# Revolutionary Method Of Cost Estimating

**Disclaimer**: This web page contains just an abstract of a research
report that was presented on PROFES 2009 conference
in Oulu, Finland, on 16th of June, 2009. Materials of the conference are
published by Springer Verlag. The method is pending USPTO patent:
12/193,010.

Any project needs estimates (cost, time and resource) as key artifacts, which are based on scope definition. There are many well-established and proven methods of software size and cost estimating, which are based on software specifications and organizational assets, e.g. historical data. In a general case, any method includes (i) requirements analysis, (ii) numbers deriving and (iii) final calculation.

These three steps could be repeated several times iteratively, e.g. like in Wideband Delphi. Each step may be completed manually or with a special tool and/or algorithm, e.g. function point analysis, COCOMO, PERT, XP user stories, SLOC prediction, by analogies, with use case points, class points, neural networks, and others.

No matter what tools and algorithms are used, the whole process has two significant disadvantages, which very often make it difficult to achieve optimal results or even to finish the estimating in time.

First, even a mid-size software project may contain hundreds of functional and non-functional requirements. The time required by estimators for proper understanding and analysis of requirements almost always is much bigger than the budgeted time for the whole estimating process. The obvious outcome of this situation is a limited understanding of requirements by estimators, which leads to inaccuracy in the estimators' judgement.

Second, estimators tend to approximate the numbers. With a big amount of small estimates, this leads to a certain deviation in the final calculation (either to the higher or to the lower boundary of the approximation). The deviation grows much faster than the amount of the estimates does.

A good solution to the outlined problems is our innovative method that decreases the amount of efforts required for deriving numbers, at the same time improving the accuracy of the estimate.

## The Method of Scope Champions

In properly managed software projects, product scope is defined by software requirements specification (SRS), that includes functional and non-functional requirements to the product. A numbered list of requirements defines the boundary of the product scope, while non-functional requirements supplement them with quality attributes.

The method consists of three steps:
1) select **Scope Champions**,
2) estimate Scope Champions, and
3) calculate the product scope estimate.

Scope Champion is a selected functional requirement, the biggest and the most complex element of scope, according to the estimators' expert judgement. Scope Champions are picked up from a complete set of requirements on the same level of abstraction.

When Scope Champions are selected, isolated estimates for them are made by estimators. Using the estimates and the formula, proposed as part of this method, the final product scope estimate is calculated. The formula is:

Where **Y** are estimates of Scope Champions, **m** is
a total amount of Scope Champions, and **n** is the total amount of functional requirements
in SRS. **Y** is a final product scope estimate.

Accuracy of the final estimate is improved because:

- the estimators judgement is based on more detailed analysis, and
- the final estimate is much easier to validate and review.

The method can be used with other scope-defining artifacts, i.e. use case models, software architecture, design model, test plan, and others. The results obtained should be applied together, which will give higher accuracy for the total.