This Article 
   
 Share 
   
 Bibliographic References 
   
 Add to: 
 
Digg
Furl
Spurl
Blink
Simpy
Google
Del.icio.us
Y!MyWeb
 
 Search 
   
A Causal Model for Software Cost Estimating Error
February 1998 (vol. 24 no. 2)
pp. 137-148

Abstract—Software cost estimating is an important concern for software managers and other software professionals. The hypothesized model in this research suggests that an organization's use of an estimate influences its estimating practices which influence both the basis of the estimating process and the accuracy of the estimate. The model also suggests that the estimating basis directly influences the accuracy of the estimate. A study of business information systems managers and professionals at 112 different organizations using causal analysis with Equations Modeling System (EQS) refined the model. The refined model shows that no managerial practice in this study discourages the use of intuition, guessing, and personal memory in cost estimating. Although user commitment and accountability appear to foster algorithm-based estimating, such an algorithmic basis does not portend greater accuracy. Only one managerial practice—the use of the estimate in performance evaluations of software managers and professionals—presages greater accuracy. By implication, the research suggests somewhat ironically that the most effective approach to improve estimating accuracy may be to make estimators, developers, and managers more accountable for the estimate even though it may be impossible to direct them explicitly on how to produce a more accurate one.

[1] S. Adelman, "Budgets in Unreal Time," Computer World, vol. 27, no. 25, p. 82, June 1993.
[2] T.K. Abdel-Hamid and S.E. Madnick, "On the Portability of Quantitative Software Estimating Models," vol. 13, no. 1, pp. 1-10, Aug. 1987.
[3] A.J. Albrecht, "Measuring Application Development Productivity," Proc. GUIDE/SHARE Application Development Symp., pp. 83-92, Oct., 1979.
[4] C. Argyris, Reasoning, Learning and Action, Individual and Organizational. Jossey-Bass, 1982.
[5] C. Argyris, R. Putnam, and D. McLain Smith, Action Science, second edition. San Francisco: Jossey-Bass, 1987.
[6] J.D. Aron, "Estimating Resources for Large Programming Systems," J.M. Buxton, ed. et al., Litton Educational Publishing, Inc, 1976.
[7] E.R. Babbie, Survey Research Methods.Belmont, Calif.: Wadsworth, 1973.
[8] R.D. Banker and C.F. Kemerer, "Scale of Economies in New Software Development," IEEE Trans. Software Eng., vol. 15, no. 10, pp. 1,199-1,205, 1989.
[9] I. Benbasat and I. Vessey, "Programmer and Analyst Time/Cost Estimation," MIS Quarterly, pp. 30-43, June, 1980.
[10] R. Betteridge, "Successful Experience of Using Function Points to Estimate Project Costs Early in the Life-Cycle," Information Software Technology, vol. 34, no. 10, pp. 655-658, Oct. 1992.
[11] B. Boehm, Software Engineering Economics, Prentice Hall, Upper Saddle River, N.J., 1981, pp. 533-535.
[12] B.W. Boehm, "Software Engineering Economics," IEEE Trans. Software Eng., pp. 4-21, Jan. 1984.
[13] B.W. Boehm and P.N. Papaccio, "Understanding and Controlling Software Costs," IEEE Trans. Software Eng., vol. 14, no. 10, pp. 1,462-1,477, Oct. 1986.
[14] G. Churchill, Marketing Research Methodological Foundations, 4th edition. Chicago: Dryden Press, 1987.
[15] Computer Associates, CA-ESTIMACS: An Applications Development Project Estimation Systems.Mt. Laurel, N.J.: Computer Associates, 1987.
[16] S.D. Conte, H. E. Dunsmore, and V. Y. Shen, Software Engineering Metrics and Models, Benjamin/Cummings, Menlo Park, Calif., 1986.
[17] L.J. Cronbach, "Coefficient Alpha and the Internal Structure of Tests," Psychometrika, vol. 16, pp. 297-334, 1951.
[18] A. Cuelenaere, M. van Genuchten, and F. Heemstra, "Calibrating a Software Cost Estimation Model: Why and How," Information and Software Technology, vol. 20, no. 10, pp. 558-567, 1987.
