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Effort estimation in software services industry and its unjustifiable percentage slabs

When a customer wants to get a software application developed (web app or mobile app) they will approach a software service provider (vendor) and asks them to give an estimation for the same. The vendor will get back with an estimation which in many cases will include the entire software development life cycle. ( Effort estimation in software services )

So the estimation you receive will normally include estimation for each stages such as BA, Technical Architecture, Designing, Coding & Unit testing, System testing, UAT, Implementation & deployment, Documentation & user training, Project management, Technical support & finally the total effort estimation (which is a sum of all the above). Did you ever checked how did your vendor came up with numbers for each of these stages?


Let’s explain how does the magic number comes for all sdlc stages. The most popular effort estimation method is where the vendor will identify the development effort required for your project (also called as cut effort) and applies it to their standard sdlc (software development life cycle) calculator and this calculator will through back the number for all remaining stages.

How does it happen? The calculator will have all sdlc stages listed in it. All stages of sdlc will have some percentages allocated to it and the sum of all stages will be 100% or the complete sdlc. So in the above case when your vendor applies the cut effort to his effort calculator the effort estimation number for all other stages will be automatically populated based on the percentages tied to each stages. The grand total of all the effort for each stages will be the estimation given to you.

So very clearly your vendor has only identified the development effort (cut effort) for your project and this is the only number he can justify because all the other numbers arrived just with the magic of this calculator. Such estimation may not be appropriate for your project because your vendor will not be able to justify the numbers for each stages because he didn’t create this, it only came out of calculator magic.

You should also note that this sdlc estimation calculator and the percentages tied to each stage may not be scientifically right. It is not created by any government agency. Just that many software services companies are using similar model & that has become an industry standard. But again this sdlc calculator & its percentage slabs may not be right for your project.


As a customer it’s very important that you ask your vendor to justify how & why did he arrive at each numbers. As long as your vendor can justify the numbers he prepared the effort estimation you received might just be right.

For example let’s assume that you are giving a complete requirement document and the designs which means your vendor shouldn’t charge you for BA & Design phases.

In other example the actual design work on your project might only take let’s say 20 hours but your vendor would have charged you 100 hrs for designing (because he didn’t calculate the actual hours needed for this instead this number came from the percentage slab in calculator).

Also cross check what does your vendor do in each stage & what will he deliver in each stage. Don’t pay for your vendor’s calculator magic just pay for the actual hours needed for your project.

Did you like this topic or do you have a different opinion to share? Please leave a comment below or write to us at contact@therealpictures.com

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