Impact of effort estimates on software project work

Abstract

This paper presents results from two case studies and two experiments on how effort estimates impact software project work. The studies indicate that a meaningful interpretation of effort estimation accuracy requires knowledge about the size and nature of the impact of the effort estimates on the software work. For example, we found that projects with high priority on costs and incomplete requirements specifications were prone to adjust the work to fit the estimate when the estimates were too optimistic, while too optimistic estimates led to effort overruns for projects with high priority on quality and well specified requirements. Two hypotheses were derived from the case studies and tested experimentally. The experiments indicate that: (1) effort estimates can be strongly impacted by anchor values, e.g. early indications on the required effort. This impact is present even when the estimators are told that the anchor values are irrelevant as estimation information; (2) too optimistic effort estimates lead to less use of effort and more errors compared with more realistic effort estimates on programming tasks.