[19] T. Demarco, "The Estimating Dilemma," Controlling Software Projects: Management, Measurement and Estimation. Yourdon Press, 1982.
[20] T. Demarco, "An Algorithm for Sizing Software Products," Performance Evaluation Review, vol. 12, no. 2, pp. 13-22, 1984.
[21] W.S. Donelson, "Project Planning and Control," Datamation, pp. 73-80, June 1976.
[22] J.C. Emery, Cost/Benefit Analysis of Information Systems.Chicago: The Society for Information Management, pp. 16-46, 1971.
[23] F.R. Freiman and R.D. Park, "PRICE Software Model—Version 3; an Overview," Proc. IEEE—PINY Workshop Quantitative Software Models, IEEE Cat. TH0067-9, Oct. 1979.
[24] E.E. Ghiselli, J.P. Campbell, and S. Zedeck, Measurement Theory for the Behavioral Sciences.New York: W.H. Freeman, 1981.
[25] P.A. Goodman, "Application of Cost-Estimation Techniques: Industrial Perspective," Information and Software Technology, vol. 34, no. 6, pp. 379-382, June 1992.
[26] R. Gulezian, “Reformulating and Calibrating COCOMO,” J. Systems Software, vol. 16, pp. 235-242, 1991.
[27] M.H. Halstead, Elements of Software Science. North-Holland, 1977.
[28] F.J. Heemstra, "Software Cost Estimation," Information Software Technology, vol. 34, no. 10, pp. 627-639, Oct. 1992.
[29] D. Hellriegel, J.W. Slocum, and R.W. Woodman, Organizational Behavior, 4th edition. St. Paul, Minn.: West Publishing, 1986.
[30] J.R. Herd, J.N. Postak, W.E. Russell, and K.R. Stuart, Software Cost Estimation Study-Study Results.Rockville, Md.: Doty Assoc., Final Technical Report RADC-TR-77-220, vol. 1of 2, June, 1977.
[31] R.H. Hoyle, "The Structural Equation Modeling Approach: Basic Concepts and Fundamental Issues," R.H. Hoyle, ed., Structural Equation Modeling: Concepts, Issues, and Applications,Thousand Oaks, Calif.: Sage, 1995.
[32] D.R. Jeffery, G.C. Low, and M. Barnes, "A Comparison of Function Point Counting Techniques," IEEE Trans. Software Eng., vol. 19, no. 5, pp. 529-532, 1993.
[33] R.W. Jensen, "An Improved Macrolevel Software Development Resource Estimation Model," Proc. Fifth ISPA Conf., pp. 384-389, Apr. 1983.
[34] T.C. Jones, Programming Productivity.New York: McGraw-Hill, 1986.
[35] K.G. Joreskog, "Testing Structural Equation Models," K.A. Bollen and J.S. Long, eds., Testing Structural Equation Models.Newbury Park, Calif.: Sage, 1993.
[36] C. Kemerer, "An Empirical Validation of Software Cost Estimation Models," Comm. ACM, vol. 30, pp. 416-429, May 1987.
[37] C.F. Kemerer, "Reliability of Function Points Measurement: A Field Experiment," Comm. ACM, vol. 36, no. 2, pp. 85-97, Feb. 1993.
[38] F.N. Kerlinger, Foundations of Behavioral Research.New York: Holt, Rinehart, and Winston, 1986.
[39] J. Kim and C.W. Mueller, Factor Analysis: Statistical Methods and Practical Issues,Beverly Hills, Calif.: Sage, 1978.
[40] J.L. King and E.L. Schrems, "Cost-Benefit Analysis in Information System Development and Operation," Computing Surveys, Mar. 1978.
[41] B.A. Kitchenham and N.R. Taylor, "Software Development Cost Estimation" J. Systems and Software, vol. 5, no. 5, pp. 267-278, 1985.
[42] W. Kohler, Gestalt Psychology.New York: H. Liveright, 1929.
[43] R.J. Kusters, M.J.I.M. van Genuchten, and F.J. Heemstra, "Are Software Cost-Estimation Models Accurate?" Information and Software Technology, vol. 32, no. 3, pp. 187, Apr. 1990.
[44] G. Lang and G.D. Heiss, A Practical Guide to Research Methods.Lanham, Md.: Univ. Press of America, 1984.
[45] A.L. Lederer, R. Mirani, B.S. Neo, C. Pollard, J. Prasad, and K. Ramamurthy, "Information System Cost Estimating: A Management Perspective," MIS Quarterly, vol. 14, no. 2, pp. 159-178, June, 1990.
[46] G.C. Low and R.D. Jeffery,“Function points in the estimation and evaluation of the software process,” IEEE Transactions on Software Engineering, vol. 16, pp. 64-71, Jan. 1990.
