Software cost estimation

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 1

Objectives

To introduce the fundamentals of software

costing and pricing
To describe three metrics for software
productivity assessment
To explain why different techniques should
be used for software estimation
To describe the principles of the COCOMO 2
algorithmic cost estimation model

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 2

Topics covered

Software productivity
Estimation techniques
Algorithmic cost modelling
Project duration and staffing

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 3

Fundamental estimation questions

How much effort is required to complete an

activity?
How much calendar time is needed to
complete an activity?
What is the total cost of an activity?
Project estimation and scheduling are
interleaved management activities.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 4

Software cost components

Hardware and software costs.

Travel and training costs.
Effort costs (the dominant factor in most
projects)

The salaries of engineers involved in the project;

Social and insurance costs.

Effort costs must take overheads into account

Costs of building, heating, lighting.

Costs of networking and communications.
Costs of shared facilities (e.g library, staff restaurant,
etc.).

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 5

Costing and pricing

Estimates are made to discover the cost, to

the developer, of producing a software
system.
There is not a simple relationship between
the development cost and the price charged
to the customer.
Broader organisational, economic, political
and business considerations influence the
price charged.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 6

Software pricing factors

Market
opportunity

A d evelopment organisation may quote a low price because it

wishes to move into a new segment of the software market.
Accepting a low profit on one project may give the opportunity
of more profit later. The experience gained may allow new
products to be developed.

Cost estimate
uncertainty

If an o rganisation is unsure of its cost estimate, it may increase

its price by some contingency over and above its normal profit.

Contractual terms

A c ustomer may be willing to allow the developer to retain

ownership of the source code and reuse it in other projects. The
price charged may then be less than if the software source code
is handed over to the customer.

Requirements
volatility

If the requirements are likely to change, an organisation may

lower its price to win a c ontract. After the contract is awarded,
high prices can be charged for changes to the requirements.

Financial health

Developers in financial difficulty may lower their price to ga in

a c ontract. It is better to make a sm aller than normal profit or
break even than to go out of business.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 7

Software productivity

A measure of the rate at which individual

engineers involved in software development
produce software and associated
documentation.
Not quality-oriented although quality
assurance is a factor in productivity
assessment.
Essentially, we want to measure useful
functionality produced per time unit.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 8

Productivity measures

Size related measures based on some

output from the software process. This may
be lines of delivered source code, object
code instructions, etc.
Function-related measures based on an
estimate of the functionality of the delivered
software. Function-points are the best known
of this type of measure.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 9

Measurement problems

Estimating the size of the measure (e.g. how

many function points).
Estimating the total number of programmer
months that have elapsed.
Estimating contractor productivity (e.g.
documentation team) and incorporating this
estimate in overall estimate.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 10

Lines of code

What's a line of code?

The measure was first proposed when programs were

typed on cards with one line per card;
How does this correspond to statements as in Java which
can span several lines or where there can be several
statements on one line.

What programs should be counted as part of the

system?
This model assumes that there is a linear
relationship between system size and volume of
documentation.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 11

Productivity comparisons

The lower level the language, the more

productive the programmer

The same functionality takes more code to implement in a

lower-level language than in a high-level language.

The more verbose the programmer, the higher

the productivity

Measures of productivity based on lines of code suggest

that programmers who write verbose code are more
productive than programmers who write compact code.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 12

System development times

Analysis
Assembly code
High-level language

Assembly code
High-level language

Ian Sommerville 2004

3 weeks
3 weeks

Design

Coding

Testing

5 weeks
5 weeks

8 weeks
4 weeks

10
weeks
6 weeks

Documentation

Size

Effort

Productivity

5000 lines
1500 lines

28 weeks
20 weeks

714 lines/month
300 lines/month

Software Engineering, 7th edition. Chapter 26

2 weeks
2 weeks

Slide 13

Function points

Based on a combination of program characteristics

external inputs and outputs;

user interactions;
external interfaces;
files used by the system.

A weight is associated with each of these and the

function point count is computed by multiplying each
raw count by the weight and summing all values.
UFC = (number of elements of given type) (weight)

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 14

Function points

The function point count is modified by complexity of

the project
FPs can be used to estimate LOC depending on the
average number of LOC per FP for a given language

LOC = AVC * number of function points;

AVC is a language-dependent factor varying from 200300 for assemble language to 2-40 for a 4GL;

FPs are very subjective. They depend on the

estimator

Automatic function-point counting is impossible.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 15

Object points

Object points (alternatively named application

points) are an alternative function-related measure
to function points when 4Gls or similar languages
are used for development.
Object points are NOT the same as object classes.
The number of object points in a program is a
weighted estimate of

The number of separate screens that are displayed;

The number of reports that are produced by the system;
The number of program modules that must be developed
to supplement the database code;

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 16

Object point estimation

Object points are easier to estimate from a

specification than function points as they are
simply concerned with screens, reports and
programming language modules.
They can therefore be estimated at a fairly
early point in the development process.
At this stage, it is very difficult to estimate
the number of lines of code in a system.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 17

Productivity estimates

Real-time embedded systems, 40-160

LOC/P-month.
Systems programs , 150-400 LOC/P-month.
Commercial applications, 200-900
LOC/P-month.
In object points, productivity has been
measured between 4 and 50 object
points/month depending on tool support and
developer capability.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 18

Factors affecting productivity

Application
domain
experience

Knowledge of the application domain is essential for effective

software development. Engineers who already understand a
domain are likely to be the most productive.

