Causes of inaccurate software development cost estimates

A study of information systems managers and other information systems professionals at 112 different organizations confirmed that information systems software cost estimating is an important concern. Subjects reported the completion of only one of every four systems development projects within their estimates. Although subjects perceived that the major causes of inaccurate estimates were users’ changes in their requirements and users’ lack of understanding of those requirements, such problems with users did not predict inaccurate estimates. instead, management control issues such as lack of consideration in performance reviews as to whether estimates were met, lack of project control comparing estimates and actual performance, and lack of careful examination of the estimate by information systems department management did predict inaccurate estimates. Thus, in reply to the long-standing question as to whether overruns are more attributable to inaccurate estimating or ineffectual project management, the data in this study raise concerns about the latter. The results suggest that information systems managers and professionals might want to reassess their attitudes toward their users, and researchers might want to focus on particular causes of inaccurate estimating.