One of the most essential parts of the software development and project management process is the cost estimation of all the activities involved. Software cost estimation mainly involves gathering requirements, quality assessment, and estimated cost of quality assurance and the overall estimation of project costs. Multiple levels of uncertainties in the initial phases of software development projects tend to influence the cost estimation process which moves towards greater accuracy with the progress in the projects. The literature review will provide the article review of 5 authentic articles relevant to the research topic.This assessment will give description of few factors, which can affet the cost estimation of software. Project management quality has been revealed in numerous parts of literature indicating that the aspects related with quality such as data size, reliability and life cycle necessities in software projects. In addition, this are the basic determinants of delivery of quality. Project management process is also required to be optimised within limited time plus budget for winning project deliveries. Complexities based on the product are identified factors also and this cna affect the cost estimation process according to most previous studies.
Table 1: Keywords and Terminologies
The present research aims at identifying the factors which are influencing the cost estimation process in software development projects in Australia. The present research will also try to identify certain problems in software projects in Australia which are caused due to the influence of the external and internal factors. Certain features during the cost estimation processes are essential in software projects such as accuracy and flexibility. The influence of the factors influencing the process estimating cost on these particular necessities is also to be tested in this research.
Different issues faced in management of software projects have gained significant importance in the contemporary research studies. According to Huang et al. (2015), cost estimation and cost management can be considered as the primary factors for achieving software project success. Therefore, it has been essential to analyse the factors affecting cost estimation of software projects so that effective project success can be achieved along with higher competitive advantage in the industry.
The precision in the planning of a software project and accurate estimations are the keys to successful software project delivery. Different types of cost estimation methods provide variable accuracy levels and therefore these alternative methods have been criticised frequently in literature. The studies of Rose et al. (2016) have outlined some of the few factors which directly influence the cost estimation process in software projects. The three main factors mentioned by the authors include project management quality, product complexity and the requirement for conformance. On the contrary, the studies of Gharehchopogh et al. (2015) have highlighted certain factors which affect the software project cost estimation such as platform reliability, the capability of the analysts and other personnel and tools used during the estimation processes.
Project management quality has been mentioned in multiple parts of literature indicating that the aspects associated with quality such as data size, reliability and life cycle requirements in software projects are the basic determinants of delivery of quality (Idri et al. 2015). Project management process is also required to be optimised within limited time and budget for successful project deliveries. In this regard, Gharehchopogh et al. (2015) have identified that irregularities in time schedule can completely alter the cost estimation and overrun in time schedules directly lead to cost overruns as well. Contrarily, Rose et al. (2016) have mentioned that changes during project progress are to be effectively controlled to minimise cost estimation errors.
The lack of conformity of the project planning and cost estimation process with the resources required and functionalities to be derived from software projects are also essential factors affecting the cost estimation process. Soni and Kohli (2017) mentioned in this context that inconsistent requirements-specification can interfere with software development costs negatively.
Product based complexities are also identified factors affecting the cost estimation process according to most previous studies. Maleki et al. (2016) have pointed out that the main constraints such as execution time constraints and storage constraints as well as issues such as platform volatility in software projects are mainly caused by product complexity factors. Contrarily, the works of Rose et al. (2016) have shown the relation of the cost estimation process more clearly. The authors have specified that the more complex the development process of software is the less are the chances of maintaining proper schedule and costs of resources in a project. However, Iqbal et al. (2017) mentioned that with the development of digital estimation tools, accurate estimation is possible in the present world.
Estimation of cost can be done through various methods which included an iterative process of estimating that are used to develop approximate monetary resources which can be used for completing the activities in the projects. Some of the issues which have been identified by previous authors included the uncertainty problems in software development projects. Some of the issues identified by previous researchers about cost estimation in software projects include:
Depending on the series of complex services which are required in a software project, the challenges developed in the process of cost estimations mainly involved maintenance of realistic estimation (Iqbal et al. 2017). In Australia, most of the IT development projects involve cost estimation processes which are based on comprehensive reviews of the previous paper in other software projects.Similarly, the studies of El Bajta et al. (2015) also point out that reluctance to replace existing systems in most companies in Australia and other developing countries turn out to be an uphill battle for developers and this causes overrun in schedules in most cases further leading to cost overruns.