Process quality

The development process used can have a s ignificant effect on

productivity. This is covered in Chapter 28.

Project size

The larger a project, the more time required for team

communications. Less time is available for development so
individual productivity is reduced.

Technology
support

Good support technology such as C ASE tools, configuration

management systems, etc. can improve productivity.

Working
environment

As I discussed in Chapter 25, a q uiet working environment with

private work areas contributes to improved productivity.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 19

Quality and productivity

All metrics based on volume/unit time are

flawed because they do not take quality into
account.
Productivity may generally be increased at the
cost of quality.
It is not clear how productivity/quality metrics
are related.
If requirements are constantly changing then an
approach based on counting lines of code is not
meaningful as the program itself is not static;

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 20

Estimation techniques

There is no simple way to make an accurate

estimate of the effort required to develop a software
system

Initial estimates are based on inadequate information in a

user requirements definition;
The software may run on unfamiliar computers or use
new technology;
The people in the project may be unknown.

Project cost estimates may be self-fulfilling

The estimate defines the budget and the product is

adjusted to meet the budget.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 21

Changing technologies

Changing technologies may mean that previous

estimating experience does not carry over to new
systems

Distributed object systems rather than mainframe

systems;
Use of web services;
Use of ERP or database-centred systems;
Use of off-the-shelf software;
Development for and with reuse;
Development using scripting languages;
The use of CASE tools and program generators.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 22

Estimation techniques

Algorithmic cost modelling.

Expert judgement.
Estimation by analogy.
Parkinson's Law.
Pricing to win.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 23

Estimation techniques
Algorithmic
cost modelling

A model based on historical cost information that relates some software

metric (usually its size) to the project cost is used. An estimate is made
of that metric and the model predicts the effort required.

Expert
judgement

Several experts on the proposed software development techniques and

the application domain are consulted. They each estimate the project
cost. These estimates are compared and discussed. The estimation
process iterates until an agreed estimate is reached.

Estimation by
analogy

This technique is applicable when other projects in the same application

domain have been completed. The cost of a new project is estimated by
analogy with these completed projects. Myers (Myers 1989) gives a
very clear description of this approach.

Parkinsons
Law

Parkinsons Law states that work expands to fill the time available. The
cost is determined by available resources rather than by objective
assessment. If the software has to be delivered in 12 months and 5
people are available, the effort required is estimated to be 60 personmonths.

Pricing to win

The software cost is estimated to be whatever the customer has

available to spend on the project. The estimated effort depends on the
customers budget and not on the software functionality.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 24

Pricing to win

The project costs whatever the customer has

to spend on it.
Advantages:

You get the contract.

Disadvantages:

The probability that the customer gets the

system he or she wants is small. Costs do not
accurately reflect the work required.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 25

Top-down and bottom-up estimation

Any of these approaches may be used topdown or bottom-up.

Top-down

Start at the system level and assess the overall

system functionality and how this is delivered
through sub-systems.

Bottom-up

Start at the component level and estimate the

effort required for each component. Add these
efforts to reach a final estimate.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 26

Top-down estimation

Usable without knowledge of the system

architecture and the components that might
be part of the system.
Takes into account costs such as integration,
configuration management and
documentation.
Can underestimate the cost of solving
difficult low-level technical problems.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 27

Bottom-up estimation

Usable when the architecture of the system

is known and components identified.
This can be an accurate method if the
system has been designed in detail.
It may underestimate the costs of system
level activities such as integration and
documentation.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 28

Estimation methods

Each method has strengths and weaknesses.

Estimation should be based on several methods.
If these do not return approximately the same result,
then you have insufficient information available to
make an estimate.
Some action should be taken to find out more in
order to make more accurate estimates.
Pricing to win is sometimes the only applicable
method.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 29

Pricing to win

This approach may seem unethical and unbusinesslike.

However, when detailed information is lacking it may
be the only appropriate strategy.
The project cost is agreed on the basis of an outline
proposal and the development is constrained by that
cost.
A detailed specification may be negotiated or an
evolutionary approach used for system
development.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 30

Algorithmic cost modelling

Cost is estimated as a mathematical function of

product, project and process attributes whose
values are estimated by project managers:

Effort = A SizeB M

A is an organisation-dependent constant, B reflects the

disproportionate effort for large projects and M is a
multiplier reflecting product, process and people
attributes.

