The complete guide on software development time estimation

19 min read
February 17, 2023

Ever heard of a ‘black swan’ project?

It describes a software project that overshoots projections so much that it stretches the development time by 70%.

The surprising bit? One in six IT projects ends up becoming Black Swans, according to a Forbes article.

The truth is that giving an accurate project timeline is a very hard task. There’s just so much variability and uncertainty that it’s becoming a near-impossible feat.

Fortunately, there are ways around this. This article will discuss software development timelines and the tactics you can use to estimate them better.

What is a software development time estimate?

A software development time estimate is a forecast of the time you’ll need to complete a software project.

The estimate is based on a number of factors, like:

  • The scope and complexity of the project
  • Your team’s skills and expertise
  • The resources you have at your disposal

It’s a crucial step for project planning, budgeting, and resource allocation.

Signs your company needs a custom software solution

Need an estimate for your project? Let’s talk

You’ll be talking with our technology experts.

An accurate time estimation will help you set realistic expectations for your projects and improve project outcomes.

So, getting it right is an absolute must.

The software development timeline

Before estimating development time, we must first know its components and how much time to spend on each. Here’s a brief rundown:

Product discovery (3-8 weeks)

Any software project starts with product discovery

The goal of product discovery is to validate your app idea and explore ways to implement it effectively.

Product discovery phases

During product discovery, you discuss the product’s scope in detail. 

This includes your app’s goals, the problem it’s trying to solve, and a profile of its intended market.

From here, you can determine the app requirements. 

This includes:

  • Deliverables and features
  • The tech stack
  • Milestones
  • Skills and expertise you need to build your app

You’ll also get a rough idea of the estimated cost and timeframe.

Also, you’ll do simple wireframes and app flows during product discovery.

This can help paint a rough picture of what your app will look like once launched.

Product discovery is hands down the most critical phase of the development cycle.

Many of the top causes for failed projects, such as changing objectives or unidentified risks, can be solved with proper product discovery.

Common causes of project failure

That’s why you need to take your time in this phase.

A good benchmark is around 3 – 8 weeks or around 10% of your total development time.

Software design (8-12 weeks)

Once the software requirements are well-defined, the next step is to design your software.

Here’s what you’ll be doing:

These steps are non-negotiable if you want to create a truly user-friendly design and give your users a great experience.

Here’s a comparison between a wireframe, a mockup, and a prototype – you can see how the design evolves with every iteration.

Wireframe vs mockup vs prototype

But, you might ask – how long does this phase take, on average?

Software design takes 8 – 12 weeks on average, with 2-3 weeks dedicated to UX design and 3-4 weeks for UI design.

Obviously, the more visually demanding your app is, the longer this phase will take.

For example, adding animations and custom gestures can easily add weeks to this estimate.

Most of the delays happen because of the back-and-forth between the designer and stakeholders for approval.

Also, doing usability testing with a prototype can further stretch timelines.

Developing the software (12-24 weeks)

This is where the magic happens.

In this phase, the development team takes the UI design and your requirements and turns them into a working piece of software.

This is where roughly half of your development time is spent.

On average, that translates to around 12 – 24 weeks, split evenly between your software’s front and back ends.

However, you’ll speed this up if you develop them simultaneously – which you should always do.

App development timeline

The main reason for delays in this phase is the complexity of your project.

Also, the size and expertise of your development team play a role too, because senior engineers and bigger teams work faster.

Software testing (2-3 weeks)

The testing phase ensures that your software is bug-free before launch, which is why your QA team has to be very thorough – and that can take time.

Depending on the number of bugs found, testing can take a few weeks to months.

And if there’s a critical issue, the project could return to the development phase, stretching the timeline even more.

But, there’s a simple solution to this problem – integrating QA from the start of development.

And there’s a great reason to do that beyond just saving time – you’ll save a lot of money, too, because the sooner you find a bug, the cheaper it is to fix.

Cost of defects

It can be up to 100x cheaper to fix a bug during requirements gathering than after deployment.

Also, the testing tools your team uses will influence the length of the testing phase.

If they use automated testing tools like Playwright and Selenium, which constantly run repetitive tests, they’ll be able to work faster without sacrificing quality.

And they’ll be able to devote their time to solving more complex and pressing problems.

So, how long does this all take?

On average, you can expect to spend 2 – 3 weeks in the testing phase after you’ve finished development – even if you’ve been doing QA from the start.