Leading software development projects start at the initial stages with no certainty in requirements specified by clients. Therefore the timescale and resources required in the project are uncertain at the primary levels which also cause the cost estimation process to be uncertain (El Bajta et al. 2015). Businesses often require multiple-level-users and the requirements are identified by the clients in the later phases. Additionally, Dhaka et al. (2016) also mentioned that challenges such as lack of resource-based feasibility can also be encountered due to such changing requirements and therefore cost estimation process can be negatively affected in such varying cases.
Development of standalone software is a challenge itself in the projects concerned with software development. In Australia, rising number of small and medium-sized enterprises have considerably increased the software project requirements and most of the projects often involve third party integration for providing more control over business activities (Garvey et al. 2016). Asghar et al. (2016) alternatively mentioned that in case of software development projects in developing countries such as Australia, the costs are mostly shaped by action in projects whereas, it is essential for project actions to be shaped by previously determined costs. There have been many aspects identified by previous authors that can help in minimising such control related issues in software projects. Investment in qualified actors throughout the project can increase efficiency in processes which also leads to the least-cost estimation variance. On the other hand, according to Garvey et al. (2016), cost estimation process can be related to providing greater control to the allocation of resources; however, it does not often succeed as a control measure successfully.
Recently developed agile methods often have witnessed estimators of costs in software projects to be more centred in finding funding as compared to being focused into forecasting accuracy in Australia (Nassif et al. 2016). On the contrary, the studies of Puri and Kaur (2015) have also shown that investors make early commitments to design solutions and costs in Australia and most developing countries. These problems are existent in spite of the fact that investments in software projects in Australia and New Zealand are expected to increase by more than 50% (Minterellisonreports, 2018).
Figure 1: Expected change in software projects investments in Australia and New Zealand
(Source: Minterellisonreports, 2018)
Such preferences tend to minimise the potential for cost reduction and identification of market opportunities effectively. Additionally, lack of opportunistic approach in software projects can also lead to costly changes which are realised and included during the progress of the project. As pointed out by Nassif et al. (2016), problems in identifying opportunities and lack in the flexibility of plans can generate greater wastes and increase in resource consumption.
In most software development projects in Australia as well as other developing countries, generalised tools of cost estimation such a budgeting (Ato.gov.au, 2016). In software projects, the activities are much different from projects in other industries. The development process, quality testing as well as bug fixes requires a series of complicated iterations which cannot be monitored and controlled through generic tools (Soni and Kohli, 2017). Therefore cost estimation tools in these projects are required to be as per the project requirements and it must include all the costs incurred in each of the activities and their alternatives. Contrarily, the studies of Saif (2016) have identified tools such as Fuzzy logic is optimised to support realistic data forecasting in software projects.
Cost estimation in software development projects are an inevitable part of the overall project conduction and therefore different types of methods are prevalent in the markets. The major divisions in the methodologies used for cost estimation in software projects included algorithmic methods, non-algorithmic methods and machine learning methods (Sarro et al. 2016). Most of the studies have primarily mentioned algorithmic methods such as COCOMO model as well as machine learning models in cost estimation which are most commonly used in case of software projects.
The Constructive Cost Model (COCOMO) is the most widely used costs estimation model for software projects in all industries. The model is used for calculating the estimated costs of labour hired each month for the development of the required software. As mentioned by Iqbal et al. (2017), the COCOMO model can also project estimate costs and development schedules for software projects. Additionally, the studies of Papatheocharous et al. (2017) has also pointed out that the COCOMO model, being a regression-based model fundamentally dependent on the number of Lines of Code (LOC), can map out the estimated effort or labour and schedule as variables in a software project.