The most commonly used product attribute for cost

estimation is code size.
Most models are similar but they use different values
for A, B and M.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 31

Estimation accuracy

The size of a software system can only be

known accurately when it is finished.
Several factors influence the final size

Use of COTS and components;

Programming language;
Distribution of system.

As the development process progresses

then the size estimate becomes more
accurate.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 32

Estimate uncertainty

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 33

The COCOMO model

An empirical model based on project experience.

Well-documented, independent model which is not
tied to a specific software vendor.
Long history from initial version published in 1981
(COCOMO-81) through various instantiations to
COCOMO 2.
COCOMO 2 takes into account different approaches
to software development, reuse, etc.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 34

COCOMO 81
Project
complexity

Formula

Description

Simple

PM = 2.4 (KDSI)1.05 M

Well-understood applications
developed by small teams.

Moderate

PM = 3.0 (KDSI)1.12 M

More complex projects where

team members may have limited
experience of related systems.

Embedded

PM = 3.6 (KDSI)1.20 M

Complex projects where the

software is part of a strongly
coupled complex of hardware,
s o f t w a r e , r e g u l a t i o n s and
operational procedures.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 35

COCOMO 2

COCOMO 81 was developed with the

assumption that a waterfall process would be
used and that all software would be developed
from scratch.
Since its formulation, there have been many
changes in software engineering practice and
COCOMO 2 is designed to accommodate
different approaches to software development.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 36

COCOMO 2 models

COCOMO 2 incorporates a range of sub-models

that produce increasingly detailed software
estimates.
The sub-models in COCOMO 2 are:

Application composition model. Used when software is

composed from existing parts.
Early design model. Used when requirements are
available but design has not yet started.
Reuse model. Used to compute the effort of integrating
reusable components.
Post-architecture model. Used once the system
architecture has been designed and more information
about the system is available.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 37

Use of COCOMO 2 models

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 38

Application composition model

Supports prototyping projects and projects where

there is extensive reuse.
Based on standard estimates of developer
productivity in application (object) points/month.
Takes CASE tool use into account.
Formula is

PM = ( NAP (1 - %reuse/100 ) ) / PROD

PM is the effort in person-months, NAP is the number of

application points and PROD is the productivity.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 39

Object point productivity

Developers experience
and capability

Very low

Low

Nominal

High

Very high

ICASE maturity and

capability

Very low

Low

Nominal

High

Very high

PROD (NOP/month)

13

25

50

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 40

Early design model

Estimates can be made after the

requirements have been agreed.
Based on a standard formula for algorithmic
models

PM = A SizeB M where

M = PERS RCPX RUSE PDIF PREX

FCIL SCED;
A = 2.94 in initial calibration, Size in KLOC, B
varies from 1.1 to 1.24 depending on novelty of
the project, development flexibility, risk
management approaches and the process
maturity.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 41

Multipliers

Multipliers reflect the capability of the

developers, the non-functional requirements,
the familiarity with the development platform,
etc.

RCPX - product reliability and complexity;

RUSE - the reuse required;
PDIF - platform difficulty;
PREX - personnel experience;
PERS - personnel capability;
SCED - required schedule;
FCIL - the team support facilities.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 42

The reuse model

Takes into account black-box code that is

reused without change and code that has to
be adapted to integrate it with new code.
There are two versions:

Black-box reuse where code is not modified. An

effort estimate (PM) is computed.
White-box reuse where code is modified. A size
estimate equivalent to the number of lines of
new source code is computed. This then adjusts
the size estimate for new code.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 43

Reuse model estimates 1

For generated code:

PM = (ASLOC * AT/100)/ATPROD
ASLOC is the number of lines of generated
code
AT is the percentage of code automatically
generated.
ATPROD is the productivity of engineers in
integrating this code.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 44

Reuse model estimates 2

When code has to be understood and

integrated:

ESLOC = ASLOC * (1-AT/100) * AAM.

ASLOC and AT as before.
AAM is the adaptation adjustment multiplier
computed from the costs of changing the reused
code, the costs of understanding how to
integrate the code and the costs of reuse
decision making.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 45

Post-architecture level

Uses the same formula as the early design

model but with 17 rather than 7 associated
multipliers.
The code size is estimated as:

Number of lines of new code to be developed;

Estimate of equivalent number of lines of new code
computed using the reuse model;
An estimate of the number of lines of code that
have to be modified according to requirements
changes.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 46

The exponent term

This depends on 5 scale factors (see next slide).

Their sum/100 is added to 1.01
A company takes on a project in a new domain. The
client has not defined the process to be used and
has not allowed time for risk analysis. The company
has a CMM level 2 rating.

