The four major parameters that control the software projects are time, requirements, resources people, infrastructure/materials and money, and risks. This is one of the reasons why making good estimates of these variables like time and resources required for a project is very critical. But if the estimation is lower than the project needs it will affect the progress of the project due to the lack of enough time, money, infrastructure/materials, or people. At the same time even if the estimation is over estimated then the company will have to face losses due to the extra expenses or even if the project is sanctioned other projects don’t go on since there is less to go around.

For any successful project management, estimation is a vital part of project methodology. Estimation has numerous applications like justification of project which has to be applied in the initial stages of the project where in we need to anticipate the benefits which is compared with the costs incurred as well as to decipher comparisons and conclusions that has to be made with technical and functional teams involved in the project. Also, estimation plays a vital role in project management to implement the disciplines required. Estimates help in sharing the resources required to complete the project deliverables successfully.

Estimation process:

Definition: Project estimation is a process of forecasting or approximating the project parameters like cost, time, effort etc., for a successful completion of the project deliverables [4].

Overview of the Estimation Process:

The first point to be remembered about estimation is that it does not finish until the completion of project and is a process of a slow and gradual refinement. For many software projects a project manager can assist the team to create successful estimates by using sound techniques and understanding about what makes estimate more accurate. Staff required for a project estimation are taken from a pool of people who has some prior knowledge of the domain in which the new project is being developed.

When we want to start a project we need to know basic parameters required in advance like how long it will take, how many people it will require, how much effort it will require. In such cases it is hard to estimate because in many cases projects overrun or project would go over budget. Always a good estimation practices keep the project on track. In many cases, project estimation can be classified into three categories,