount it will cost to convey. This is the procedure utilized by new programming creating organizations who are intrigued to break into the business, accordingly, as their capacity and execution increment, cost estimation increments. (Pernia, 2012) supported for PtW when sufficient lead time to accumulate and survey data on contenders and clients are accessible. (Heemstra, 1992)hardly calls it programming cost estimation system, since business thought processes assume a vital part in this methodology.

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The contractual worker gets the agreement because of underestimation however the likelihood of the framework meeting every one of the necessities is insignificant.

PARKINSON’S LAW:

Parkinson's Law expresses that work extends to fill the time accessible (Somerville, 2010). The expense is controlled by accessible assets instead of by target evaluation. In the event that the product must be conveyed in 12 months and 5 individuals are accessible, the endeavors required are assessed to be 60 man months. In circumstance of overestimation, the arranged exertion will be utilized totally. In The (Economist, 2014), the author guaranteed that this law is based upon an investigation of the variables by which that development is controlled. This development is controlled in programming ventures by accessible assets (labor, cash, and time) and what develops are the conveyed source directions, capacity focuses, or question focuses relying upon the programming dialect utilized and the case apparatuses utilized. Luckily, there is no cost overwhelm here however the framework is generally unfinished which is bad for the task.

ESTIMATION BY ANALOGY(EbA):

This procedure depends on extrapolation taking into account correlation of past ventures which are undifferentiated from or comparable in nature with the new venture (Trivailo, Sippel, and Sekercioglu, 2012). The undertaking whose expense is to be evaluated is described by an arrangement of qualities which is put away in the database on the past activities. (Mittas and Angelis, 2008). Master examiners are required to hunt down these properties of the past activities that compare to this task, for example, size, group experience, innovation being used, application area, or what Barry Boehm called Cost drivers in COCOMO II (Constructive Cost Model II) (Somerville, 2010) to illuminate their supposition (Wu, 1997). Mittas and Angelis (Mittas and Angelis, 2008)expressed EbA as a non-parametric model, however it is an observational system. Trivailo et al (Trivailo, Sippel, and Sekercioglu, 2012) considered this strategy for estimation to be subjective however they additionally discovered its confinement of distinguishing a reasonable simple or satisfactory specialized information (Briand, Emam, Surmann, Wieczorek, and Maxwell, 1999). Utilization of this model is just conceivable where records of comparable finished undertaking are accessible, however incomprehensible if no similar venture has been handled (Somerville, 2010). The likenesses between the past activities and the proposed venture are recognized and impacts assessed. The issues in this strategy are the means by which best to portray a venture, what number of tasks to be utilized when looking at, and database stockpiling. The estimation might be wrong prompting cost overwhelm or underrun if unpracticed experts are utilized (Ramesh and Karunanidhi, 2013).

ALGORITHMIC COST MODEL:

Algorithmic cost model as indicated by analysts (Somerville, 2010; Ramesh and Karunanidhi, 2013) is produced utilizing chronicled cost data that relates some product metric (more often than not its size) to the task cost. Venture Costs in view of verifiable

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information, for example, source lines of code (SLOC), usefulness of the framework, and other cost drivers e.g. plan approach are broke down utilizing scientific conditions connecting expense or contributions with measurements to deliver an expected yield. As the extent of the product expands, additional expenses are acquired because of correspondence overhead of huge group, more intricate setup administration, Difficult framework joining, and so on; consequently, the bigger the framework, the bigger the estimation of this type (Heemstra, 1992). It can create repeatable appraisals, change input information, refine and tweak equations, and bolster affectability examination (Wu, 1997). Every algorithmic model experience the ill effects of the same crucial challenges (Somerville, 2010) that it is regularly hard to gauge size at an early stage in a venture when details are accessible; capacity focuses and protest focuses are less demanding to deliver than evaluations of SLOC. Algorithmic models veer off from the established perspective of cost estimation prepare yet just give a metric to gauge the measure of the completed framework (Kemerer, 1987). Poor measuring inputs and off base cost driver rating will bring about cost overwhelm or underrun (Wu, 1997).

MACRO ESTIMATION METHOD :

Otherwise called top-down estimation, a general estimation of the product venture expense is part into pieces and allocated to every part of the low-level segments of the task (Heemstra, 1992; Wu, 1997; Ramesh and Karunanidhi, 2013). Sommerville (Somerville, 2010) saw the full scale estimation procedure as beginning at the framework level to evaluate the general usefulness of the item and how this usefulness is given by cooperating sub-capacities. It considers costs framework level exercises, for example, reconciliation, design administration and documentation, which other estimation techniques may disregard. This strategy can belittle the expense of taking care of troublesome low-level specialized issues connected with particular segments, for example, interface to nonstandard equipment. It requires negligible task detail yet gives no itemized premise to advocating choices or evaluations.

