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November 20, 2017
Sales manager
When you look for a software team to work on your project, the first two questions you ask are:

  1. How much will it cost me?
  2. How soon can I launch it?
These are two of the most important project estimates you care about. But not every estimation you are given will turn out to be true. Let's get a closer look at the project estimation statistics and discover the ways to avoid the companies who will likely fail to meet the ambitious goals they set.


Only 1% of the software projects meet the scope, budget and timeline goals. In the meantime, 60% of all projects of 50K+ lines of code are canceled before they reach the final stages of development. It's no wonder companies run out of money and patience since 67% of the software projects are underestimated by 290%! As a result, the economy in the US alone loses 50 to 150 billion dollars every year.


If you don't want to add to this sad statistics, pay close attention to the estimations the software company provides. There are certain factors that scream "wrong estimation", and you can easily pick up on them if you pay close attention. Here is our list of five red flags to avoid when choosing a software development team.

The Team Has No Prior Experience With Similar Projects

You can hire a company that has no prior experience with your industry-specific requirements. However, this lack of knowledge and skills should be appropriately accounted for in the project estimation. If the company assures you that they can complete the project as quickly as any of their previous works, they are probably overestimating themselves.

Project Manager Doesn't Work With Developers On The Estimation

Find out who worked on your project's estimation. If it was a combined effort of the project manager and the development team, the chances are higher than the estimated time and budget will be met. If the PM compiled the estimation without consulting the developers, he or she might have failed to factor in important details. Ask for an updated estimation with the developers' input or switch to another team.

You Get A Project Estimation Without Task Breakdown

Your project estimation should consist of more than two lines reading the overall time needed to complete it and the sum of money you will be asked to pay. If you don't understand the method used to estimate the time and money expenses, ask for a step-by-step breakdown. You should see, how much time every development stage will require, if not how much it will cost you. If the team fails to provide a breakdown, they are likely too busy to create a full estimation. Therefore, they could have missed important variables, like the vacations and sick days, the time needed for debugging and meetings.

The Time Estimation Is Way Too Optimistic

Companies that are struggling to attract new clients can use underhanded tactics to gain your attention. If you get an unrealistically short timeline, the warning bells should be going off in your head. Either the team did not take into account all the factors, or they are purposefully providing you with an understated estimation to stand out among the competition. Be realistic and do not trust the companies who offer to complete the work twice as quick as other teams.

The Team Can't Explain The Cost Estimation Model

You were offered several engagement modes and chose the one that suited your needs. However, there are different cost estimation systems, and you should get an explanation before you sign on the dotted line. If the team fails to explain which cost estimation model they used, and why, you should steer clear. Look for another company, more willing to meet you halfway.

If you want your project to become of the lucky few, that meet the budget and time estimates, pay close attention to the preliminary numbers you get from your software team. Watch out for the five red flags we've shared with you, and your chances of success will be much higher.
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