EME 17 Software Cost & Costing

Software Cost & Costing

17.1 Software size estimation

Software size estimation methods

• Comparison method
• Analogy method
• Work breakdown method
• Equation method (most widely used) ：the size of the project is applied to an appropriate equation that has been derived from data of finished real projects.

three types of software project requirements

• Functional requirements: function points (FPs).
• Nonfunctional requirements
• Technical requirements: include hardware and software requirements, infrastructure requirements, database type, and so on.

Functional size represents the size of the functional requirements.
Functional requirements, represent WHAT functions will be included in the software.
Nonfunctional requirement is the second type of software requirement and represents HOW the software must perform. the
nonfunctional requirements include suitability, accuracy, interoperability, compliance, security, reliability, efficiency, maintainability, portability, and quality in use.

Function Point Counting Procedure

Functional User Requirements (FURs) are a subset of the user requirements specifying what the software should do in terms of tasks and services.
Functional User Requirements include but are not limited to:

• Data transfer
• Data transformation
• Data storage
• Data retrieval

the steps in the function point counting procedure:

• Gather the available documentation.
• Determine counting scope and boundary and identify Functional User Requirements.
• Measure data functions.
• Measure transactional functions.
• Calculate the functional size.
• Document and report.

“scope creep”

17.2 Software cost estimation

Economic cost vs Accounting cost

• accounting cost (explicit cost): be measured in currency, such as employee wages.
• implicit cost: cannot be directly reflected on
  the book. e.g., opportunity cost

The steps for estimating software cost

1. First, identify the true cost driver of a certain business.
2. Second, calculate the cost driver rate of the business.
3. Third, multiply the first two factors to obtain the accuracy of the cost.
4. Fourth, verify the estimated results of the cost in the previous steps, continuously improving in order to effectively monitor & control costs.