Figure 2: COCOMO Model (Source: Iqbal et al. 2017)
The COCOMO model can be expressed with the help of the following equation.
E= a (K*LOC) b
In the present model, the effort is calculated as equal to the number of persons required for the job and is measured in person-months (Iqbal et al. 2017). However, the studies of Salam et al. (2016) have also highlighted the fact that the variables in this model are highly dependent on environmental factors and therefore the estimation in this process is quite rough. Iqbal et al. (2017) also mentioned that complexity factors such as reliability, the efficiency of workers and teams are also key drivers affecting the outcomes of the COCOMO estimation.
The most advanced and recently developed method developed based on the multi-valued set theory is the Fuzzy Logic model proposed by Lofti Zadeh (Iqbal et al. 2017). This model tends to introduced human behaviour-like interpretation processes into the cost estimation process in software projects. The approach particularly consists of four stages, namely:
• Production of trapezoidal numbers for expression of linguistic terms (Iqbal et al. 2017)
• Production of complexity matrix
• Determination of productivity rates
• Determination of the resources and efforts required as well as associated costs
Figure 3: Fuzzy Logic COCOMO II model (Source: Iqbal et al. 2017)
Recently, the studies of Tao et al. (2018) have highlighted that conjugation of the two models such as COCOMO and Fuzzy logic named ‘FL-COCOMO II' can generate an optimal methodology producing many accurate results in the cost estimation process of software projects. Similar implications can also be derived from the studies of Soni and Kohli (2017) since the authors mentioned this mixed approach being used in current software projects in Australia and other developing countries as well as pre-programmed tools such as FIS tools in MATLAB. Alternative models for cost estimation in software projects have also been identified by Iqbal et al. (2017) such as neural network methods, top-down methods and Putnam model-based methods.
Technology development projects are mainly concerned with the development and delivery of hardware and software systems. The cost modelling tools used for software and hardware projects are much differentiated. Saif (2016) had identified in their research that most common tools used in software cost modelling processes include the COCOMO and REVIC tools. On the contrary, Tao et al. (2018) mentioned some commercial cloud-based estimation tools that are also commonly used in modern times such as Squaretakeoff and MATLAB. Under the COCOMO estimation process, the function point analysis is based on the counting of the feature points in software and the language conversion process lead to the identification of the sources of Lines of Code (LOC). Maleki et al. (2016) have mentioned that COCOMO and REVIC as tools of software cost estimations are suitable for estimating the costs of digital systems that are embedded. Hardware-based projects cost estimation tools, on the other hand, include Rent's Rule implementation and use of Donath's formulation. On the contrary, Bilgaiyan et al. (2017) also identified the tools used under the Putnam model more clearly mentioning project planning tool called SLIM-estimate, Project tracking tool called SLIM-control and software metrics analysis tool called SLIM-metrics. The PRICEs and ESTIMACS tools have also been mentioned but authors as frequently used tools of cost estimation.
The software industry needs to be prioritized on their improvement as this has been seen that technology is developing every day and the application of complex software is becoming very cheap as well. In this regard, it has been found that maintaining better quality of software is now one of the major challenges for any software company. As per the opinion of Shekhar and Kumar (2016), cost estimation can be considered as the toughest work in the software industry (Shekhar and Kumar, 2016). The prime reason behind this toughness is a software engineer has to estimate the total cost, which is required for developing software. Different techniques of cost estimation have been revealed in this article by the researcher. Various approaches have been highlighted in this article also in terms of different models and methods, which are utilized to estimate cost of software.
After overview the article, it has been found that estimate the correct cost for developing software is one of the most tedious tasks. In addition, cost estimation is highly disadvantageous for budgeting plus planning the software project. However, without it software estimation is not possible for any software engineer. System analyst are mainly utilized the process of software cost estimation. On the other hand, this has been said that according to cost estimation for software plays a useful role in the success of software project management.