[47] R.C. MacCallum, "Model Specification: Procedures, Strategies, and Related Issues," R.H. Hoyle, ed., Structural Equation Modeling: Concepts, Issues, and Applications.Thousand Oaks, Calif.: Sage, 1995.
[48] R. Martin, "Evaluation of Current Software Costing Tools," Software Eng. Notes, vol. 13, no. 3, pp. 49-51, 1988.
[49] J.E. Matson, B.E. Barret, and J.M. Mellichamp, “Software Development Cost Estimation Using Function Points,” IEEE Trans. Software Eng., vol. 20, no. 4, pp. 275–287, Apr. 1994.
[50] T.J. McCabe, "A Complexity Measure," IEEE Trans. Software Eng., vol. 2, pp. 308-320, 1976.
[51] Y. Miyazaki and K. Mori, "COCOMO Evaluation and Tailoring," Proc. Eighth Int'l Software. Eng. Conf.London: IEEE CS Press, 1985.
[52] S.N. Mohanty, "Software Cost Estimation: Present and Future," Software-Practice and Experience, vol. 11, pp. 103-121, 1981.
[53] T. Mukhopadhyay, S.S. Vicinanza, and M.J. Prietula, "Examining the Feasibility of a Case-Based Reasoning Model for Software Effort Estimation," MIS Quarterly, vol. 16, pp. 155-171, June, 1992.
[54] E.A. Nelson, Management Handbook for the Estimation of Computer Programming Costs, System Development Corporation, AD-A648750, Oct. 1966.
[55] J.C. Nunnally, Psychometric Research.New York: McGraw-Hill, 1978.
[56] S. Lawrence Pfleeger and T.B. Bollinger, "The Economics of Reuse: New Approaches to Modeling and Assessing Cost," Information Software Technology, vol. 36, no. 8, pp. 475-484, Aug. 1994.
[57] L.H. Putnam, "A General Empirical Solution to the Macro Software Sizing and Estimating Problem," IEEE Trans. Software Eng., pp. 345-361, July 1978.
[58] R. Rask, P. Laamanen, and K. Lyytinen, "Simulation and Comparison of Albrecht's Function Point and Demarco's Function Bang Metrics in a CASE Environment," IEEE Trans. Software Eng., vol. 19, no. 7, pp. 661-671, July 1993.
[59] H.A. Rubin, Macro-Estimation of Software Development Parameters: The ESTIMACS System. IEEE Computer Society, document CH1919-0/83/0000/0109, 1983.
[60] A. Satorra and P.M. Bentler, "Corrections to Test Statistic and Standard Errors in Covariance Structure Analysis," A. Von Eye and C.C. Clogg, eds., Analysis of Latent Variables in Developmental Research.Newbury Park, Calif.: Sage, 1994.
[61] M.J. Shepperd, C. Schofield, and B.A. Kitchenham, “Effort Estimation Using Analogy,” Proc. 18th Int'l Conf. Software Eng., 1996.
[62] K. Srinivasan and D. Fisher, “Machine Learning Approaches to Estimating Software Development Effort,” IEEE Trans. Software Eng., vol. 21, no. 2, pp. 126–137, Feb. 1995.
[63] G.H. Subramanian and S. Breslawski, "Dimensionality Reduction in Software Development Effort Estimation," J. Systems and Software, vol. 21, no. 2, pp. 187-196, May 1993.
[64] G. Tate and J.M. Verner, "Software Sizing and Costing Models: A Survey of Empirical Validation and Comparison Studies," J. Information Technology, vol. 5, pp. 12-26, 1990.
[65] M. Van Genuchten, "Why is Software Late? An Empirical Study of Reasons for Delay in Software Development," IEEE Trans. Software Eng., vol. 17, no. 6, pp. 582-590, 1991.
[66] M. van Genuchten and H. Koolen, "On the Use of Software Cost Models," Information and Management, vol. 21, no. 1, pp. 37-44, Aug. 1991.
[67] S.S. Vicinanza, T. Mukhopadhyay, and M.J. Prietula, "Software-Effort Estimation: An Exploratory Study of Expert Performance," Information Systems Research, vol. 2, no. 4, pp. 243-262, Dec. 1991.
[68] C.E. Walston and C.P. Felix, "A Method of Programming Measurement and Estimation," IBM Systems J., vol. 16, no. 1, pp. 54-73, 1977.
[69] R.W. Wolverton, "The Cost of Developing Large-Scale Software," IEEE Trans. Computers, pp. 615-636, June 1974.

Index Terms:
Cost estimating, software development.
Citation:
Albert L. Lederer, Jayesh Prasad, "A Causal Model for Software Cost Estimating Error," IEEE Transactions on Software Engineering, vol. 24, no. 2, pp. 137-148, Feb. 1998, doi:10.1109/32.666827
Usage of this product signifies your acceptance of the Terms of Use.