Glossary

# Effort Estimation

Effort estimation is an important part of project planning, where the necessary resource input to achieve a goal is estimated. It forms the basis for the creation of project budgets, schedules, and resource plans. Accurate effort estimation is crucial for the success of a project and can be determined through various methods, such as expert surveys, analogy approaches, or parametric procedures.

## Effort Estimation in Detail

Effort estimation is a central process in project planning and management, where the necessary resource input to achieve a specific goal is estimated. This can refer to the effort in terms of time, cost, personnel, material, or other resources. The estimation of effort forms the basis for creating project budgets, schedules, and resource plans and is crucial for the success of a project.

## Objectives of Effort Estimation

Effort estimation pursues various objectives, including:

Â
• Determining the required resource input for the successful execution of a project
• Â
• Creation of project budgets and schedules
• Â
• Identification of risks and bottlenecks in resource allocation
• Â
• Monitoring and controlling the project by comparing planned and actual effort
• Â
• Improving planning quality and accuracy through continuous learning from past projects

## Methods of Effort Estimation

There are a variety of methods for effort estimation that differ in their accuracy, complexity, and applicability. The most common methods include:

### Expert Surveys

With expert surveys, individuals who have experience and expertise in the relevant field are asked for their assessment of the required effort. This method is easy to apply and can deliver quick results but is subject to the risk of misjudgments and subjective opinions of the experts.

### Analogy Approaches

The analogy approach is based on the assumption that similar projects also cause similar efforts. Therefore, the effort for a new project is estimated by comparing it with previously completed, similar projects. The accuracy of this method depends on the availability and quality of data about past projects.

### Parametric Procedures

Parametric procedures use mathematical models to estimate the effort based on quantitative parameters, such as project size, complexity, or the number of employees. This method can be very accurate but requires the availability of data and knowledge of the relationships between the parameters and the effort.

### Bottom-Up Approach

The bottom-up approach breaks down a project into individual work packages or tasks and estimates the effort for each of these elements separately. The total effort is then determined by summing up the individual efforts. This method can achieve high accuracy but is labor-intensive and requires a detailed understanding of the project.

### Top-Down Approach

The top-down approach estimates the total effort of a project based on global parameters, such as project size or the number of employees. The total effort is then distributed to the individual work packages or tasks. This method is less labor-intensive than the bottom-up approach but can be less accurate.

## Challenges and Risks of Effort Estimation

Precise effort estimation is crucial for the success of a project, as it forms the basis for project planning and management. However, effort estimation is often fraught with uncertainties and risks, such as:

Â
• Misjudgments and subjective opinions of the experts
• Â
• Lack of availability or quality of data about past projects
• Â
• Unforeseen events and changes during the project
• Â
• Complexity of the project and the interrelationships between parameters

To overcome these challenges, companies and project managers should systematically approach effort estimation and combine multiple methods to increase the accuracy of the estimation. They should also continuously learn from past projects and adjust their estimation processes and models to improve planning quality and accuracy.