In the context of global software development (GSD), this can be said that in order gain success in software project management, every software company have to prioritize on their software cots estimation. According to El Bajta et al. (2015), cost estimation is one of the advantageous aspects for software sector but this has been found that few problems are raised in this context in terms of consumers’ satisfaction plus end users. This paper has developed a systematic mapping study (SMS) and the prime aim for this is to summarise the cost estimation of the software with the help of answering nine mapping question in context of GSD. In order to develop this study a total of 16 article had been chosen and divided those into nine criteria.Therefore, this can be said that good effort estimation is significant for the success of ant GSD project. The outcome of this mapping study reveals the necessity of more research on the methods, which can be useful for the analysis of software cost estimation. According to Yeh and Chen (2018), cost estimation is one of the beneficial aspects for software sector but it has been found that few issues are raised in this context in terms of consumers’ satisfaction plus end users. As per the opinion of Shekhar and Kumar (2016), cost estimation can be considered as the toughest work in the software industry.
In past few years, this has been seen that the size plus functionality of software have experienced a huge development. Based on the opinion of Bilgaiyan et al. (2017), cost estimation is very much necessary for the entire cycle of the software development. Therefore, this can be considered as very significant and it has to be done before the beginning of the development cycle. This assists to develop the correct estimation for any project and this is advantageous for obtaining the delivery date plus appropriate changes. The article has shown that Agile Software Development (ASD) methodologies are useful for any project to get high rates of success. The prime reason behind it is its capability of coping with changing needs of the consumers.
This article has been carried out by taking the assistance of secondary data collection method. In this regard, this can be said that secondary method is one of the helpful methods for congregation of authentic data. This is advantageous as well because it helps researcher to select several journals and articles relevant to the research topic for collecting information from it. For this article, researchers have been provided lots of data and information about software cost estimation in this article. In addition, this has been said that the methodology for this article is Search string based data gathering.
The main target of software cost and effort assessment is to provide a scientific inference on the necessary assignment and its equivalent costs in the life sequence of software system. Ch and Singh (2018) have discussed that software cost analysis is a very critical activity that needs constant care, knowledge and few numbers of key characteristics. In this article, more than a few methods for software project effort and cost opinion are embellished along with a discussion about their aspects. Main reason for putting a lot of efforts and time in this is cost of software is a part of efficient program administration. A systematic literature has been carried out based on the gathered information. All the information is collectively taken here from various secondary, genuine and most importantly reliable sources. It is scrutinized thoroughly and checked efficiently.
They will not show the desired out comes. In the opinion of, Ch, S.S. and Singh, S.P. (2018) also say that using the median of absolute error, which is more often than not less sensitive to tremendous standards than the mean value. On the other, hand Sarro, F., et al, (2016) states that, the testing of whether their multi objective nature contradict each other, did not show much alike values. Use of different datasets does not shift the main value from its point that much and it can be almost same. Using of statistical inference method smoothes out the high or extreme values by not considering them or taking an average by using mean value. In addition, in the opinion of Sarro, F., et al, (2016), the multi objective nature of the program can actually outrun the single dataset oriented program, in the case of efficiency.
Al-Qudah et al. (2015) have stated that cost estimation of software projects is crucial and it requires some proper technique and methods to come to a verdict. Purpose of this study is to determine the efficiency of the existing methods and how they interact with the context to give a suitable outcome. However, the focus will be on the findings and possible gaps in the study. Before this a lot of observation was conducted over the whole system, this shows the growing demands of higher superiority of software from beginning to end effectual cost assessment.
The result of this survey points out that in order to have a correct and precise judgment process many software metrics require to be analyzed and implicated in judgment model or in a combinatory framework. The benchmarking of database will be implicated on this, because that is to free the outcome from the effect of irrational values. Study to understand state of the art and to put on a clear picture it can be found that lot of the framework in existing methods are mainly dominating and used over and over. So a redundancy can be observed. They are non-algorithmic and algorithmic models. The main reason for choosing them is they use linear and non-linear or sometime quadratic approach in repeating way. They are more reliable than other approaches.