Why it’s important to accurately estimate development time

Accurately estimating development time is key for successful project delivery – but, why is that the case?

For starters, with an accurate time estimate and detailed timeline, you’ll have a much easier time planning development.

You’ll be able to effectively assign resources and set realistic deadlines for your team.

This is important because it will help you avoid one of the biggest project killers – scope creep.

If you want to learn more about why scope creep is so dangerous, DECODE co-founder and CEO, Marko Strizic, talked about how scope creep destroys projects (and how you can avoid it) on a recent episode of The Roadmap:

Also, an accurate estimate will prevent you from going over budget – after all, time is money.

You’ll be able to align the budget with actual project needs.

And that’s the best way to successfully finish a project within or under budget.

What are the challenges of estimating software development time?

It’s no secret that estimating the software development timeline is challenging at best and near impossible at worst. And it’s mostly due to these four reasons.

Design complexity

A complex app design, with a customized UI and animations, generally takes more time and effort to develop. Thus, it will stretch your development timeline significantly.

Consider how easy it is to create an app with a simple UI. You can always rely on iOS or Android’s native libraries and pre-built components to quickly put together your app interface.

In these cases, estimating the time you’ll need to design your app is easy.

Apple design resources

But it’s not so easy with a large, custom app design. That’s because you must create most of it from scratch, which could complicate your estimation.

Animation, for example, is a complex process that could easily delay your project.

On average, expect to add 9 – 10 weeks when designing a custom app UI.

Software complexity

As with app design, software complexity is directly proportional to development time. In other words, the more features or advanced functionality it has, the more time it takes to develop.

To give you an idea, a simple app with only a few screens takes around 3 – 5 months to build.

Contrast that with a feature-packed app like Uber or Facebook, which can easily take 9 months or more to code.

Mobile app development timelines

This isn’t at all surprising. Complex features require more coding and testing time to get right.

Plus, you need buffer time to account for problem-solving and other roadblocks. On top of that, feature-rich apps take more time to maintain and update.

To make things worse, development times for complex projects are also harder to estimate. Because of the many variables involved, it’s easy to miscalculate your prediction.

Ability to integrate

Integration is now becoming the norm with modern apps, as it’s rare to find a standalone app these days.

Unfortunately, integrating an app with existing software isn’t an easy task. It takes time and effort that, consequently, stretches the development timeline.

This is especially true if you want to integrate into legacy systems.

Since older software may not have APIs or data access layers (DALS) to facilitate integration, you’d need to build them from scratch.

3 common types of legacy systems integration

Fortunately, there are ways to shorten the integration process and simplify your estimation.

For instance, you can use third-party plug-ins like Open banking or Twilio to connect your software with other services quickly.

Database migration

Migrating data from an old system can seem trivial, but only if everything is in perfect order. In the real world, this rarely happens.

Often, data is incomplete or fragmented, so it needs to be processed first. Or it could be that the data format is incompatible with the new system, so it needs to be converted first.

That’s why you often need to create scripts to handle this. And that takes time.

And it doesn’t end there. Once the data is imported, you must test and optimize it to ensure good performance.

Here’s an overview of the data migration steps.

Data migration steps

To further complicate the issue, it’s hard to estimate how long data migration would actually take.

At best, it just takes a few days. But when working with a large volume of problematic data, it could stretch to months.

6 key steps to estimate software development time

Now, we’ll cover the key steps you need to follow to estimate software development time.

Define project scope and requirements

If you want to accurately estimate development time, you first need to know what you’re building.

And that means defining your project’s scope and requirements.

At this stage, you’ll define:

  • Project goals
  • Features
  • Functional and non-functional requirements

Once you’ve got all of these elements, you can define your project’s scope i.e. the deliverables and resources needed to complete it.

Project scope

Then, you’ll have everything you need to start estimating how long a project will take to finish.

But, before you dive in, you also need to identify risks and uncertainties, which we’ll discuss next.

Key tips for defining project scope and requirements

  • Use feature prioritization methodsyou should use prioritization methods like the MoSCoW method or value vs. effort to decide which features are the most important and impactful
  • Write clear and detailed documentation – the project documentation you write should be clear, detailed, and easy to understand so you avoid misunderstandings mid-development
  • Regularly review scope and requirements – during development, you should regularly review project scope and requirements to fine-tune your time estimate

Identify risks and uncertainties

Identifying risks before you start estimating development time is an absolute must.