BOTTOM-UP ESTIMATION:

This strategy requires the undertaking group to disintegrate the work into little segments (Wu, 1997; Ramesh and Karunanidhi, 2013). As per (Heemstra, 1992), the expense of individual programming segment is assessed by the individual who will build up that segment. Singular appraisals are then summed up to get the general venture cost. The littler the task exercises, the less demanding it is to assess. This evaluation is normally more precise in light of the fact that the work is little and better caught on. On the other hand, it is tedious and might be difficult to disintegrate exercises that are difficult to characterize (Product and Process Innovation Inc, 2009). (Kemerer, 1987) appraised the exactness of utilizing this technique at ±20%, demonstrating that utilizing this strategy, the undertaking may invade or underrun by 20%.

PARAMETRIC ESTIMATION TECHNIQUE:

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An assessing system that uses a measurable relationship between authentic information and different variables (e.g., lines of code in programming improvement) to figure an evaluation for movement parameters, for example, scope, cost, spending plan, and span (Briand, Emam, Surmann, Wieczorek, and Maxwell, 1999). This system can deliver larger amounts of precision relying on the advancement and the fundamental information incorporated with the model (Heemstra, 1992). This technique depends on the way that the amount of work to be performed is specifically corresponding to some fundamental measure of the deliverable. Parametric displaying requires chronicled information taking into account comparable (Mittas and Angelis, 2008) ventures and sensible estimations of the amounts or components of work to be performed (AACE, 2008). It is appropriate for applied or framework plan stage gauges, when a portion of the last degree and the undertaking approach have been characterized. Its precision is amongst +75% and - 25% (Kemerer, 1987). The parametric assessment utilizes evaluating principles to surmised the imaginable last gauge of either the whole venture or a few noteworthy segments of a bigger task; henceforth the multifaceted nature of building up the model requires measurable aptitudes and authentic information with a scope of dangers and results (AACE, 2008; Trivailo, Sippel, and Sekercioglu, 2012). The parametric evaluating technique is generously more precise when utilizing a database of numerous finished undertakings.

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DISCUSSION AND CONCLUSION:Each of the established programming cost estimation procedures has points of interest and impediments. The best approach is to consolidate two or more systems to gauge venture cost, we suggest cross breed estimation method. The absence of exact and solid estimation systems joined with budgetary, specialized, authoritative, and social dangers of programming undertakings, require a continuous estimation amid the advancement of an application and the utilization of more than one estimation method. This model can be completed in three phases. To begin with, the assessment of the measure of the item to be created is acquired utilizing object focuses in light of the fact that most programming dialects of today are article situated in nature. The second stage changes over this size appraisals to cost gauge utilizing no less than two of the current systems and the most precise evaluation will be picked at every stage. This should be demonstrated in consequent examination. The precise estimation of programming advancement expenses is a basic issue to settle on great administration choices and precisely decide how much exertion and time a venture requires both for undertaking directors, framework expert and engineers. There are numerous product cost estimation strategies accessible however none is essentially preferred or more terrible over others, therefore their qualities and shortcomings supplement each other. In this paper we considered the qualities and shortcomings related to various sorts of cost estimation systems. Our outcome presumed that utilizing more than one estimation system will give precise assessment to maintain a strategic distance from cost overwhelm or underrun. Taken a toll estimator ought to consolidate strategies in light of the qualities and shortcomings of the strategy and its fittingness to the undertaking. In the event that a task is obscure, i.e. totally new, it is prudent to utilize algorithmic technique or capacity point-based strategy with master judgment particularly in the early period of the product lifecycle in light of its awesome vulnerability estimations of size. On the off chance that the dialect is of the item situated family, question point based strategies will be more proper. We at long last prescribe cost estimators to utilize distinctive expense assessing systems, look at the outcomes and decide the explanations behind any extensive varieties. It is likewise prudent to report all suppositions made amid cost estimation and keep up authentic database.

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REFERENCES:

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2. Gill, N. S. Reusability Issues in Component-Based Development, ACM SIGSOFT Software Engineering Notes, 28(4): 4 – 4 (2003).

3. Nasir, M. A Survey of Software Estimation Techniques and Project Planning Practices, Proceedings of the Seventh ACIS Int. Conf. on Software Engineering, Artificial Intelligence, Networking, and Parallel/Distributed Computing (SNPD’06), (2006).

4. Putnam, L 'Software costing estimating and life cycle control' IEEE Computer Society Press (1980)

5. Jairus Hihn,Karen Lum “2CEE, A TWENTY FIRST CENTURY EFFORT ESTIMATION METHODOLOGY” Lane Dept. CSEE WestVirginia University ISPA / SCEA 2009 Joint International Conference.

6. Karen T. Lum, Daniel R. Baker, and Jairus M. Hihn “The Effects of Data Mining Techniques on Software Cost Estimation” 2009 IEEE.

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