Figure 4: Flow chart
This designed sytem is the flowchart of the basic cost estimation of the progces desin. In this flow chart the steps which are mentined in the boxes are as follows.
Request for cost estimation :- this one is the initial step of the flow chart where the whole process will begin. Here it will start the process of estimation.
Agree effort and timing :- This step in the box represnents the process of the estimating the time and other inputs.
Deleivery of estimating package:- This step includes the extraction of the estimating pacjages and the functions from the system.
Package complete:- Here this step includes the comleteing of all the extraction of packagaes from the sytem .
Scope chain and additinonal information:- This step has the option for the users to change the scop and the pakgaes an other data provided as an input for the last time.
Prepare estimate:- This is the end process of the system , where the users will get the prepared estimation.
The study of previous literature shows that the majority of the studies in history are focused on the different processes of estimating the cost of conducting various software development projects. The studies have also provided alternative opinions about the utility of the different methods for estimating cost of software projects. However, it is evident that there is a lack of exploration of the factors affecting the cost estimation process during adopting these tools. There are a limited amount of studies identifying the factors influencing the processes of estimating costs of the software projects whereas among one of them discuss the issues faced during implementing the tools for cost estimation. The present study aims at fulfilling this research gap by identifying the factors that can affect the process of estimating cost of software projects and the issues faced due to these factors.
The research will be aimed at identifying the factors that can influence the processes of estimating cost of software projects within Australia and to understand the issues in cost estimation of such software projects.
The key research objectives in this research will include:-
• To identify the key factors that can influence the processes of estimating cost of software projects in Australia
• To understand the impacts of the factors that can influence the processes of estimating cost of software projects in Australia
• To outline the challenges faced in the cost estimation of software projects in Australia
• To recommend solutions for minimising the issues in cost estimation of a software project in Australia
Cost estimation is a much-complicated process of software project management which is especially prevalent in countries such as Australia. Most of the previous studies have specified the rising investment in technology in the developing countries to be the key drivers resulting in the requirement of project cost estimation in software projects. Using traditional specialised tools for cost-estimation produce rough results. In developing countries such as Australia, many additional problems such as the use of generic tools for cost estimation; unpredictable behaviour of the clients negatively affects accuracy of the cost estimation of software projects.
In this study, the problems faced in cost estimation of software projects in Australia are to be explored for identifying the strategies for overcoming such challenges in the future. In this regard, the factors affecting the cost estimation of software projects will also be identified in order to resolve the research problem.
The past research studies have identified the cost estimation process of software projects to be highly complicated. Various software companies in Australia such as ATMOS Software, NCH Software and many others have also faced significant difficulties in estimating cost of different software projects. Therefore, the present study will aim at identifying the factors that can influence the processes of estimating cost in case of software projects so that the associated issues and risks can be effectively mitigated. In this regard, the positivism research philosophy will be used so that the determining factors of cost estimation of software projects are identified on the basis of practical observations (Kumar, 2019). In addition, the deductive research approach will be used so that the existing theories on software cost estimation can be validated with the help of collected empirical data (Mackey and Gass, 2015). Finally, the exploratory research design will be utilised in order to critically gather data and information on the issues of estimating the costs of conducting software projects.
Collection of data is highly essential in order to conduct a particular empirical study. In this case, data can be collected through either primary or secondary methods. In this regard, raw data can be collected through primary method whereas secondary data can be collected through already existing data sources (Taylor et al. 2015). In addition, mixed method can also be used in collecting data in which both primary and secondary data is collected for a research. In the present study, primary sources of data will be used in order to collect first-hand data on the determining factors of estimating cost of software projects. In case of primary data, either qualitative or the quantitative approach can be utilised. According to Silverman (2016), qualitative approach includes collection of descriptive data whereas quantitative approach includes collection of specific numerical data. In the present study, both qualitative and quantitative approach of primary data collection will be used so that the research outcomes regarding the factors influencing estimation of cost of software projects can be comprehensively achieved.