Precedenteness - new project (4)

Development flexibility - no client involvement - Very high
(1)
Architecture/risk resolution - No risk analysis - V. Low .(5)
Team cohesion - new team - nominal (3)
Process maturity - some control - nominal (3)

Scale factor is therefore 1.17.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 47

Exponent scale factors

Precedentedness

Reflects the previous experience of the organisation with this type of

project. Very low means no previous experience, Extra high means
that the organisation is completely familiar with this application
domain.

Development
flexibility

Reflects the degree of flexibility in the development process. Very

low means a prescribed process is used; Extra high means that the
client only sets general goals.

Architecture/risk
resolution

Reflects the extent of risk analysis carried out. Very low means little
analysis, Extra high means a complete a thorough risk analysis.

Team cohesion

Reflects how well the development team know each other and work
together. Very low means very difficult interactions, Extra high
means an integrated and effective team with no communication
problems.

Process maturity

Reflects the process maturity of the organisation. The computation

of this value depends on the CMM Maturity Questionnaire but an
estimate can be achieved by subtracting the CMM process maturity
level from 5.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 48

Multipliers

Product attributes

Computer attributes

Constraints imposed on the software by the hardware

platform.

Personnel attributes

Concerned with required characteristics of the software

product being developed.

Multipliers that take the experience and capabilities of the

people working on the project into account.

Project attributes

Concerned with the particular characteristics of the

software development project.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 49

Effects of cost drivers

Exponent value
1.17
System size (including factors for reuse 128, 000 DSI
and requirements volatility)
Initial COCOMO estimate without
730 person-months
cost drivers
Reliability
Complexity
Memory constraint
Tool use
Schedule
Adjusted COCOMO estimate

Very high, multiplier = 1.39

Very high, multiplier = 1.3
High, multiplier = 1.21
Low, multiplier = 1.12
Accelerated, multiplier = 1.29
2306 person-months

Reliability
Complexity
Memory constraint
Tool use
Schedule
Adjusted COCOMO estimate

Very low, multiplier = 0.75

Very low, multiplier = 0.75
None, multiplier = 1
Very high, multiplier = 0.72
Normal, multiplier = 1
295 person-months

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 50

Project planning

Algorithmic cost models provide a basis for

project planning as they allow alternative
strategies to be compared.
Embedded spacecraft system

Must be reliable;
Must minimise weight (number of chips);
Multipliers on reliability and computer constraints > 1.

Cost components

Target hardware;
Development platform;
Development effort.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 51

Management options

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 52

Management option costs

Option

RELY

STOR

TIME

TOOLS

LTEX

A
B

1.39
1.39

1.06
1

1.11
1

0.86
1.12

1
1.22

63
88

C
D
E
F

1.39
1.39
1.39
1.39

1
1.06
1
1

1.11
1.11
1
1

0.86
0.86
0.72
1.12

1
0.84
1.22
0.84

60
51
56
57

Ian Sommerville 2004

Total effort Software cost

Total cost

949393
1313550

Hardware
cost
100000
120000

895653
769008
844425
851180

105000
100000
220000
120000

1000653
897490
1044159
1002706

Software Engineering, 7th edition. Chapter 26

1049393
1402025

Slide 53

Option choice

Option D (use more experienced staff)

appears to be the best alternative

However, it has a high associated risk as

experienced staff may be difficult to find.

Option C (upgrade memory) has a lower cost

saving but very low risk.
Overall, the model reveals the importance of
staff experience in software development.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 54

Project duration and staffing

As well as effort estimation, managers must

estimate the calendar time required to complete a
project and when staff will be required.
Calendar time can be estimated using a COCOMO 2
formula

TDEV = 3 (PM)(0.33+0.2*(B-1.01))

PM is the effort computation and B is the exponent

computed as discussed above (B is 1 for the early
prototyping model). This computation predicts the nominal
schedule for the project.

The time required is independent of the number of

people working on the project.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 55

Staffing requirements

Staff required cant be computed by diving

the development time by the required
schedule.
The number of people working on a project
varies depending on the phase of the project.
The more people who work on the project,
the more total effort is usually required.
A very rapid build-up of people often
correlates with schedule slippage.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 56

Key points

There is not a simple relationship between

the price charged for a system and its
development costs.
Factors affecting productivity include
individual aptitude, domain experience, the
development project, the project size, tool
support and the working environment.
Software may be priced to gain a contract
and the functionality adjusted to the price.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 57

Key points

Different techniques of cost estimation should be used

when estimating costs.
The COCOMO model takes project, product, personnel
and hardware attributes into account when predicting
effort required.
Algorithmic cost models support quantitative option
analysis as they allow the costs of different options to
be compared.
The time to complete a project is not proportional to the
number of people working on the project.

Ian Sommerville 2004

Software Engineering, 7th edition. Chapter 26

Slide 58