If you don’t, you risk unnecessary delays and cost overruns derailing your project or even outright killing it.

So, risk identification is clearly important – but, which risks should you look out for?

Here are 7 common project risks you need to be aware of:

7 common project risks

And you need to account for each of these risks.

Here’s an example – let’s say your project depends on several third-party API integrations.

The risks you might face here are potential downtime and compatibility issues.

So, your estimate should include time buffers to account for these risks and you should have a contingency plan so you can resolve them quickly.

And this will help you create a realistic estimate.

Key tips for identifying risks and uncertainties

  • Use historical data – as a starting point, you should review past projects and identify the most common project risks
  • Categorize potential risks – you should categorize potential risks based on their potential impact and likelihood that they’ll happen, so you can prioritize managing the most critical ones
  • Create a contingency plan – for risks with significant potential impact, you should create detailed contingency plans so you can respond quickly in case they materialize

Break down the project into smaller tasks

Once you’ve defined your project’s scope and the risks involved, your next step is to break down the project into smaller, more manageable tasks.

Dividing it into smaller tasks will allow you to give a more precise estimate and help you more effectively track progress during development.

So, how should you do it?

Your best bet is to use a work breakdown structure (WBS).

Here’s how a WBS works:

Work breakdown structure

In a nutshell, a WBS creates a hierarchy of deliverables, tasks, subtasks, and activities needed to complete your project.

This makes it easier to estimate how long the project will take to complete and plan development.

And that’s exactly what you should want.

Key tips for breaking down the project

  • Use a work breakdown structure – you should use a work breakdown structure (WBS) to systematically divide the project into smaller, more manageable tasks
  • Group tasks into milestones – grouping related tasks together into milestones will make your estimate more accurate and help you track progress more effectively 
  • Review and adjust during development – you need to regularly review your task breakdown once development starts and make necessary adjustments to your estimate

Choose an estimation method

Once you’ve broken down your project into smaller tasks you need to choose an estimation method.

And picking the right one is crucial for your project’s success.

We’ll cover each in more detail later, but the 3 most popular estimation methods you need to know are:

  • Analogous estimation – predicting the time required to finish a project based on a similar past project
  • Bottom-up estimation – using individual tasks as a basis for your estimate
  • Parametric estimation – using historical and statistical data to get an estimate

You just need to remember one thing – different projects need different approaches and depending on the project, these methods can give you wildly different estimates.

So, you need to make sure you’re using the right method before you commit to it.

Key tips for choosing the right estimation method

  • Match the method to project complexity – you need to pick the estimation method that best fits the nature and complexity of your project
  • Combine multiple methods – you should combine several methods for a more refined, precise estimate
  • Consider stakeholder expectations – when estimating development time, make sure to consider stakeholders expectations so the project can actually meet expectations

Pick the right team for the project

The final step before you calculate your estimate is picking the team that will actually work on the project.

And the team you choose can have a huge impact on your estimate.

If you have a team of mostly senior engineers, they’ll be able to complete the work faster.

But there’s a catch – they’re also more expensive, so you’ll need to be mindful of your budget.

Also, make sure the team you pick is cross-functional.

Cross-functional team

Cross-functional teams aren’t just a fad, either.

According to a Harvard Business Review study, cross-functional teams supported by management have a 76% project success rate.

And the best part?

In a cross-functional team, the team members can work on different parts of the project simultaneously while also collaborating with each other.

This helps reduce bottlenecks and speeds up their overall progress, so keep that in mind when estimating development time.

Key tips for picking the right team

  • Identify the skills required – before choosing a team, you need to identify the specific skills and expertise needed for the project to be completed successfully
  • Build a cross-functional team – cross-functional teams have a broader range of skills and perspectives, so they’re more likely to successfully complete the project
  • Hire a dedicated or extended teamif you don’t have the budget to hire a full in-house team, hiring a dedicated or extended team is a good, cost-effective option

Calculate and document your estimate

Finally, the last thing left to do is to calculate and document your estimate.

Here, you should do a detailed breakdown of the project and then review it with your team.

This is important because you need to make sure your estimate is actually realistic and the team can meet the deadline you set.

tech CEO 1

Get exclusive founder insights delivered monthly

Also, make sure you document all of your assumptions behind your estimates and review them with your team.

This way, you’ll know if you’ve made a wrong call in your estimation which you can then correct.

Also, the documentation you write will be a handy reference point you can use to track progress during development.