Figure 5: Research Methods (Source: Influenced by Taylor et al. 2015)
The primary quantitative data will be collected from some of the employees of different software companies by conducting an effective survey. In this case, an online questionnaire including various close-ended questions will be sent to the employees via official e-mails. The sample of this quantitative survey will include 53 employees of different software companies in Australia. These employees will be selected through simple random sampling techniques so that errors and sampling bias can be minimised (Flick, 2015). On the other hand, an interview session will be conducted with the software project managers of different software companies in Australia in order to collect primary qualitative data. In this case, the interview sessions with the project managers will be conducted either through face-to-face meetings or online video conferences based on availability and convenience of the managers. Moreover, the managers will be asked different open-ended questions regarding the various factors that can influence the process of cost estimation of the software projects so that comprehensive and elaborated data can be gathered (Quinlan et al. 2019). The sample of qualitative interview will include 5 project managers of different Australian software companies. These managers will be selected with the help of convenience sampling technique.
The dependent variable in this research is the “cost estimation of software projects”. On the other hand, the independent variables in this study will include the identified factors that can affect the cost estimation process of software projects such as “project management quality”, “conformity requirements”, “complexity of software product” and so on. Independent variables Dependent variable Project management quality Cost estimation of software projects Conformity requirements Complexity of software product.
Table 2: Variable recognition of the study
The collected quantitative data in this study will be analysed with the help of variable analytical software such as SPSS and MS-Excel. In this regard, the statistical tools of descriptive statistic, correlation, regression, F-statistic and ANOVA will be used in order to arrive at the desired research outcomes. Various graphs and charts will also be presented with the help of MS-Excel software in order to enhance visual representation of the collected data. On the other hand, the qualitative data will be analysed in a descriptive manner.
Identifying the difficulties in cost estimation strategies of software projects is essential for ensuring quality and prevents cost overruns in projects. Software requirement gathering, development, maintenance and costs of poor quality are all included in the cost estimation process. Identification of the software cost estimation issues can help in mitigating the challenges through altering the controllable factors. Better control can also be provided during the process of cost estimation through the implementation of modernised tools. In Australia, the prevalent tools used in cost estimation process of software projects include generics tools such as budgeting and basic resource management practices (Ato.gov.au, 2016). The research will also allow a better understanding of the current software development projects issues in Australia and the common practices adopted during the project cost estimation. The paper will also identify certain differences in the cost estimation approaches used in other countries as compared to Australia and will hence identify the key issues specifically faced in Australian software projects.
The present paper shows the different factors which are effective in the cost estimation process in software projects in Australia. The investments in software projects in Australia and New Zealand are expected to increase considerably in future. The research proposed will aim at identifying the main factors which influence the cost estimation process of the software projects in Australia and will also identify the issues in software cost estimation processes. The research objectives have been outlined in this paper and a research gap has been identified which is aimed to be fulfilled through this research. This paper also summarizes some of the key factors presented by previous authors related to the cost estimation procedures and problems faced in software projects. The research will particularly aim at addressing the problems faced during the cost estimation of the software projects within Australia. From the assessment, it cna be said that the most updated and recently developed method based on the multi-valued set theory is the Fuzzy Logic model. In this regard, it has been found that this model tends to meke the introduction of human behaviour-like interpretation processes into the cost estimation process in software projects.COCOMO and REVIC can be considered as tools of the software cost estimations, which are suitable for estimating the costs of digital systems that are entrenched. On the other hand, projects cost estimation tools based on hard ware, encompass Rent's Rule implementation and use of Donath's formulation.
Table 3: Expected time table of the research
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