Systems development and cost estimating: challenges and guidelines

Systems development cost estimating is a critical challenge for most IS managers. Inaccurate low estimates result in overruns and can reduce senior management's confidence in IS. Inaccurate high estimates can dissuade corporate management from funding worthwhile IS projects. If cost estimates are entered into a corporate budget, management may be even more concerned about them. The cost-estimating practices in effect at 115 organizations were studied to determine why cost estimating remains such a challenge for IS managers and to devise some guidelines to help IS management arrive at more accurate estimates.