Key tips for calculating your estimate

  • Add time buffers – you should add time buffers to account for unexpected delays and risks, which will make your estimate more realistic
  • Document your assumptions – you need to document all the assumptions behind your estimates, which will be helpful if you have to change them mid-development
  • Review the estimate with your team – once you’ve done your estimate, you need to review and validate it with your team so that they’re actually realistic and the team can deliver them

Methods for estimating development time

This section will go through three of the most popular methods for estimating development timeframes.

Analogous estimation

Analogous estimation is a technique where you predict the time required for a project based on a similar project in the past.

For instance, if you saw that it takes your team six months on average to create a mobile wallet app, you’d give roughly the same estimate for any mobile wallet app in the future.

Analogous estimation

Analogous estimation is the best route if you don’t have enough time and data available to give a more accurate timeframe.

It’s also relatively easy, requiring no fancy calculations or models.

However, its biggest flaw is inaccuracy. That’s because analogous estimation is based on the assumption that a past project is exactly the same as your current project.

That’s simply not the case.

Factors such as unexpected issues, a shifting market, and a different tech stack could skew your estimates. Even a new team member can impact development times.

The key to making analogous estimation work is to pick a past project that’s as close to your current one as possible.

It’s also beneficial to look at the project’s metrics, like lead time and code churn, to give a better picture.

For this reason, analogous estimation is impossible for newer development teams with no project history.

Bottom-up estimation

In bottom-up estimation, you break a project down into individual tasks. You then use these as the basis for predicting your timeline.

For instance, let’s say you determine that the project requires roughly 50 individual tasks, each requiring an average of four days to complete.

Thus, your software should take 200 days to complete, or around 6 – 7 months.

Bottom-up estimation

Bottom-up estimation is a much more accurate method than analogous estimation. That’s because you can account for as many factors as possible.

While breaking down your project, you’ll inevitably tackle bottlenecks and issues, which you’ll need to compensate for.

For example, if your team lacks cybersecurity skills to create a fintech app, you might add additional time to account for training and research.

Of course, the flip side is that bottom-up estimation takes more time and effort because you need to analyze a project and gather requirements.

The larger the project, the longer bottom-up estimation takes, making it hard to scale.

You also can’t rely on past estimations and would need to start from scratch every time.

Despite these shortcomings, bottom-up estimation is one of the better methods for getting accurate timelines. So if you have the time and resources, go for it.

Parametric estimation

Parametric estimation uses a combination of historical and statistical data to calculate a time prediction.

In other words, it takes the best of both bottom-up and analogous methods.

Parametric estimation

Because it considers many variables, parametric estimation gives highly accurate predictions.

In practice, however, its accuracy depends on the statistical model used and the quality of the data.

Parametric estimation is also reusable. Once you’ve refined an algorithm and proven it works, you can apply it to future projects.

In fact, a parametric model tends to get more accurate with time.

The number one drawback of this method is the huge time commitment and expertise involved, as you’ll need to gather data and crunch the numbers.

Thus, this approach is best for larger projects.

Software development time estimation: FAQs

Accurately estimating development time is important because:

  • You’ll have an easier time planning development
  • It helps you avoid scope creep
  • It will prevent you from going over budget

The steps you should follow to estimate development time are:

  • Define project scope and requirements
  • Identify risks and uncertainties
  • Break down the project into smaller tasks
  • Choose an estimation method
  • Pick the right team for the project
  • Calculate and document your estimate

The top methods you should use to estimate development time are:

  • Analogous estimation
  • Bottom-up estimation
  • Parametric estimation

Need to estimate your project timeline?

In reality, estimating a project timeline is equal parts art and science.

You can rely on knowledge and tactics. However, it’s the experience that will really help give an accurate prediction.

And that’s what we can bring to the table. With a handful of successful apps completed on time and on budget, we believe we can help you achieve the same in your project.

Interested? Schedule a free consultation with us today, and let’s talk!

Categories
Written by

Marin Luetic

CCO

A seasoned software engineering executive, Marin’s role combines his in-depth understanding of software engineering processes (particularly mobile) with product and business strategies. Humbly boasting 20+ years of international experience at the forefront of telecoms, Marin knows how to create and deliver state of the art software products to businesses of all sizes. Plus, his skills as a lifelong basketball player mean he can lead a team to victory. When he’s not hopping from meeting to meeting, you’ll find Marin listening to indie rock, or scouring the latest IT news.

Related articles