Section 4
Cost-Estimating Adjustment Factors

Software cost estimating is a complex activity with a host of interlocking factors and hundreds of adjustment rules to evaluate. In general, commercial software cost-estimation tools assume that a project is average in every major factor unless the users state otherwise. This means that users need deal only with topics where they know their project will be much better or much worse than normal.

However, there are some adjustments that are so important that industry averages should not be used and, indeed, may even be hazardous. Some of these critical factors where local information should be used in place of industry averages include the following:

Compensation levels for project personnel

Burden or overhead rates to be applied to the projects

Work patterns in terms of paid and unpaid overtime

Specific methodologies to be used

Specific tools to be used

Specific programming languages to be used

The specific kinds of reviews and inspections to be used

The specific kinds of testing to be used

The normal method of operation of dealing with programming adjustments is to present the users of estimating tools with the current default values, which they can either accept or modify as the situation warrants.